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Small Businesses Create 2 Million Jobs

By Maria Contreras-Sweet, SBA Administrator
Published: January 15, 2015 Updated: January 15, 2015

Last week’s jobs report offered more evidence that our economy is gathering a head of steam as we ring in the New Year. Last month, American businesses added back 252,000 jobs and our unemployment rate fell to its lowest level since June 2008. We’re in the midst of 58 month of consecutive job growth – the longest streak on record since the mid-1990s.

Once again, it was not large corporations driving this train, but entrepreneurs and small businesses powering us out of the greatest economic crisis since the Great Depression.  Small businesses created nearly 2 million of the roughly 3 million private-sector jobs generated in 2014. More than 7 million of the 11 million jobs created during our recovery have been generated by startups and small enterprises.

December’s jobs picture is a microcosm of the upswing: 73 percent of last month’s job growth came from small businesses, according to ADP. Meanwhile, twice as many small businesses added jobs as cut them last month, according to a separate report by the National Federation of Independent Business (NFIB), which also found that small-firm revenues are on the rise.

American manufacturing is undergoing its best stretch of job growth since the 1990s. The U.S. auto industry is back, creating a half-million new jobs in the last five years. The United States is now the world’s number No. 1 producer of oil and gas; President Obama’s policies have helped cut our national deficits by about two-thirds; and 10 million Americans gained health insurance in the last year alone.

In short, we’ve come a long way.

Entrepreneurs have been our life preserver in this economic storm, because of their resilience in budgeting wisely and effectively deploying their capital.  While commercial small business lending is still only at 91 percent of the pre-recession level, SBA-backed lending has now eclipsed its pre-recession output. In fact, small business borrowers have received more SBA-supported capital under President Obama than any president before him – $163 billion total since 2009.

 ADP National Employment Report

In other words, SBA continues to play a pivotal role in America’s economic comeback story. Upward pointing arrows on graphs and ascending numbers on spreadsheets don’t always capture the real-life impact our agency has on this nation’s improving economy. But I’ve heard story after story from entrepreneurs who tell me they would’ve gone belly up during the recession if not for timely SBA assistance.

One industry that’s surging is computer systems design, which now employs 1.8 million Americans – 25 percent more than before the recession began. EarthWalk Communications is a pioneer in education technology, bringing mobile wireless computer labs and patented battery technology to schools across the globe. Five years ago, the Manassas, Virginia-based company was forced to cut more than half of its workforce due to recessionary pressures. But in 2010, Earthwalk received a $1.5 million SBA loan to secure additional working capital and refinance its debt. Since then, the company has added back 20 workers and last year celebrated a record year of $3 million in revenue growth.

There’s ample reason to believe 2015 will be a ripe environment for small business growth. Consumer confidence is at a 7-year high. Our economy has added at least 200,000 jobs for the last 11 months in a row, and hiring is at levels we haven’t seen since the Great Recession. The wind is finally at our back, and SBA is ready to help make this a breakthrough year for entrepreneurs on Main Street and beyond.

About the Author:

Maria Contreras-Sweet
Maria Contreras-Sweet

SBA Administrator

Maria Contreras-Sweet is Administrator of the U.S. Small Business Administration and a member of President Obama’s cabinet. The SBA helps both Main Street and high-growth small businesses get access to capital, counseling, federal contracts, disaster assistance and more.

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5 Pillars of Small Businesses Success

By Marco Carbajo, Guest Blogger
Published: January 13, 2015

What does it take for a small business to achieve success?

Whether you’re already in business, or preparing to start a business, it takes hard work, tenacity and drive to achieve a high level of success. Lori Greiner, star shark of ABC’s Shark Tank says, “Entrepreneurs are willing to work 80 hours a week to avoid working 40 hours a week.”

According to Elizabeth Wilson of Entrepreneur Magazine, while some 40 million businesses are started each year, a paltry 350,000 break out of the pack and begin growing and making money. So how can a small business owner overcome some of the common business pitfalls? Marcus Lemonis, CEO of Camping World and star of CNBC’s prime time reality series The Profit, knows all about determining the success or failure of a business. Lemonis says, “Business success is about the three P's: People, Process and Product.” Here are five pillars that make a small business successful.

1) People

If you want your small business to succeed, you need a fantastic team. Russell Simmons, Entrepreneur and founder or Def Jam Recordings says, “Surround yourself with people that are smarter than you.” A company can accomplish amazing things when it has leadership and a team who is inspired, hardworking and believes in the company’s mission.

