The Prowess of Small Business Job Creation

I have spent almost my whole career owning or working for a small business.  My family has a long entreprenuerial history in many different trades and businesses, from restaurants to contractors.  Most of these businesses, though were in the service sector.  But what about manufacturing?

You hear it all of the time, especially in California, that manufacturing is leaving the United States. But, according to Small Business Labs, “Over the next five years, a U.S. manufacturing renaissance in home appliances, car parts, and other sectors could accelerate—boosting output by $100 billion and adding 2 million to 3 million jobs.”

We heard all of layoffs by big corporations, but the driving factor is really small business.  “So, if GE and other large corporations aren’t big players in job creation, who produces all the new jobs in America? The answer is small business.

These businesses do everything, including building most of the houses constructed in America. Small business employs 67 percent of the private-sector workforce and pays out 44 percent of the private payroll. As the population grows, small firms provide the bulk of the new jobs needed. For many, small business provides their first experience in the world of work.” (Dunkelgerg, philly.com, July 4, 2011)

What this means is that growth is in the wind for small businesses and labor will be a major factor, especially for manufacturing.  Small business is defined by the SBA as one that has fewer than 500 employees.  For an owner, this means the following:

1. As stated in previous articles, don’t build the business around you.  Train others to perform your duties allowing you to supervise and grow your business.  This especially applies to the manufacturing sector.
2. Don’t be afraid to hire people that have skills in other industries.  You may have to spend a little more time training them, but they can bring a new perspective to your industry.  “Outsider’s eyes” should be welcomed.
3. Incorporate increased employment into your strategy instead of the knee-jerk reaction of downsizing.  Sometimes you have to downsize, but reinventing you business may not only save jobs, but create new ones.

Small businesses, whether in the manufacturing sector, or service sector should never cave into current economic hysteria.  A level head with  good strategy and tactics will usually be the better mindset.