The Evolution of Small Businesses in the United States

The Evolution of Small Businesses in the United States

The Evolution of Small Businesses in the United States

Blog108_SmallBusinessEvolution_PinkShop-300x199 The Evolution of Small Businesses in the United StatesThe United States has long been known as the land of opportunity—a place where anyone who works hard can achieve anything to which they set their mind. The entrepreneurial spirit is alive and well in the birthplace of the American Dream, which has contributed to the United States becoming the world’s strongest economy. It is no surprise, then, that small businesses are a thriving trend in the US, both among immigrants and native-born Americans. Let’s have a brief look at how small businesses have progressed since our country’s early days and then dig deeper into the nature of small businesses throughout the 21st century.

Blog108_SmallBusinessEvolution_FruitMarket2-300x250 The Evolution of Small Businesses in the United StatesThe term “small business” is actually relatively new—only about 150 years old. Before the Industrial Revolution, which took place in the 18th and 19th centuries, all businesses were small. Big businesses started to take shape towards the end of the end of the 19th century. After World War II, the term “small business” was considered pejorative as Americans came to favor everything big, including big businesses. Small businesses had a hard time raising enough funds and operating on a large enough scale to efficiently produce enough goods to meet demand, so larger corporations took on more importance. In the latter half of the 20th century and into the 21st century, small businesses have made their comeback and have made their way to becoming the most trusted institution in the United States.

Blog108_SmallBusinessEvolution_GuyAtMicroscope-300x200 The Evolution of Small Businesses in the United StatesAccording to a 2005 Baylor University study, 5 million jobs have been eliminated from Fortune 500 companies since 1980 for reasons such as mass corporate layoffs and mergers. At the same time, 34 million jobs were created at small businesses. In addition, the 1970s and 80s saw a growth in foreign competition. While larger corporations had a hard time facing up to this competition, small businesses rose to the challenge and succeeded. In 1977, there were 14.7 million small businesses. That number has since more than doubled; in 2018, there were nearly 32 million. Roughly 99% of independent enterprises in the United States have fewer than 500 employees, and small business employees account for 52% of all US workers. Other data show that 1 in 12 adults today is actively involved in starting a business, and more than 60% of people between the ages of 18 and 29 say they aim to own their own business. Small businesses can be found across a variety of industries. In 2015, there were over 8 million small business employees in the health care and social assistance sector, and most small business firms (over 4 million) were in the professional, scientific, and technical services sector.

Blog108_SmallBusinessEvolution_Businesswoman-300x225 The Evolution of Small Businesses in the United StatesWhat accounts for the rise of small businesses over the latter half of the 20th century and the 21st century? According to the National Association of Women Business Owners, we owe much of this increase to the civil rights and women’s movements of the 1960s. Particularly in regards to funding, new laws created new opportunities for women and minorities, who had previously faced even greater hurdles in business ownership, to build their own businesses. For example, until the Equal Credit Opportunity Act in 1974, it was difficult for women to get a credit card on her own and establish a credit line independent of her husband. Similarly, until the Community Reinvestment Act of 1977, non-white applicants had a hard time getting loans. Furthermore, with such resources as the Center for Women’s Business Research, the Minority Business Development Agency, and the National Minority Business Council and more opportunities for women and minorities to get an education, the road to entrepreneurship for these groups became much smoother. As of 2018, there were over 12.3 million women-owned businesses in the US, and the number of minority-owned businesses has seen a 600% growth since 1977.

Blog108_SmallBusinessEvolution_ComputersInClass-300x202 The Evolution of Small Businesses in the United StatesTechnology also played a role in the increase in number of small businesses. In the late 1990s, personal computers and printers became more affordable, making it easier to start home-based businesses. The proliferation of the Internet has also made running a global business from home a more seamless process. In 1984, the number of home-based businesses in the US was 6 million. Today, that number is 23 million. With the rise in entrepreneurship, college and universities started offering entrepreneurship programs and courses. According to the aforementioned Baylor University study, over 2200 entrepreneurship courses are offered at nearly 1600 schools across the US.

Blog108_SmallBusinessEvolution_BusinessMeeting-300x200 The Evolution of Small Businesses in the United StatesThe nature of small businesses has also changed significantly over the decades. More of today’s small businesses are using cloud-based technology. Half of cloud-based small business owners are between the ages of 18 and 35. Mark McLeod, founder of SurePath Capital Partners, estimates that by 2025, most small businesses are going to be run by millennials. Because millennials, who are digital natives, are taking over the small business scene, it makes sense that daily business operations are increasingly being conducted through mobile devices. Cloud-based technology is helping small business employees manage operational tasks so that they can spend more time doing what they set out to do. Technology has also made it easier for employees to work remotely, which in many cases helps to keep overhead low.

Blog108_SmallBusinesses_GuyOnPhone-300x200 The Evolution of Small Businesses in the United StatesSmall businesses today are using less paper, and social media presence is of utmost importance. Brands that are not on Facebook, Twitter, Instagram, LinkedIn, and Pinterest are seen as irrelevant, and if they are not publishing content regularly, they are seen as sloppy. Social media is essential these days for customer acquisition and engagement. Blogging is also vital for small business success—especially cross-blogging on outside sites, which can create more exposure.

Blog108_SmallBusinessEvolution_ArtistInStudio-300x200 The Evolution of Small Businesses in the United StatesAre you thinking about starting a small business and want to talk to someone who has already walked the path? Or perhaps you are a small business entrepreneur or employee and want to share your experiences with budding businesspeople. You can do both on Konversai—the world’s one-stop shop for any and all personal human knowledge. The online platform connects knowledge providers and knowledge seekers on any topic of interest through one-on-one live video conversations. Knowledge providers can make extra money sharing their knowledge, skills, and experience on anything they can imagine on their own time and from the comfort of their home, while knowledge seekers can get bespoke service and a personalized conversation with an actual human being catered to exactly what they’re looking to learn on a particular topic—a win-win for both parties involved.

Blog108_SmallBusinessEvolution_Charts-300x199 The Evolution of Small Businesses in the United StatesIf you work for a small business, you’ll also want to check out Konversai’s Global Small Business (GSB) Partnership Program. Konversai has identified that one of the biggest problems facing small businesses is the ability to reach new clients while balancing business operations. The GSB’s goal is to solve that problem by providing a way for Konversai’s hundreds of thousands of users (all potential clients from all over the world) to find small businesses. GSB members would be included in Konversai’s social media advertising. In addition to exposure, members also have full access to Konversai’s platform, making it easy for them to schedule and keep track of all of their transactions. Konversai takes care of the nitty-gritty so that small business employees can focus on doing what they actually love: running their business.

Any and all knowledge, skills, and experiences have value on Konversai, whose mission is to democratize knowledge, put the human connection back into the heart of technology, and make the world better by enabling meaningful and authentic conversations that can enrich and improve people’s lives. Don’t miss out on the opportunity to be part of this mission. Join Konversai today!

By Pavita Singh

 

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