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Just How Essential Is Your Small Business?

4 June 2014 No Comment

canstockphoto15965892Small business owners might already have a vague idea that they’re important to the American economy, but they might not realize just how essential they are when compared to some of the larger companies out there. One of the biggest obstacles to hopeful small business owners and their impact on the country is successfully securing a loan, but thankfully companies like American Finance Solutionsand their new lending platform is changing that as well as how big of an impact small businesses can make.

Large Employer Force

Research has shown that small businesses make up nearly 100 percent of all US employers. Small businesses have given jobs to more than an estimated 56 million US individuals, which is equal to nearly 60 percent of the private sector of American employees. Any businesses that supply jobs to fewer than 500 employees supply employment opportunities for several different types of employees. Along with this particular statistic is the fact that those businesses heavily depend on their employees for their business success. Since there are so many jobs being supplied by small businesses, you can image how well the economy flourishes because of their success.

The Creation of Jobs

Not only are small businesses a major employer in America, they’re also the biggest job creators, and that’s when compared with larger companies. According to the Small Business Administration, small businesses successfully created about 80 percent of the net new US jobs between 2005 and 2008.


Studies have shown that small businesses that pursue patents earn 13 to 14 more patents for each employee when compared with larger firms. The employees of small businesses are encouraged to bring something new to the market through the use of their technical acumen. The new technology and inventions that small businesses create represent a substantial and favorable contribution to the US economy.

The Payroll Principle

A majority of American workers receive their paychecks from small business owners. According to research done by the Small Business Administration, small businesses pay out about 40 percent of the yearly American payroll. The benefit to the American economy is that small business employees are able to spend more money and further stimulate the economy. The American payroll would be quite small without the help of small companies.


Another reason that small companies are so essential to the American business structure is that they export to other countries. An estimated 97 percent of indentified exporters are small companies. Those small companies create almost 30 percent of the export value with their products, which are shipped to customers in foreign countries. Exporting is another cornerstone of having a strong American economy.

While you might not see a very large presence of small businesses in the stock market, they are most certainly making waves. There’s also the fact that small businesses can play a large part in influencing larger business, which is most often done through supply chains, affecting marketable trends, and creating competition for larger business.

It can be difficult to open a small business let alone create a successful small business, but that small business has a large part to play in the American economy, a part that seems to be growing larger every day.

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