Little BIG TIME: The role of small businesses in the economy
by Victoria Watkins
July 01, 2013 12:00 AM | 1249 views | 0 0 comments | 12 12 recommendations | email to a friend | print
"Not dominant in its field."

As a small business owner, a little part of me bristles when I read this part of the Small Business Administration's revised definition of a small business.

Despite my recognition that the term is applied in a purely numerical - dollars and cents of revenue generated as compared to national figures - context, it still smacks a little pejorative. And as the president of a business association - composed largely of local small businesses - I am reminded daily of the passion, skill and importance of small businesses in my community.

While the average small business, by itself, may not stand out in its industry, taken as a national whole, or contribute significantly to the national tax base, it cannot be ignored as a driving force of overall economic growth, recovery, stability and vitality.


A small business's economic impact goes beyond their individual contribution to the tax base because they facilitate and make possible countless other small businesses and drive the success of large businesses as well. A local landscaping company uses a local CPA to keep their books.

When their employees are paid every week, those dollars spread out into the community: perhaps to the family-operated day care, a doctor or dentist, a local fast food franchise. Those dollars also go further afield when they are spent at the supermarket and the home improvement warehouse - the latter of which could not operate on a national scale without strong local support. Rinse and repeat with each small business, and the dollars add up.


Many industries, particularly in the service sector, by their very nature, are incapable of national operation or are better when operated on a small scale, despite being necessary to the gears of economy and daily life turning. Your chiropractor or therapist come to mind. So does the local plumber and some types of attorney. Many would prefer to work with an independent insurance agent, even if they are selling a nationally available product. The desirability and the effectiveness of these businesses would likely be diminished if there were anything but small.

Strength in Numbers

The latest government figures are unmistakable. The SBA reports that 90 percent of revenue (and therefore tax) generating businesses have less than 20 employees. Businesses with less than 10 employees account for more overall jobs than those businesses whose headcount ranges from 2,000 to 5,000.

And more than 70 percent of all small businesses are sole proprietors.

It's safe to say that small businesses, while they may not each be dominant when taken individually, most certainly dominate our economy.

Victoria Watkins owns an independent law practice in east Cobb. She specializes in estate planning, veterans' benefits and elder law. She lives with her husband and two children in Marietta.

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