Small Business, Small Incomes

December 2, 2014/W.A. Smith Financial/Comments Off on Small Business, Small Incomes

Large corporations in America have only been around about 13 decades. Before then, America was built on the backs of small business owners.

Larger companies started to take root in the mid-19th century, led by railroads and industrial firms. Small business owners took a hit but adapted by developing market niches too small for big companies to accommodate or by serving as suppliers to larger firms. Small businesses have never gone away, and today they provide 55 percent of all jobs in America.

[CLICK HERE to read an excerpt from “A History of Small Business in America,” by Mansel G. Blackford at the University of North Carolina Press, Copyright (c) 2003.]

[CLICK HERE to read the article, “Small Business, Big Impact!” from The U.S. Small Business Administration, accessed Oct. 17, 2014.]

In the recent economic recovery, small businesses have been more instrumental in forging the path toward economic growth, generating two-thirds of all new jobs. But the true measure of success comes from hiring the right people with the experience needed for the job they hold. The bland “jack-of-all trades” position is buckling under the need for more specialized skills and knowledge. In traditional college curriculums, many students may not be qualified to hold the high-tech jobs that are available in the country’s newly energized manufacturing industry.

Still, with six straight months of employment gains above 200,000, the prospects for stronger economic growth are indeed on the horizon.

[CLICK HERE to read the article, “Small Businesses at Head of Trend in New Job Creation,” from The Bay State Banner, Oct. 16, 2014.]

Of course, successful small businesses tend to grow into larger companies. But is it a given that they will succumb to big business policies, politics and problems? Not always. Kip Tindell, the chairman and CEO of The Container Store, started his company with two buddies and an initial investment of $35,000. Today, the man who sells boxes has honed his management skills by thinking outside the traditional box. Just check out a few tenets on which he bases his company’s success:

  • The average retail clerk earns $48,000 a year.
  • He believes that if you hire great employees and pay them twice as much, you’ll get three times the productivity.
  • He believes women make better executives than men because they have high emotional intelligence, keep their egos in check, are comfortable surrounding themselves with people better than them, aren’t hungry or insecure and are calm and have self-awareness.
  • Women hold about 70 percent of the top leadership positions at the company.
  • The company’s turnover rate is just 10 percent, compared to the retail industry average of about 100 percent.
  • The Container Store has never laid anybody off in the history of the company (although it does fire people in pursuit of meritocracy).
     
[CLICK HERE to read the article, “The Container Store CEO Says ‘Women Make Better Executives than Men,'” from Business Insider, Oct. 13, 2014.]

A lot of media attention has been given to the growing disparity among incomes in the United States. People who earn more than they need to live on are able to take advantage of market opportunities, while those who live paycheck to paycheck have little chance of ever getting ahead. It’s just one of the growing economic problems in this country for which no one has successfully prescribed an antidote.

[CLICK HERE to read the article, “Yellen ‘Greatly’ Concerned by Widening Inequality in America,” from Bloomberg, Oct. 17, 2014.]

[CLICK HERE to read the article, “Americans Consider Inequality World’s Greatest Danger,” from PBS NewsHour, Oct. 17, 2014.]

Whether a small business owner, an employee at a large corporation or a retiree living on a fixed income, we tend to spend much of our time focused on the here and now. Please contact us for help creating a retirement income plan to help improve your financial future. We’ll do what we’re good at, so you can focus on what you’re good at.


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