Small Business: Its Place and Problems

Abstract

Small businesses have played a significant role in the United States economy throughout U.S. history. In order to better understand their impact, the research examines the role of small businesses upon the U.S. economy, as well as the impact of small businesses on post-World War II employment and wealth. The definition of a small business is discussed; small businesses are defined in terms of size by several governmental agencies, including the U.S. Department of Commerce and the Bureau of Labor Statistics. The prevalence and distribution of small firms is examined, based on both pre-war and post-war statistics. Several industries are studied, including distribution (e.g. retail and wholesale trade), services (e.g. transportation, communication, insurance, real estate), and production (e.g. manufacturing, construction, mining). The characteristics of small businesses, especially those that influence mortality and failure, are identified. Both internal and external factors influence the management of small firms and may contribute to organizational problems. To succeed as a small business owner, substantial financial backing and availability are necessary; this issue and its associated problems are discussed at length. Both public policy governing market and firm issues and market competition within and across industries may impede or promote small business survival and must be considered when examining both small business entry and survival. The advantages created via attendance at a business college significant impact the chances of firm survival and success due to the helpful skills and knowledge attained via these programs. Areas of future concern and research are identified and discussed. (AKP)