In an online column published earlier this month in Entrepreneur’s Daily Dose, Catherine Clifford reports that the one of the unsung business success stories is the contribution of small businesses. While larger companies continue to hire at a very slow pace, small businesses account for nearly 97 percent of all private sector hiring.
Looking at the jobs report for April 2012, the overall number of private sector jobs went down since March, but only 4,000 of the 119,000 jobs added in April were at large businesses. A large business is defined as a company with at least 500 employees. Compared to the 58,000 jobs added by small businesses in the same month, it’s clear that small business success is contagious. Medium-sized businesses were a large part of this number as well, adding 57,000 jobs during the month of April.
Despite the good news for small business; the truth is that all businesses are hiring fewer people and April marked the lowest number of new jobs added within the private sector in seven months. In another report published by Intuit, the Small Business Revenue Index indicated that small business successis just now returning in the form of dollar figures. Revenues are topping pre-recessionary levels within the fields of science, technology and professional services for the first time since 2007.
What does this mean for budding entrepreneurs?
The economy might not be fully recovered for quite some time yet, but the trends for small business success are a good indicator that this is a sector that will bounce back quickly. Entrepreneurs who want to buy an existing small business or start a new one would be wise to get started on it this year. Interest rates for small business loans and mortgages are at their lowest level in decades, and business owners are anxious enough to keep their prices competitive. Small business owners would be wise to move cautiously into a new business venture and avoid companies that depend on a strong construction or housing market.
Another key element to small business success is hiring.
If you’re planning to buy a small business, it’s important to interview current managers and employees first. The health of a business is usually reflected in the attitudes and professionalism of its employees. Recruiting the right group of employees can be challenging, but you don’t want personnel problems to plague you during the initial weeks of ownership. Be sure you have the right team in place and learn how committed they are to their current career path.
In today’s economy, business success begins with a comprehensive business plan. Whether you buy an existing business or start a new one, this plan will be your guide to a future of financial independence.