Definitions of what a small business is vary according to industry type, sales, growth, employees, ownership, gross income, net income, and profitability.  It varies by who is doing the defining (bank, SBA, VC, etc), and the list goes on.

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But while they fail at an alarming rate (80% don’t’ reach their 18 month birthday), small businesses drive the economy.  Their number has increased significantly since 1982 and small businesses have been creating more than half of all jobs in the United States since the seventies.  In fact, since 1990, corporate America eliminated 4 million jobs; small businesses added double that many to the economy. 

Paul Fouts, dean of the Ageno School of Business at San Francisco’s Ageno Golden Gate University accurately summed it up when he noted “[s]uccessful small businesses are the unsung heroes, because small business is the driving force in the economic community.” 

At first blush it seems hard to reconcile the alarmingly high failure rate with the job contribution.  But if we ask a different question, e.g. “what makes a successful small business,” the answer is clearer. 

Every day in my practice I deal with small businesses owners in a range of industries.  They are men, women, young and not so young, and ethnic backgrounds vary.  Indeed, any number of criteria can be used to differentiate them. 

But the one common denominator, uniquely and somewhat intangibly tied to success, is purpose.  One fellow expressed it in terms of being a good dad.  Another described it as his desire to inspire others to change the world.  I define my as helping others’ advancement and achievement.  Some small businesses aim to be big, others to put food on the table.  Still yet, some to provide for employees.  

What these folks do and what their companies look like may change over time.  How they do what they do may change, too.  But in the end, those who understand their purpose are best equipped to navigate the myriad variables that can grab and tear at our enterprises.  

Thanks for the photo Julia!

About Chris McGrath

I’m a Carmel, Indiana business attorney providing business counsel, commercial litigation and mediation services based on over 20 years of experience. My firm is founded on a principle of supporting others’ advancement and achievement, and my core values are service, passion, faith & loyalty.Chris McGrath’s Google+ Profile