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Small is the new big

The importance of small business to today's economy

Whether it's hirings or firings, record-setting quarters or shareholder unrest, the nation's big businesses tend to grab the headlines. The real story of today's budding economic recovery, however, is likely to be found among the many small businesses dotting the landscape.

"I think it'd be difficult to overstate the impact a healthy small business environment has on an area," Rehmann Principal Dick Henderson said. "It's especially important in an area like Lansing, which does not feature one or two disproportionately large employers, but rather many smaller, diverse employers."

According to Henderson, a successful small business projects positive reverberations throughout its community in a number of ways, including:

Jobs. The most obvious way a small business can positively influence its community. Over 1,000 new jobs were reported by growing small businesses in Michigan in December alone, according to the Small Business Association of Michigan's (SBAM) Michigan Jobs Insight website. A portion of those jobs were right here in the Lansing area. 50 new jobs in transportation, 16 jobs with a construction company, ten at an office supply company - it all adds up. (Of course, larger fast-growing companies are vital, as well. Greater Lansing has its share of those, too, including General Motors, Dean Transportation, Delta Dental and Dart Container Corporation.)

Business ecosystem support. Small businesses rely on other businesses, big and small alike, for services and supplies that can range from accounting to office equipment. "Every successful small business helps support other businesses," said Rehmann Principal Mary McCune. "If I open a coffee shop, I'm going to need all sorts of things like copy paper, paint, maybe some locally-farmed produce. That's money that I'm putting in the hands of another small business owner." A statewide initiative called Pure Michigan Business Connect takes this ecosystem idea one step further by not only promoting Michigan-based businesses to other Michigan-based businesses, but providing the infrastructure for established businesses to provide services to growing businesses.

The "It" factor. In Hollywood parlance, the "It" factor is that indefinable quality that differentiates mere actors from genuine stars - you either have "It" or you don't. A successful small business can cast a similar spell on a community. A prominent recent example is the effect the restaurant Slows Bar-B-Q had on Detroit's Corktown neighborhood. The renowned eatery spurred a micro-renaissance that saw offices and other establishments open up in the immediate vicinity. Like many small businesses, Slows started as a passion project - and more such passion projects may be coming to a neighborhood near you. "When the economy dips and people find themselves out of work, they sometimes turn toward their personal interests for the next step in their careers," said Jeff Smith, Co-Director of the New Economy Division for the Lansing Economic Area Partnership (LEAP). An electrician who suddenly finds himself out of work might decide to finally open his own landscaping business. A store manager downsized out of her job might decide to pursue her first love, graphic design, by opening a firm. Said Smith, "We're not just seeing this with young entrepreneurs. We're seeing it with people who have been in the workforce for a while." Smith credits a combination of relaxed state controls and the 21st Century Fund for contributing to a pro-growth environment. "The support system that may not have been in place in the last 100 years is now in place across the state and especially in Lansing," he said.

So while the headlines may lead you to believe differently, don't overlook the contributions small business makes to the community and its economic health. "Big business deserves the interest it merits, but a big chunk of America's economy rests with a lot of places you drive by on the way to work," Henderson said. "Maybe next time you'll notice them a little more."

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