When I worked at KPMG, the big international accounting and consulting firm, there was one senior manager who made me report to his office every morning so he could "inspect" me. That's because, having just graduated from college and with no prior training, I could barely remember to wear the same colored socks, let alone properly knot my tie. I would frequently forget my belt. Or not comb my (long-forgotten) hair. KPMG was, and still is, a giant firm. And our clients were amongst the biggest companies in the world. There, I not only learned how to analyze financial statements and question transactions, but I also learned how to dress and how to behave in a corporate environment. I learned about office politics and how big businesses were run. Those lessons have helped me throughout my professional life. Particularly in running my small business.
Which happens to be what the country is celebrating this week. This week is National Small Business Week.
In Washington and around the country, the Small Business Administration and other chambers of commerce and similar organizations have been holding events celebrating small business. Big companies are launching campaigns and releasing surveys all timed around the festivities. Even the president has joined in the fun, having lunch at a diner with a few "typical" small business owners so that he can discuss the issues and let us all know of his support. He even released a new tax proposal targeted at small businesses.
I run a small business. I speak to small business people all around the country. I write blogs about and for small business owners. National Small Business Week? It's a nice thing. But what we should really be celebrating are big businesses. What we should really have is a National Big Business Week.
Except that this is too politically incorrect. Imagine the president hoisting a beer with the CEOs of Exxon, DuPont and General Electric and then proposing tax breaks for them. Or a series of events in Washington put on by the... Big Business Administration? The public would be outraged. The 99 percenters would re-organize, pitch tents near Battery Park and parade down the Mall. The media would write articles defending the common man, the hard-working small business owner, the blue collar worker while attacking those corporate giants that are at the center of the celebration. No, we're not going to see a National Big Business Week anytime soon. But we should.
Because it's the big companies in this country that are truly the engines of our economic growth. It may be politically correct to celebrate the little guy. But it's the big guy who should be receiving the attention.
Yes, there are anywhere between 20 and 30 million small businesses in this country depending on who you ask. But half of all employees in the private sector are employed by big companies:
About 28 percent, or 30.4 million Americans, are working for a company with 49 employees or less, while about 26 percent, or 28.3 million, are working for a company with 50 to 499 employees. The big employers also have seen the biggest growth in employment over the past two decades, according to the Bureau of Labor Statistics.
(Speaking as a person who runs a ten-person company, I consider any company with more than 150 people to be pretty big, but that's another topic for another time.)
Former White House economics adviser Jared Bernstein isn't much impressed by small business either. Last October he wrote:
The next time a politician tells you how he or she is for small business (which will likely be the next time you hear a politician say anything), be mindful that to the extent that size matters at all for job growth, it's really about new companies that will start small and, if they survive, perhaps grow large. Everything else is largely noise -- and too often, noise that has little to do with what this economy really needs.
According to the Wall Street Journal, big companies have emerged from the recession leaner and stronger and poised for growth.
Small businesses need big business. My small business needs big business. Without big corporations, a company like mine couldn't survive. At the very least, I would barely know how to dress professionally! Like my own experience, big companies train the entrepreneurs of the future. Sure there are the Bill Gateses and the Mark Zuckerbergs. But these are anomalies. Most startups are founded by former big company employees. They learn how to do things right and where things are wrong by working for the giants.
Jeff Bezos, the CEO of Amazon, got his education on Wall Street. Gordon Moore, the founder of Intel, learned the ropes at the Fairchild Semiconductor Corporation. The list of other small business owners who once trained at big companies (made up of names you and I have never heard of) is endless.
Big companies hire the smart college grads and teach them all the stuff about business that you don't learn in school. Many of these people stay in the corporate environment. And just as many take what they learned and start their own companies. Most of them, like myself, have nothing but good things to say about their experiences working at the big firm.
Say what you want about small businesses, but my most profitable clients are my big clients. My firm has about 600 active clients, most of them small. And most of my small customers are great. They're truly my company's bread and butter. But the meat comes from my handful of large clients. Those are the guys with the bigger budgets, and the greater room for error. Where a small client balks when we charge for the time we need to spend to plan a project, a big customer wonders if we should be spending more. Where a small client argues over every penny on an invoice, a big client (once we figure out how to get our invoice through their accounts payable maze) normally pays in full when due (or 800 days later in some cases!). There are lots of reasons why doing business with a smaller company is better than with a bigger company. But the numbers don't lie. The projects with my larger clients are bigger, better and more profitable.
Big firms enable startups to get off the ground. They invest in and partner with young companies and provide sponsorship dollars to organizations and industry groups that support new technologies and ideas. Of course they're doing this for their own benefit, hopefully finding that new technology that they can license or that undiscovered genius they could hire. But don't forget... they're also the ones employing the spouse while the other spouse works for nothing over a couple of years getting his or her business off the ground. They're the ones providing the health insurance, the retirement savings, the day care benefits for that one member of the family because the other member's startup could never afford those things.
Big companies create economies for small businesses. Comcast, one of the largest public companies in my hometown, built their headquarters in the center of the city. How many contractors, professional service firms, parts manufacturers and other small businesses were involved on that project? How many other small businesses provided indirect services to those working on the project? And how many small businesses, like maintenance and security firms, cleaning supply distributors, computer support and trash removal companies continue to provide services just to keep that one office building running?
Comcast makes other investments in the city, both philanthropic as well as strategic. Their executives go home to mansions on the Main Line and pay for small companies to provide them with landscaping, roofing and pizza delivery services. I'm not saying that Comcast is the greatest company in the world. I'm not thrilled with my $150-a-month cable bill (did my son just order The Dark Night On Demand again?). But I am saying that as other big companies like Comcast grow, the small businesses around them all benefit.
And, despite what the occupiers say, it's the big companies that truly provide the infrastructure for small businesses to succeed. It's the banking, the electricity, the transportation, the machinery, the chemicals and of course the capital to help us finance our growth. Take a look at your 401K and tell me where your money's invested. Those mutual funds aren't holding shares in my company (and hopefully not Facebook either!). We all have a stake in the S&P 500.
So let's celebrate National Small Business Week. Hooray for small business! We're the little guys fighting for survival and living the American dream. We're the ones who are courted by the politicians and romanticized in the press. We work hard and there's no shame in that. But let's not forget our friends in the ivory towers. Because without Big Business, we wouldn't have much to celebrate.
Another version of this post appears on The Philly Post.
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