Let's play a game for a moment. Pretend that tomorrow, all the small businesses in the United States have disappeared.
This isn't a fun game, because if that scenario somehow happened, it would be the equivalent of the entire nation being hit by an economic nuclear bomb. Excluding government workers, roughly half the nation's employment force, not to mention a ton of entrepreneurs, would be unemployed. And good luck finding work in the near future; annually, 60 to 80 percent of new jobs are created by small businesses.
In our hypothetical scenario, few new industries would surface; approximately 14 times more patents per employee are produced at small businesses than at large patenting firms.
And just try getting a break at a soup kitchen-small businesses contribute millions of dollars each year to their communities. According to a recent survey by the Princeton Survey Research Associates International, a research firm that specializes in social and policy work, 91 percent of businesses with four to 99 employees support local charities and groups.
Individually, many small businesses don't appear to have much clout, but together, they are the engine and soul of the nation's economy and emotional well-being. So in honor of National Small Business Week (May 17 to 21), we're paying tribute to three small enterprises that epitomize the most significant elements of entrepreneurs' awesome power: the ability to innovate, to create jobs and to give back to the community.
These entrepreneurs are more than a symbol of the power of small business; they're the reflection we see when we look in the mirror.
Where the Jobs Are
None of the five entrepreneurs at Platinum Select Staffing is running for president. That should make both George W. Bush and John Kerry breathe a sigh of relief. After all, Platinum Select would have quite a job-creation platform-and job creation is in the news an awful lot these days, with companies outsourcing talent to countries overseas, unemployment remaining steady, and hiring at low levels.
The Dallas firm, with projected 2004 revenues of $23 million, is a staffing company-sending everyone from nurses to anesthesiologists to work at hospitals and other medical facilities around the country. "In this market, a lot of companies are more [apt] to cut benefits and perks than to provide them. That's a direction we've really tried not to go in, because we do value the employees," says Stephanie Martinez, vice president and chief marketing officer. "When the market turns [and jobs are easier to find], that's how we're going to keep our edge." Martinez adds that in the future, Platinum Select will expand into staffing professional positions, clerical jobs and the IT sector.
Of course, as CEO Patrick Aunkst points out, the hospitals are creating the jobs; Platinum Select is simply guiding the right people to the source. But the firm is aiding in job creation directly as well as indirectly-after all, the better a partner Platinum Select is to the medical community, the more jobs it creates within its own walls. In July 2001, Platinum Select had only five employees: Aunkst, 37; Kristi Bomar, 30, CFO; Martinez, 30; Bob Quigley, 28, COO and vice president; and Lyle Seedig, 28, chief administrative officer. Now they have 22 people working for them, and another 130 staffed in hospitals. By 2011, Aunkst plans to have a sales staff 192 strong and approximately 3,000 employees working at facilities around the country.
But it's not just Platinum Select-every entrepreneur can feel good about what they're doing for the economy, according to Gerry Murak, author of the recent business-improvement book Straight Line Into the Turn (Cameo Publishers) and a consultant with 30 years of experience, specializing in turning troubled businesses into thriving ones. "By its very nature, entrepreneurship is all about job creation," says Murak. "As soon as entrepreneurs decide to go into business for themselves, they've created a job."
Murak also notes that a lot of entrepreneurs are indirectly creating jobs simply by giving their business to other companies. "But because the job creation isn't in huge numbers, it doesn't make the press. Even if you hire 100 folks in a couple of months, it's generally not newsworthy and won't hit the press's radar screen," he laments, adding that politicians rarely chase after entrepreneurs because of the small numbers.
But there's no denying entrepreneurs do influence the job market, something Aunkst says he hasn't given much thought. "We take [it] for granted," he says. "We're contributing to society almost without noticing."
Father of Innovation
Many of our nation's best innovations were born in the minds of entrepreneurs. In fact, large corporations have long acknowledged-even mimicked-the innovative spirit that's alive and well in smaller companies. Just ask Jack Gordon, 52, who blazed new trails with AcuPoll, a company he started specifically to help clients innovate. The Cincinnati-based market research firm predicts whether a new product will be a triumph or a turkey, whether an ad campaign becomes a favorite or quickly forgotten. Clients have ranged from The Coca-Cola Company and Pepsi-Co Inc. to NASCAR and Procter & Gamble. Some of the products AcuPoll has had a hand in developing include the Oral-B Indicator toothbrush, Clorox Disinfecting Wipes and BiorÃ©'s deep-cleansing pore strips.