2) Plan

“Quality is the best business plan, period,” says John Lasseter, chief creative officer for Pixar and Disney. Just about everyone in the business world agrees that having a plan is important. And that doesn’t mean the big formal business plan document you fear like a term paper. It starts small and may grow in time. At a start-up, implementation is everything. That means it’s essential to establish responsibilities, set goals, and track performance. You will also need to answer key questions, such as:

  • Have you identified your target customers?
  • What problems are you trying to solve for them?
  • What will be the most effective marketing and promotional strategies?

3) Process

Dr. W. Edwards Deming said, “85 percent of the reasons for failure to meet customer expectations are related to deficiencies in systems and processes…rather than the employee.” It’s crucial that you have a full and clear understanding of your company’s processes and have the right systems in place.

4) Product

Does your product solve a problem? Does it exist yet? Is there something that is out there that your product does in a different way? Is there a demand for your product? Success in business requires doing something you’re passionate about that fills a need in the marketplace. Debbi Fields, Founder of Mrs. Fields Bakeries says, “Once you find something you love to do, be the best at doing it.”

5) Profit

When it comes to measuring a successful business, profitability is probably the first thing that comes to mind. Is the company making money? A critical component of running a successful business is knowing your numbers. “If you want to be successful in business, you need to become proficient at handling certain numbers. You need to be able to read and understand your financial dashboard” says Dawn Fotopulos, Associate Professor of Business at The King’s College in New York.

Starting and running a successful business can be a fulfilling and rewarding experience. You as a small business owner should never stop learning, innovating, planning and growing. “Leaders spend five percent of their time on the problem and 95 percent of their time on the solution. Get over it & crush it!” says Tony Robbins.

About the Author:

Marco Carbajo
Marco Carbajo

Guest Blogger

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, About.com and All Business.com. His articles and blog; Business Credit Blogger.com, have been featured in 'Fox Small Business','American Express Small Business', 'Business Week', 'The Washington Post', 'The New York Times', 'The San Francisco Tribune',‘Alltop’, and ‘Entrepreneur Connect’.

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8 Steps to Becoming a Consultant at 50+

By Caron_Beesley, Contributor
Published: December 10, 2014

When we think of entrepreneurs, we often picture young, tech-savvy millennials. But the face of American entrepreneurship is actually quite different. A recent survey conducted by Monster.com found that baby boomers take more risks and start more businesses than twentysomethings. With assets such as more wealth (and less debt), wisdom, education and experience, it’s no surprise that the average age of entrepreneurs is rising.

Consulting or contracting is a particularly attractive form of business ownership to older people – you can work anywhere and start-up costs are low. According to MBO Partners, nearly 5 million baby boomers are working as independent professionals – and 83 percent of them held traditional jobs before starting their own businesses.

If you’re interested in consulting or contracting as your second career act, here are eight essential steps to getting started.

The business planning stage

Most consultants and contractors start their businesses with very little financial investment, but that doesn’t mean you can ignore the planning process. In fact, a business plan can help you focus on your goals and the route you need to take to achieve those goals while doubling your chances for success!

If you need help with your plan take a look at SBA’s online, interactive Build a Business Plan tool.

Choose your business structure

Many consultants and independent contractors assume that they need to form a limited liability company (LLC) to operate successfully and with minimum risk. While being an LLC can protect you from personal liability for business decisions or actions of the LLC – the liability protection is limited. In fact, over 70 percent of small businesses operate as sole proprietorships – the simplest way to start a business.

A sole proprietor owns and runs the business – there is no legal distinction between the business and you, the owner. This may be a disadvantage because you can be held personally liable for the debts and obligations of the business.

Managing this and other forms of risk is an important consideration and often requires a layered approach that includes selecting the right business insurance (clients often require that consultants have a form of insurance before entering into an agreement) and consulting an expert about the best structure for your business. Read more about your business structure options.

Financing your consulting business

How much money you need depends on the cost of doing business for the first few months (before you start generating sustainable income) such as the cost of getting business insurance, utilities, incorporation fees, setting up a home office, etc.

If your cash flow predictions indicate you may not be able to cover your expenses during this period, consider your options. Many contractors get around this problem by maintaining their existing full-time job while running their consulting business on the side. If you do need to borrow money, AARP strongly advises against dipping into your retirement funds. Instead, consider other ways to finance your business.

Tax and legal obligations

Starting a business can seem overwhelming and not just because of the legal and tax obligations that you’ll encounter. During the start-up phase, it’s important to get these right.

This includes obtaining the right licenses and permits. If you intend to use a trade name or name your business something other than your own name, then you’ll need to register that name with your local government.

From a tax perspective, consultants need to take care of quarterly estimated tax payments to both the IRS and yours state revenue office.

For a complete list of the legal and regulatory “must-dos,” read “Starting a Freelance Business – How to Take Care of Legal, Tax and Contractual Paperwork”.

