Do You Mind Being Called A SMALL Business?

Posted: Mon, 03 Dec 2007 15:25:18 +0000

“Hi, my name is Dharmesh, and I’m a small business person. No wait ….”

By just about all definitions of the term, my company, HubSpot is a small business. We have about 20-25 people in the company and are a business (we sell a software system for internet marketing). But, if you meet me at a party, when I introduce myself, I almost never say that I’m working for a small business. I generally think of myself not as a small business person, but as a startup person.

Is the startup segment a subset of small business? The analytical geek in me doesn’t think so. The “startup” classification is based on the notion of time (i.e. you recently “started”) whereas the “small business” classification is based on the notion of size. But, the practical side of me thinks of one as being essentially a subset of the other. So, technically, like most other startups, my company is a small business.

If Not Small Business, What Else? So, why do some of us sub-consciously resist the “small business” label? I think it has to do with the word small. Not that there’s anything wrong with being small. It’s just that Iwant to be big. But, try as I might, I can’t really come up with a better label for this market segment than “small business.”  Other variations I’ve come up with like “nimble business” and “growing business” are either platitudinal, inaccurate, or both. I’m becoming increasingly convinced that “small business” is not so bad. It’s accurate, it’s simple and best of all, it’s descriptive.

Small Business Is A Big Deal: Fact is, the small business label is getting a lot of attention and resonance. The existence and proliferation of the “small business” label helps many types of organizations. For those looking to reach out to small businesses, they can better target their offering.

Major publications like the New York Times and The Wall Street Journal attach the term “small business” to relevant content. Did you know Fortune magazine has a publication (and website) devoted to small business called Fortune Small Business? Major companies like Dell, AT&T and Microsoft have areas of their websites designed for small business. For the small businesses themselves, the label helps them find content, products and services which might be of interest.

It’s Great To Be A Small Business: So, small businesses everywhere STAND UP and be proud! It doesn’t matter if you’re a venture-backed software company or a highly specialized consulting firm with three partners — all small businesses likely have an overlapping set of problems and needs. By continuing to promote and encourage use of the small business label, we will attract more investment and attention into the sector. This will lead to more products, services, content and innovation designed specifically for us. This is a very good thing.

So, let me try this again:

“Hi, my name is Dharmesh and I’m a small business person!”

* * * * *

About the Author:  Dharmesh Shah, who usually doesn’t like to talk about himself in the third-person, is founder and chief software architect of HubSpot. HubSpot provides the industry’s firstinbound marketing system for small businesses. He is also the author of a popular startup blog, OnStartups.com.

Tags: small business, entrepreneur, startup

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Jack Weil, 106, runs the Rockmount Ranch Wear, a Denver, Colorado-based apparel firm. What keeps him going to work every day: The chance to spend time with his son and grandson, who have both played a role in running the business. “I think I’m the happiest and luckiest guy in the world,” Weil says.

Eighty-four year old Phyllis Apple agrees. The CEO of the Apple Organization, a North Miami Beach, Fla.-based public-relations firm, Apple says she’s in great health and has plenty of time for golf and needlepoint on the weekends —

despite working full time. “I have everything I want,” she says. “Why should I retire?”

Galvin and Apple, like the other members of Inc.com’s 8 Over 80 list, are in good company among a small but growing number of unstoppable octogenarians (and older) who are spending their twilight years presiding over new and old ventures alike, rather than hitting the shuffle board courts or joining the bridge club. If this eclectic group had an honorary chairman, it would be Jack Weil, the 106-year-old CEO of Rockmount Ranch Wear, a Denver, Colorado-based apparel firm, whose cowboy shirts were popular with former President Ronald Reagan and were more recently worn by the cast of Brokeback Mountain.

What keeps these new old-timers going? As baby boomers begin to hit retirement age — triggering an expected seismic shift in the labor market, among other social and economic shakeups —

economists, policymakers, and researchers are asking that very question. The answer that’s emerging lies in a mix of access to capital, improved health, technology, and maybe a little old-fashioned chutzpah.

What’s certain is that Americans are living longer than ever. And many are hitting retirement age — or well beyond —

at the helm of their own business. Currently, close to 7 million workers ages 50 and older, or roughly 16 percent of the entire U.S. workforce, according to the Labor Department, are self-employed. About a third made the transition to self-employment after age 50, with rates of self-employment increasing with age. While only about 2 percent of all U.S. workers are 81 or older, nearly all of them are self-employed. In other words, if you’re over 80 and still in the workforce, chances are pretty good that, like Bob Galvin and Phyllis Apple, you’re calling the shots.

According to labor and age researchers at the RAND Corporation, a Santa Monica, Calif.-based public policy think tank, the older self-employed people tend to be predominantly male and well educated. The businesses they run are small —

typically with fewer than five employees, if any. Most operate on their own or with a spouse, and the sectors they work in tend to be those that are more conducive to working alone and for yourself, such as agriculture, retail trade, business services, management, and sales.

“Like any generation, these are entrepreneurs driven by hobbies, necessity, lifestyle, innovation —

you name it,” says Judith Cone, a vice president at the Ewing Marion Kauffman Foundation, an entrepreneurship group based in Kansas City, Mo. “They ain’t all the same.”

Still, like their younger counterparts, older entrepreneurs are risk-takers. Often they’re launching businesses by cracking open their retirement piggy banks at a time when their peers are tapping personal savings for travel, summer homes, and other more leisurely pursuits. A recent survey by the Hartford Financial Services Group found that a vast majority of retirement-age boomer entrepreneurs preferred funding start-ups with personal savings, rather than loans, credit cards, or other debt-related financing. Yet, by digging into their savings, older entrepreneurs are left with far less room to maneuver, in terms of time and energy to recoup lost savings, according to Hartford vice president John Diehl.

These older entrepreneurs “face a distinct challenge in that they have a shorter time horizon to rebuild their wealth should their investment in their business not produce desired financial results,” Diehl says.

Cone adds that on the upside, older entrepreneurs who do turn to banks and investors for start-up capital have the advantage of a strong professional network. “If you’re going to try to get angel funding, your network is going to be much deeper at that stage of your life,” she says.

Despite the financial stakes — or perhaps because of them —

entrepreneurs who launch their businesses after age 50 are less likely than regular wage and salary earners to consider retirement at all. Most expect to continue working well after 65 and aren’t the least bit worried about retirement income, according to RAND researchers. In fact, those that do eventually retire are often forced to by poor health.

Often, it’s the business that keeps them going. At 106, Jack Weil says he still goes to work at his western apparel company every day in order to spend time with his son and grandson, who have both played a role in running the business. What keeps him going, he says, is the chance to see them carry on a venture he built long before they were born.

“I think I’m the happiest and luckiest guy in the world,” Weil says.

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