Through it all, Gordon has come to learn a thing or two about innovation. When he first started the company in 1990, market research wasn't what it is today. "Companies that wanted to innovate would come up with three or four ideas," recalls Gordon. "And this was at a time when 80 to 85 percent of the products being introduced were failing in the marketplace."
So Gordon's company, which has offices worldwide and just under 100 employees, devised a way to test-market 40 ideas at once-10 times the number clients were typically bringing in-and to compile and analyze the data for the client within seven days, versus the typical six to eight weeks. Now, AcuPoll brings in $10 million in annual revenues.
Why are small businesses so successful at innovation? They're usually close enough to their employees to ask for help in coming up with ideas, says Alan G. Robinson, co-author of Corporate Creativity and the just-released Ideas Are Free, both from Berrett-Koehler Publishers. With a system to seek out innovation, such as funneling creativity from employees, Robinson says, "the odds become a reality."
Of course, part of the trick of understanding innovation is to know when you see it. As Gordon tells his clients, while the market has to be there, "you also [need] something new and different. Let's say you have a new detergent, and it goes against Tide. When it comes time for the consumer to give up their Tide and pick up your product, why would they? You need something extra." Fortunately for many U.S. companies and consumers that want to be on the edge of innovation, AcuPoll has exactly that: something extra.
Get ready to celebrate with the SBA.
Your spouse or significant other probably won't send a card. Your parents probably won't call. Your friends aren't likely to take you out to dinner or to a movie. As a whole, the country never seems to really notice the 41-year-old holiday known as National Small Business Week the way they do Christmas, Thanksgiving and even Arbor Day. But no matter. The SBA obviously cares, because it's throwing its annual party in Orlando, Florida, at the Orange County Convention Center from May 19 to 21. Those interested in attending should visit www.sba.gov/50 or call (202) 205-8414. And if you can't make up your mind until the last minute, you can register the day of the event, provided it isn't sold out. Prices are $325 before April 17, $350 between April 18 and April 30, and $400 after that. The three-day extravaganza will include a business expo, a business matchmaking event, business seminars, a town hall meeting, and award ceremonies honoring women entrepreneurs as well as state and national small-business winners.
Someone's Gotta Give
In the city of St. Paul, Minnesota, there's a place where life is going to seem a little nicer-at least on one street. The Headwaters Group, part of the 91 percent of small businesses that are giving back to their communities, is planting a Peace Garden with a focus on the abused women's shelter across the street. And it's not just women who take refuge here; their young sons and daughters rest with them, too. The garden, which is planned to open June 17, is going to be a half-acre of land where these women can sit on a bench in the shade, admire the sunflowers and butterfly bushes, or plant vegetables and water the tulips. There will also be a children's garden, "so they can get their hands dirty," says co-founder John Sherman.
Gayle Peterson, 49, and Sherman, 47, practice what their company preaches. A decidedly for-profit business-their 2003 revenue was right around $1 million-The Headwaters Group works with major nonprofit organizations like the Rockefeller Foundation and the W.K. Kellogg Foundation. The goal is to help develop programs that will ultimately offer aid to pockets of humanity. The Headwaters Group's staff of five assists nonprofits with projects like raising money or streamlining operations-making it easier to bring more food into a homeless shelter, for instance.
But entrepreneurs don't have to be knee-deep in the nonprofit world to make a difference, assert Peterson and Sherman. "It's known as the triple bottom line," says Sherman, "which is not just concerning yourself with how you're going to make money, but how you're going to take care of the other two critical pieces of your business: the community and your employees."
The Peace Garden will cost The Headwaters Group around $10,000 to $20,000, a princely sum for some, but Peterson admits there's a side benefit for the company: "Not only are we getting to live our mission, but we believe the garden helps distinguish us from the competition."
And employees certainly want to work for a company known for doing good deeds, says David Bornstein, author of How to Change the World: Social Entrepreneurs and the Power of New Ideas (Oxford University Press). "The most talented young business students tend to be eager to work for socially responsible companies and are willing to accept 10 to 15 percent less of a salary in some cases [to do so]," says Bornstein. "Increasingly, companies [will] compete to be the most socially responsible, if only as a way to hire the most talented, interesting, well-rounded workers."
Peterson agrees, adding that her small staff says they're happier at their jobs than they've ever been. "They have a sense of purpose and a feeling they're changing the world," says Peterson. And soon, they'll know that they are changing the world every time they look out the window.
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Geoff Williams is a writer in Loveland, Ohio.