They are everywhere. Drive down almost any street, in any
city and town in California and you will see them.
Retailers and manufacturers, wholesalers and contractors,
one-person shops and significant employers. They are small
businesses, and they are the dynamo that powers California’s
economy.
The Office of Advocacy of the U.S. Small Business
Administration recently released its latest California Small
Business Profile and what it shows may surprise some people,
but others of us have known it all along. Without its small
business owners, California’s economy would not be nearly as
strong as it is today.
The report shows that in 2004 an estimated 1,068,602 or 99.2
percent of the state’s employer firms were small
businesses. And that number does not even include the
thousands of non-employer one-person firms scattered across
the state. These businesses generated a sizeable amount of
economic activity. In 2002, small firms (those with fewer
than 500 employees) employed 53 percent of the state’s
non-farm private sector employees. What is even more
remarkable is that from 2001 to 2002 (the latest data
available) firms with fewer than 20 employees saw net job
gains of 117,379 while firms with more than 500 employees
actually lost jobs.
The diversity of its small business owners helps create
integrated communities that make the state stronger. In
2002 (latest figures) women-owned firms totaled 871,617, an
increase of 24 percent from 1997, and they generated $140.9
billion in revenues. Moreover, there were 427,805
Hispanic-owned firms, an increase of 27 percent from 1997;
113,003 Black-owned firms, an increase of 43 percent; and
372,221 Asian-owned firms, an increase of 19 percent.
Clearly small business ownership is drawing more and more of
the state’s residents into the economic mainstream.
Main Street is where the state’s citizens go to work, so
policymakers should consider just how programs, rules, and
regulations will affect the state’s job-creating small
businesses. According to Advocacy research, just complying
with federal regulations costs the nation’s smallest firms
$7,647 per employee each year. That is 45 percent more than
the per-employee costs of their larger counterparts.
The uneven burden of regulations on small business is not
only a problem at the federal level. Because state and
local regulations can also fall disproportionately on small
businesses, Advocacy is encouraging states to pass laws
requiring their agencies to consider the impact of
regulations on small business.
To find out just how small business friendly the state’s
regulatory process is and what policy makers can do to
improve the climate for small business and unleash the
job-creating and community-building power of
entrepreneurship, visit
www.sba.gov/advo/laws/law_modeleg.html.
Small businesses are dynamic, creative, innovative,
job-creating, and they are powering the state’s economy.
Take a look around. There they are, in every city and every
town. They are providing jobs, growth, and economic
opportunity for all of California. So next time you are in
a store, shop, or warehouse along with your purchase you
just might want to say “thanks.”
Michael
T. Hull
is the
Office of Advocacy Regional Advocate for Region IX, covering
Arizona, California, Guam, Hawaii, Nevada, American Samoa,
Trust Territories and Commonwealth of the Northern Mariana
Islands. He is the direct link between small business
owners, state and local government agencies, state
legislators, small business associations, and SBA's Office
of Advocacy. Contact Michael T. Hull at (602) 745-7237 or
michael.hull@sba.gov.