Setting your pricing

Consultants and contractors often undervalue their worth for a number of reasons. It can be awkward to talk about money or we underestimate how long things take us, or, worst of all, we want the gig so bad that we underprice it. To help you set your pricing, and negotiate your worth, read How to Calculate and Negotiate Your Hourly and Project-Based Pricing.

Go after your existing contacts

Your current pool of business and personal relationships will almost certainly be the source of your first clients as you start up. When I started my consulting business, my first client was my last employer. It’s been a fruitful relationship on both sides that spans over 10 years. They understand my value, trust me to deliver results and I understand their work practices inside out.  

From there, network out and tap into relationships with former colleagues and industry peers. As your client base grows, hopefully these folks will also become your cheerleaders. Referrals are a huge source of business for consultants.


While networking is important, it’s a good idea to have a marketing plan. Elements to consider include establishing a website (to build credibility, showcase work, promote testimonials and ensure you can be found on search engines). You should also work on refining your marketing message – what you do, for whom, and why you’re different from the competition. Other tactics that can help build your online profile are blogs, social media accounts, etc.

Don’t go it alone

There are a number of SBA-sponsored in-person and online resources that can help 50+ entrepreneurs get started and grow their consulting business. Check out SBA’s 50+ Entrepreneur guide as well.

About the Author:

Caron Beesley


Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

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Helping to Boost Business Development for Native American Entrepreneurs

By Christopher James, SBA Official
Published: November 24, 2014

Native American Heritage Month is a time to reflect on the significant contributions the first Americans made to the establishment and growth of the U.S.  The month is a time for Native people to share their culture, traditions, art, and ways of knowing with the entire nation.  American Indians and Alaskan Natives were also the country’s first entrepreneurs, and the SBA is working hard every day to ensure that the entrepreneurial spirit of Native people continues to thrive.  

The SBA’s Office of Native American Affairs offers a variety of Entrepreneurial Empowerment workshops nationwide.  These workshops provide specialized training to new entrepreneurs and to established Native American businesses that are positioned to grow.  They are developed to be culturally relevant and responsive to the challenges and needs of their communities. 

This year alone we’ve held 19 workshops in 17 states, and more than 50 tribes have sent representatives.  We also hold 8(a) business development workshops nationwide that focus on the unique rules and considerations for tribally and Native-owned corporations and organizations.  In 2014, over 500 individuals representing 109 different tribal communities attended these sessions.  In 2015, we will be increasing our number of workshops to ensure that we reach even more entrepreneurs throughout Indian Country. 

American Indian veterans have played a vital and distinguished role in the United States military for over two hundred years.  In fact, Native Americans serve at a higher rate than all other service members.

In partnership with the SBA’s Office of Veterans Business Development, we held a Native American veteran-focused event called “Boots to Business: Reboot” this August in Albuquerque, New Mexico, which saw over 125 veterans join to receive entrepreneurial training. 

Several months ago I had the opportunity to moderate a roundtable in Oregon City, Oregon, with my colleague Patrice Kunesh, Deputy Under Secretary of Rural Development at the USDA.  Our panelists included SBA Administrator Maria Contreras-Sweet and Phil Karsting, USDA Administrator of the Foreign Agricultural Service.  At the roundtable, we hosted 40 American Indian small business owners and tribal leadership representing nearly 15 different tribes nationally.  The discussion included the importance of international trade for our Native businesses as well as Foreign Trade Zones as a potential economic driver.  The participants ranged in age from tribal elders to young entrepreneurs fresh out of college. 

I hosted another roundtable in Los Angeles with Administrator Contreras-Sweet and the California American Indian Chamber of Commerce in September.  Common threads brought by participants at both events were strong entrepreneurial ideas and a desire to make a difference in their communities.  My family has owned small businesses in Cherokee, North Carolina, for several generations, so I could strongly relate to the concerns, needs, and questions of those in attendance.

For the past 15 years I have worked with Native entrepreneurs and small business owners throughout the U.S., helping them access the tools they need to start, maintain, and grow their entrepreneurial ventures.  In the past year, the SBA has provided over 100 million dollars in SBA loans and microloans to firms owned by Native Americans.  Across the federal government we have also provided over 10 billion dollars in small business contracts to Native-owned businesses through the 8(a) program.    

As my office looks toward 2015, I am excited for what lies ahead.  We will be rolling out numerous new initiatives in the coming months, and we are looking forward to meeting the challenge of increasing the strength and number of successful Native American-owned businesses throughout the nation. 

The interactions I have every day leave me with no doubt that the strength and power of America’s entrepreneurial spirit is as strong in Indian Country as it has ever been.  Let’s work together to ensure that both today’s and tomorrow’s Native American entrepreneurs have the resources they need to make their business dreams a reality as they spur job creation and economic opportunity in their communities. 

About the Author:

Christopher James
Christopher James

SBA Official

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