Small Business Administration : Small Businesses

4356 Words Jul 29th, 2015 18 Pages
Small Businesses
The Small Business Administration defines small business as a business with 500 employees or less. Small businesses are well known and acknowledged worldwide as important contributors to economic development and job creation. They also play a big role in the general health and welfare of economies, both nationally and internationally. The small business sector represents a statistically significant proportion of the world economy. (William Gale and Samuel Brown 2013) The U.S. Small Business Administration (SBA) reported that small businesses represent 99.7 percent of all employer firms. Small businesses have paid 44 percent of the total United States private payroll, and generated 64 percent of new jobs since 1995, according to the SBA. Small businesses contribute to local economies by bringing growth and innovation to the community in which the business is established. Small businesses also help stimulate economic growth by providing employment opportunities to people who may not be employable by larger corporations. Small businesses tend to attract talent who invent new products or implement new solutions for existing ideas. Larger businesses also often benefit from small businesses within the same local community, as many large corporations depend on small businesses for the completion of various business functions through outsourcing.
Correlation between Entrepreneurship and Small Businesses
Entrepreneurs are people who create new…
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