Small Businesses Have a Big Reach
A tiny, Ohio-based Vita-Mix corporation has been grinding and blending for 70 years.
Known for its high-powered, durable blending machines, "Vita-Mix" was coined with an emphasis on "vita," meaning "life." The company was born in 1921 when founder William Barnard, after helping a friend through a significant illness, realized the tremendous impact whole-food nutrition had on health. Simple Vitamix products evolved to industrial strength mixers that could puree raw foods, blend hot soup, grind grain, or knead bread dough.
Vitamix rarely sold products internationally before the late 1990s. But as sales slowed in the U.S., the third generation of Barnard family owners decided to go global. After hiring international sales manager James Smith, exports soared to 20 percent of yearly profits, growing hundreds of new jobs in the outskirts of Cleveland. "Exporting is the salvation of our standard of living and the security of our workers," said Smith. "It makes me proud as heck."
A Growing Reach
Vitamix is just one small business with a large global reach.
According to 2017 statistics from the Small Business Association, nearly all of U.S. exporters are small businesses. Small businesses exported $440 billion in 2015, from nearly 288,000 firms representing 97.6 percent of all exporting firms in America. Forty-eight percent of businesses said it took them just a few months of research before they started exporting, while 36 percent said it took them a month or several months to get started.
Small businesses that export report increased sales, diversified markets, and increased long-term stability. Vitamix CEO Jodi Berg said Vitamix now exports at award-winning levels to Europe, Asia, and Australia. But before that could happen her team had to disrupt a stable business plan with a new, global vision. Does she see herself as an entrepreneur who took risks?
"I don't," Berg said. "To make big things happen, you have to make big moves. But big moves don't have to be risky. If you describe a risk taker as someone who takes big moves, I'll be that. But we did our homework."
Four Remarkable Small Business Facts
While big business often dominates headlines, small businesses play a vital role in exporting products, creating jobs, and producing wealth for thousands of families.
Here are four remarkable facts about the big impact of small businesses:
1. Nearly all are small.
Small businesses make up the vast majority of companies in America, comprising 99.9 percent of all firms. Out of 29.6 million businesses, all but 19,000 are small!
2. Half are home-based.
A home-based business may have activity outside of the home, but it is operated primarily from the home.
Industries where home-based businesses dominate include information (70 percent), construction (68.2 percent), and professional, scientific, and technical services (65.3 percent).
3. Involve family and personal financing.
About one in five small businesses are family-owned, and 21.9 percent of small firms have used personal or family savings (versus business or banking loans) to resource expansion.
The one-year survival rate for businesses hit 79.9 percent in 2016, the highest level since 2006.
About half of small businesses survive five years or longer, and one-third survive 10 years or more. The longer a company is in business, the more likely it is to stay in business.
According to the National Association of Small Businesses, entrepreneurs say economic uncertainty, health insurance costs, and a decline in customer spending or cash flow are the biggest challenges they face. Still, most business owners are fairly optimistic: 75 percent say they're confident in their own business and its future.