The value of small business

Small, independent businesses have a vital role to play in Minnesota and the Twin Cities. They provide more than half of the employment all across the USA, according to the Small Business Administration (SBA.) During the Clinton recovery in the 1990’s, small businesses created 85 percent of the new jobs, while the Fortune 500 had negative job growth. A survey of Hennepin County businesses in the 1990s, and a recent study of Minnesota businesses by the Minnesota House Research Service, showed that 90 percent of new jobs are in small businesses.

However, if you look at where the state, counties and cities spend public dollars for economic development and jobs, you will find little or none of these resources go to small, independent businesses. It goes to big corporations, developers, stadiums and others who have the wealth to hire lobbyists to get it done.

Small businesses provide employment, create new jobs, provide services and stability to the community, and they often provide the first jobs for youth in the neighborhood. Small businesses create the character and charm of the community and add to the quality of life. Business owners are active in the community and committed to solving problems and dealing with local issues. Small businesses are creative, innovative, adaptable, versatile, and practical. They see new and needed trends quickly and can make decisions to take advantage of them. They are problem solvers.

Money spent at small, independent businesses leaves 25 cents more per dollar in the community than the same dollars spent at a chain store (43 cents, compared to 68 cents; see Big Box Scandal by Stacy Mitchell.) Any public or community money that goes into small, independent businesses is likely to stay in the community. Large corporations can take their jobs and public resources and leave the state or country.

The problem is that small, independent businesses seldom have a voice when decisions are made at the state and local levels regarding public resources for economic development and jobs. It is not a level playing field. Large corporations and wealthy business people have lobbyists to represent their views and needs and can make significant campaign contributions. However, what small, independent businesses do have is numbers. In Minnesota alone there are 504,000 small businesses, according to the SBA.

To solve this problem, small, independent businesses all over the country have been organizing into business alliances. Their goals are generally to promote and strengthen the independent businesses, educate the consuming public to the value of buying locally, and level the playing field between small business and well-financed interests by presenting small business needs and value to public and elected officials. Building on that model, a group of Twin Cities independent businesses formed the Metro Independent Business Alliance (MetroIBA) three years ago. Only small, independent businesses can be members.

Please note, we in small business are not asking for subsidies or a handout; only that we are given the same opportunity that the big, well-financed players are given. One suggestion is to establish a “Small Business Bill of Rights” that will codify a level playing field. Small businesses are the economic engine of Minnesota and America, and it is time that public and elected officials help us maximize our benefit to Minnesota. When small businesses prosper, the community prospers.

“Papa” John Kolstad is president of Mill City Music, a founding member of the Metropolitan Independent Business Alliance and a Seward resident.