By Pat Gartland, SBA Regional Advocate

Big houses.  Big cars.  Big meals.  Some things seem to grow bigger and bigger in Georgia.  But, there is one small thing we should not overlook in our super-sized world.  That is small business.

Because they are small, these businesses are often overlooked.  Yet, here in Georgia they play a big role.  Think about your day.  Where do you shop?  Where do you eat?  Where do you work?  Chances are the answer to many of these questions is “at a small business.

The latest federal data show just how important small business is for our economy.  Over 99 percent of all businesses are small, they employ more than half of the private non-farm workforce, and they generate more than half of our nation’s gross domestic product. 

Moreover, small businesses are the innovators, with new products, ideas, and services.  Research from the Office of Advocacy of the U.S. Small Business Administration documents that small patenting firms produce 13 to 14 times more patents per employee than larger firms do.  These patents are twice as likely as those from large firms to be in the top one percent most cited by other inventors.

The same thing is true for Georgia.

The Office of Advocacy recently released its latest Georgia Small Business Profile.  Citing a variety of sources, it documents the number and type of businesses, ownership demographics including minority and women-owned statistics, employment and financing data, and other business information.  The numbers clearly show how important small businesses are to the state’s economy. 

In 2005, an estimated 813,100, or 97.8 percent, of the state’s businesses were small (fewer than 500 employees).  They employed 1,549,208 workers, and in the latest year studied, they created 71,096 net new jobs for Georgia.

Their diversity broadens and deepens the state’s economy.  In the latest year studied, women-owned firms totaled 196,195, and they generated $30.0 billion in revenues.  Moreover, there were 18,310 Hispanic-owned firms, 90,461 Black-owned firms, and 26,916 Asian-owned firms.  Clearly, small business ownership is drawing more and more of the state’s residents into the economic mainstream.

Office of Advocacy research shows that small business creates 60 to 80 percent of the net new jobs in our economy.  This engine of growth powers our economy, yet like any other engine, it needs fuel to run efficiently.  That fuel is a small business friendly environment that encourages entrepreneurial success.  Unfortunately, because they are “hidden in plain sight,” many policymakers do not understand how their programs, rules, and regulations can harm small business.  That is one reason why just complying with federal regulations costs the nation’s smallest firms $7,647 per employee each year.  That is 45 percent more than the per-employee costs of their larger counterparts. 

The uneven burden of regulations on small business is not only a problem at the federal level.  State and local regulations can also fall disproportionately on small businesses, cutting off the fuel supply to our economic engine.  To find out just how small business friendly Georgia’s regulatory process is, and what policy makers can do to improve the climate for small business to unleash the job-creating and community-building power of entrepreneurship, visit www.sba.gov/advo/laws/law_modeleg.html.

Georgia’s small businesses are nimble, dynamic, creative, and a vital part of every community across the state.  Their job creation and economic growth are major driving forces in the economy.  Even though they are sometimes hidden from view, they play a big role and make the state a great place to work and live.

Pat Gartland is the Office of Advocacy Regional Advocate for Georgia.  He is the direct link between small business owners, state and local government agencies, state legislators, small business associations, and SBA's Office of Advocacy.  Contact Pat Gartland at (404) 331-3081 or patrick.gartland@sba.gov.