Small businesses were quite possibly the central topic in this year's presidential election. The words "small business" were mentioned a total of 57 times during the presidential debates. Republican presidential nominee Mitt Romney and President Barack Obama squared away their differences to agree that small businesses were the backbone of America and that they held an important status as job creators.
Now that the presidential election is over, small businesses have come under the harsh scrutiny of the impending fiscal cliff. Americans and policymakers are asking if small businesses deserve their prestigious standing -- and if they really are the key to driving economic growth.
Yahoo! Finance's Michael Santoli has argued that large companies -- those with 500 or more employees -- were responsible for 65% of net job gains from 1990 to 2011.
But Eric Schurenberg, editor-in-chief of Inc. Mag, says small businesses account for a majority of jobs in the country. "In fact almost all it," he tells the Daily Ticker.
"Let me put it this way," he explains. "Where job growth is, is growth. So job creation follows growth, most of the time the highest growers are small companies and that accounts for that."
Inc. Mag's Hire Power Awards rank the top 100 small businesses by job growth between 2008-2011. Together, the companies on the list have created 73,032 new jobs during that 3-year period.
The list includes both familiar names like GoDaddy and Greek yogurt maker Chobani, which have created 1,403 and 1,083 jobs respectively since 2008. Less familiar names like Universal Services of America, a security and janitorial service provider, has created 17,330 new jobs since 2008. Further analysis shows that California leads in job creation (Silicon Valley is most likely responsible for the boost), and the health care industry leads in total job growth. The top 18 small business job creators are at the bottom of this post, for the full list head to Inc. Magazine.
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Schurenberg also claims that there is something to be learned from the way that small businesses manage their staffs.
"Once entrepreneurs bring someone into the company they start to feel responsible for them," Shurenberg says, "and the people who won the Hire Power awards felt pride in the fact that they were advancing people in their careers and giving them something more to look forward to than just a paycheck and a timecard."
N0. 99 on the Hire Power list exemplifies this small-business mentality. The late Luke Bucklin sent an email to his employees at The Nerdery, a company that develops and builds Web sites and mobile apps, explaining how important they were to the success of the business and calling them all co-presidents. Shortly after that email, Bucklin died in a plane crash. The company now gives the title of co-president to every employee.
Ninety-two percent of Hire Power CEOs plan to hire more employees in 2013. "If I were looking for a job I'd be encouraged that there are so many small businesses out there that have plans in 2013 to add to their headcount," Shurenberg says. "As far as entrepreneurship goes," he adds, "that form of making a living is healthier than it's ever been."
As for the impending fiscal crisis? "I think what entrepreneurs really want is just to know what the rules are," Shurenberg notes. Whether the tax rate stays at 35% or jumps to 39%, "they'll live with it, they'll cope."
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