Why small business ownership matters: story + statistics

20 Oct
4 min read
Why small business ownership matters: story + statistics
Every business that we know of today began as a dream, which then turned into a small business. —Square

Our small business origin story

Every business has an origin story and this is ours, as told by the Founder, Matt.

To put it quite simply, if COVID didn't happen, Foundry wouldn't exist. And, to explain why, let's go back to October 2020.

I was sitting in my living room, watching the news, and a story popped up talking about businesses in the area that had shut down because of the pandemic. Now this is, unfortunately, quite common.

I thought back to my own home town. Where's the ice cream shop that I used to go to as a kid? It's gone. And the restaurant that the family used to go to on weekends? Gone. Hundreds of thousands of businesses in every community, in every town, across the country. Just vanished.

So it was there —watching that news story— that it hit me. I knew exactly what I had to do.

* * *

How many small businesses have closed?

Because the pandemic isn't over, we don't have specific numbers yet. But it's somewhere between 31% and 39% according to data sources. And Vice President Kamala Harris stated that roughly 1/3 of small businesses closed due to the pandemic.

Although the Paycheck Protection Program (PPP) distributed more than $800 billion to small businesses between April 2020 and June 2021, 37% of the business owners we surveyed who are at risk of having to permanently close their business say they never received a PPP loan. —Digital.com

I started Foundryy in 2020, in that moment, when everything seemed broken. I saw our unprecedented struggles as a real-time failing of the American society. And I wanted answers.

At first I turned to the history books, looking for other examples of things like this happening. You may be surprised to know that I found dozens —and not just in America. So I kept studying —history, psychology, sociology— I wanted to fundamentally understand WHY this kept happening.

* * *

What's the history of "small business"?

The term didn't really exist as a concept until "BIG business" came along, which started to emerge in the late 19th century and was solidified in the 1920s.

"The notion of business as “big” and “small” fits into cultural and social shifts of the 1920s and 1930s[...] The emergence of the middle class, organized labor and the golden age of Main Street commerce raised the country’s collective awareness that businesses came in two sizes, big and small." —SmallBusiness.com

And, nowadays, when it comes to the definition of small business, it's generally defined as an independent business employing fewer than 500 people (but, as we saw with the COVID small business relief fund fiasco, this isn't always so clear).

* * *

Whenever there’s massive inequality (which we have on MANY dimensions) it comes out in these events of huge social unrest. Right now we are decades into a continuous trend of those inequality gaps growing within the US.

The 3 major levers that traditionally factor into this wealth gap are:

  1. access to quality education
  2. access to quality healthcare
  3. access to quality employment

I wanted to do something to help close these gaps. And I knew this meant supporting small businesses, which employ more than 65% of the country. So that's why I created Foundryy.

* * *

What's the economic impact of small businesses?

An indicator of the overall health of our economy is small business. But why is it so critical? Why does small business have such an impact on the economy at large?

According to the Small Business Administration (SBA),  99.9% of all companies are small businesses. But 81% of those businesses have no employees. So, in terms of impacting the economy, only 19% of them are creating jobs.

Even though 19% may not seem like a lot, it equals about 6 million small businesses (compared with a total of 20,139 "large businesses"), which is how small businesses account for more than 65% of net new job creation in the last two decades.

* * *

Now, everything that we do at Foundryy is to make it just a little bit easier for you to start a small business —and run successfully.

Because this issue doesn't magically go away when the pandemic does. Next time it could be another recession or a natural disaster or a housing crisis. Every time something comes around to shake the world, small businesses suffer. And when they suffer, communities suffer. And when communities suffer, we all suffer.

That's why we need YOU. You the emerging entrepreneur. You the builder, the maker. You the creator. We need you, more than ever, to build the things that we've lost —to create the kind of communities we all want to live in.

That's why everything that we do and every product or service or idea that we create at Foundryy serves ONE purpose —to make it easier to start a profitable business. That's the reason I became a small business owner.

* * *

So now the question is:

What's your reason for starting your own business (or wanting to)?

What's your origin story? Share a post detailing your reason for wanting to get into small business and tag us @Foundryy on Instagram or LinkedIn. And we'll feature our favorite stories in an upcoming blog post!

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