Introduction to entrepreneurship/IENT101/Small business/Importance

Why are small business so important?

• Job creation: In the US "“Small businesses represent 99.7 percent of all U.S. businesses with employees and employ about 56 million members of the nation’s private-sector workforce."
• Innovation: "Small business owners are also particularly adept at finding new ways of doing old things. In 1994, for example, a young computer-science graduate working on Wall Street came up with the novel idea of selling books over the Internet." Does that sound familiar? It should do. Last year (2016) Amazon sold over $135 billion.
• Opportunities for Women and Minorities: Although most are still owned mainly by white males, small businesses do enable women and minorities to become financially independent.
• Complementing big business: Big businesses need suppliers and a lot of those suppliers are small businesses. Small businesses also provide services such as accounting, insurance and legal. Small businesses also sell products that big business make. Car manufacturers don't sell cars to the public they rely on car dealerships to do this. A sports shop will sell Nike trainers and your local supermarket sells Cola.

Required reading

Read this article then try the quiz below.

• The Importance of Small Business to the U.S. Economy

Quiz

Indicate whether these statements are true or false.

• Small businesses spark innovation
  • True
    • Correct: They do spark innovation.
  • False
    • Incorrect: They do spark innovation. Think about Amazon.
• Small businesses have no impact on a country's economy.
  • True
    • Incorrect: In the US for example small businesses contribute 50% of GDP.
  • False
    • Correct: In the US for example small businesses contribute 50% of GDP.

Quiz items proudly reused from Candela Learning "Introduction to Business" licensed under CC-BY

References