Did you know that nearly half of all US employees work for a small business? There are currently 32.5 million small businesses in the US and 61.2 million small business employees.
With the dominant presence that small businesses take in our lives, we can easily forget how long these cornerstones have acted as the core of our society. Come along with us as we wind our way through the past 100 years of small business in the United States.
Small Businesses in the 1920s
President Calvin Coolidge’s public claim that “the chief business of the American people is business” is the phrase that came to define the entrepreneurial attitude of the United States during the 1920s. Despite a recession in the early years of the decade, the latter half of this period saw rapid economic growth and the advancement of the newly created automobile and airline industries. The life of the small business in the 1920s was one of promise, as business owners saw the economy grow by a whopping 42%.
Doing Business in the 1930s
The infamous stock market crash of 1929 launched the United States into the Great Depression, which has long been considered the greatest economic downturn of all time. Small businesses suffered immensely, and as banks failed and people wiped out their savings simply attempting to pay their loans, thousands of small business owners were forced to close their doors for good. By 1933, unemployment was at “about 25 percent — or about 13 million persons.”
What Was Small Business Like in the 1940s?
While the 1930s may have been the downfall of small businesses in the United States, the 1940s brought their revival. With World War II came an industry boom that led to a flood of new businesses. In fact, “The Department of Commerce estimated in June 1943, that there were about 2,750,000 small business establishments in the United States, comprising some 93 percent of the total number of establishments.” Many now-global brands got their start in the 40s, including the American Broadcasting Company (ABC), Coach, and McDonald’s. It may seem impossible to imagine these entities as small businesses based on their size today, but everyone starts somewhere!
How Was Business in the 1950s?
The midpoint of the 20th century saw small businesses flourish under continued economic growth and additional support from agencies like the Small Business Administration (SBA). Founded in 1953, the SBA was created to “aid, counsel, assist and protect the interests of small business concerns, preserve free competitive enterprise and maintain and strengthen the overall economy of our nation.” Small business loans, specialized grants, procurement and management programs, and more from the SBA have allowed hundreds of thousands of small business owners to grow their companies and provide stable employment for their employees.
Small Businesses in the 1960s
The 1960s experienced a huge stock market boom that, unlike the 1920s several decades earlier, was not followed by major financial depression. There were a few stock market declines capping each end of the decade, however, on the whole, small businesses saw continued success in the 60s. The latter half of the 1960s also saw the start of The Great Inflation.
Moving into the 1970s Businesses
While the preceding few decades showed economic progress and a clear path forward for the average small business owner, the 1970s suffered from a severe case of “stagflation,” a term coined to describe the combination of high inflation and slow economic growth that plagued this era of market history. High unemployment rates were also a key component of the 70s, as this dip forced small business owners to scale back staff or face closing down entirely.
What About Business in the Infamous 1980s?
The impact stagflation had on the state of small business in the United States during the 70s certainly carried into the early 80s. By 1982, the national unemployment had reached its peak of 10.8% and inflation rates were similarly higher than they had been in decades. The remainder of the 1980s saw success and failure come in waves, as recessions alternated with periods of steady, albeit slow, economic growth.
Back to the 1990s
Compared to the 70s and 80s, the 90s were a bright time for small businesses. The late 90s were especially profitable for new entrepreneurs, as the web startup era was just beginning. Brands like Amazon, eBay, and Match.com are still around today, while 90s startups like AltaVista, AskJeeves, and Netscape provided ample employment in their day but have faded out over time. This tech boom was hugely beneficial to small businesses as the market exited the 20th century on a positive note. According to this report from the Clinton-Gore administration, “small business bankruptcies decreased by 17.9 percent between 1998 and 1999, to the lowest level in over 18 years.”
The Small Business World in the 2000s
The first decade of the 21st century began with the bursting of the dot-com bubble. Also known as the “dot-com boom” or the “tech bubble,” this phenomenon was “the unprecedented rise in equity valuations of internet-based tech companies during the bull market of the late 1990s. The dot-com bubble burst bankrupted a number of eagerly founded 90s tech startups and caused significant losses for those who survived. Following the burst, small business owners in the 2000s faced additional obstacles like the 2002 recession and the 2008 housing crisis with little forward momentum in between to balance out these hardships.
Our Most Recent Decade of the 2010s
Following the great recession of the previous decade, the 2010s went through one of the lowest rates of new business formation in recent history. The 2010s were extremely tough on small businesses, as banks became far more hesitant to give out loans post-2008. While the 90s saw an influx of new businesses being created, 2010-2019 saw a mere trickle of new business creation.
Current Small Business Trends in the 2020s
The onset of the COVID-19 pandemic in 2020 has necessitated a pivot for small businesses. For those who have been able to shift to a far more remote system for conducting business, sustaining and even growing their small business has been possible. Unfortunately, businesses that have not been able to make the transition to online operations have been hit incredibly hard.
Luckily for us, the decade is far from over!
VoiceNation, the best answering service for small businesses, is here to help your business thrive in this new market. Our goal is to assist companies with their business continuity and disaster recovery plans so that an unexpected emergency doesn’t have to mean a small business is lost forever. With highly trained virtual receptionists for small businesses and live chat services tailored to support your unique needs, VoiceNation can give your online small business the boost it needs to thrive in this competitive market. Try us out today — you’ll be glad you did!