Another New Year is upon us, hopefully more optimistic than the past. Better economic news, a rising stock market and a stubbornly slow upward movement in small business job creation. Are we returning to the way things were in the 90s? Not if we examine the make-up of the new entrepreneurs. There are more women, continuing a growth that started several years ago. While males are still more predominant in owning and running small businesses, new business start-ups by women are about equal to those of men. We are also seeing more minorities. Small businesses have historically been the economic entry point for immigrants and that is more true to day than ever before. Recent census bureau statistics indicates that the population growth of Texas, growing about 1.8 % annually is being fueled, in great measure, by continuing immigration growth. Aiding in the growth of minority business is the fact that venture capital is becoming more available to this growing entrepreneurial segment. A recently released study, "Minorities and Venture Capital" by William Bradford, professor of finance and business economics at the University of Washington in Seattle and Timothy Bates, professor of economics at Michigans Wayne State University indicates that minority businesses should be able to access regular financing, because recent data suggests these investments are providing competitive yields with similar investment in other enterprises. As the minority and immigrant entries in the small business arena grow, there is also an aging of the entrepreneur, most likely caused by reductions in staff by the larger corporations. New corporate opportunities are now more limited for many whom lost out during the recent downturn. No longer is the security of the large corporation taken for granted as it once was. These middle-aged entrepreneurs may approach small business as an opportunity. But many may not be prepared to work as hard and as long as the younger entrepreneur, who starts from a much different workplace experience. The aging entrepreneur may also be more service orientated trying to utilize his years of experience to help others, but often with only limited success. Additionally, a much larger growth is taking place in the service areas and high tech areas. Once a smaller segment, service industries are now the fastest growing segment, outdistancing the retail sector. The smaller manufacturing segment continues but is no longer growing. As the growth of minority entrepreneurs, Asian, African-American, Middle-Eastern and Hispanic becomes more prominent, and immigration rates continue to grow well into this century, what effect will it have on small businesses in America, in Texas and in the Houston metropolitan area? Languages, other than English, will continue to be heard, encouraging minority businesses to deal preferentially with similar ethnic owners. Will this help or hinder your small business? Much has also been said about preparation for retirement. Seldom a day goes by that we are not reminded to save more in our 401ks. For many this means a longer worklife, not only driven by necessity but by the reality that retirement, which means stopping work, isnt as satisfying as once thought. The remedy is to have your own business and work as long as you wish We know that small businesses will continue to fuel the economy. They will continue to create about 75% of the new jobs. Many of the service-orientated businesses may be working out of their homes. We will see an aging of the new small business owners. Coupled with female and minority owners, we can expect them to increase their political muscle both for small business issues as well as women, minority and aging issues. And finally we will see many small businesses servicing more and more small businesses. We must recognize that the small business world is changing substantially and that is good. The entrepreneurs of the world must be alert to deal with these changes. New and emerging small businesses will be our suppliers, our competitors and our customers and we must understand them all to survive in the ever-changing world of small business. May 2004 |
