ONE STAT THAT MATTERS

The huge potential of small business

Sometimes life comes full circle. Once upon a time we dreamed of building a successful marketing agency. More than 40 years later, we’re consulting with some of today’s biggest brands to help other small businesses realize the American dream.

The irony isn’t lost on us. Nor is the fact that most small businesses don’t last nearly as long as ours. But it doesn’t have to be that way. As this one stat shows, it’s time for corporate America (and the government) to give small business the attention it deserves as a primary driver of the economy.

Those jobs are adding trillions to the economy with 43.5% of GDP now coming from small business.² Looked at from this perspective, the impact of small business is huge.

Overlooked and underestimated
Despite these impressive numbers, small businesses tend to be somewhat of an afterthought for many. We’ve seen it ourselves in B2B marketing: bigger companies rarely allocate 40% of their marketing budgets to targeting small businesses (as GDP contribution would suggest they should). Given the growth potential of these businesses, we think that’s a missed opportunity.

On the rise since COVID
With all the obstacles small businesses can face – from financial hurdles to marketing that isn’t adequate to gain a foothold – you might think new entrepreneurs would be deterred. But just the opposite is true. Boosted by the pandemic’s jolt to the status quo and the resulting opportunity for at-home workers to hatch new plans, new business applications in 2024 surged 50% from 2019 levels.

As a women-owned small business, we’ve been heartened to see this upswing, as well as a rise in the general diversity of these new entrepreneurs. Encouraging as all this is, however, it underscores the need to better support those now taking their shot at the American dream.

Making small businesses stronger
Due to their size disadvantage and vulnerability to growing pains, small businesses need a crucial leg up. With the election on the horizon, business development is again becoming a topic of conversation with promising new policies being floated to jump-start growth, including a tenfold increase in tax deductions for startups.

Another recent proposal aims to promote and support employee ownership of small businesses, which could have multiple benefits. Giving employees a stake in company ownership makes them more invested in its success. Plus, it could help close our society’s wealth gap by giving workers a new way to increase their long-term assets.

We can do better
Right now, only 25.6% of small businesses survive for 15 years.³ We’d like to see more enjoy the longevity that we have. If you’d like to discuss ways your company could strengthen its outreach to small businesses, let’s talk ›

¹ U.S. Department of Treasury, “Small Business and Entrepreneurship in the Post-COVID Expansion,” September 3, 2024.

² Small Business Administration, “Frequently Asked Questions About Small Business,” July 2024.

³ SBA, “FAQs About Small Business,” July 2024.