Small Businesses—America’s Growth Engine
Often, when we think about the US economy, we focus on the large multinational corporations that have become household names, from Apple to WalMart, from Google to Bank of America, from Exxon Mobil to CVS. Such firms employ tens of millions of people, to be sure, and are of course vitally important to the economic health of the nation and world.
These multi-billion-dollar firms, however, all began as small startups. Each year, according to the US Census, over 400,000 new firms are founded, and about two-thirds of all new job creation comes in small businesses, defined as those with fewer than 500 employees. Of the approximately 6 million active companies in the US with at least 1 employee, 3.8 million have fewer than five employees, and only 10 thousand (only 0.2% of all active firms!) have more than 1000. New small firms, whether they remain small (“Mom and Pop” operations) or grow to become the next Microsoft, Forever 21, or Facebook, are thus crucial to the health of the US economy and society.
The problem, though is that the majority of these new startups will fail within five years, and three-quarters will go out of business within fifteen years. Why? Some of these flops are poorly planned from the start, offering products or services customers don’t want, or are established in a location that prevents success. Most of these failed firms, however, go under because of a lack of money and/or a lack of managerial expertise. To help such firms to survive and prosper, Bay State College students in MAN 450, Senior Seminar, the capstone course for all of the Bachelor of Science in Management programs, spend their final semester researching and creating strategic plans for local small businesses. The students are able to apply their knowledge and experience in a hands-on, practical way, helping a local firm grow and thrive, while the business owners get much-needed business insights from the students. Over the past year, students have worked with a wide variety of local small businesses, including beauty salons/spas, fitness centers, banks, restaurants, software firms, healthcare providers, real estate firms, clothing retailers, educational institutions, construction and engineering firms, transportation startups, and travel agencies. One entrepreneur summed up the experience of working with our students: “My firm was able to put several of the student’s recommendations to work right away. Our revenues and total profits have risen dramatically since!”
At Bay State College, we focus on education that makes a difference, both for our students and for our community.