Small Businesses Are Crucial for Big Business and the Economy to Succeed

Small businesses play a vital role in the U.S. economy, employing nearly half the entire American workforce and bolstering many local communities.

Jeanette Mulvey, Editor-in-Chief of CO–, hosted a recent Small Business Update event to discuss how the Chamber works on behalf of small businesses daily and supports policies to help small businesses succeed.

The Importance of Small Businesses

During the event, Suzanne P. Clark, President and CEO of the U.S. Chamber of Commerce and a former small business owner, emphasized that small businesses are vital to the economy, bringing value to bigger businesses and their communities. But small business owners are often underappreciated.

"When you are in the throes of running your business and probably running a family and probably being a community leader, it's hard to step back and appreciate what you're really doing for society," Clark said.

"What you're doing for society [is providing important jobs]," Clark continued. "We know what a job means to a community. We know what it means to a family. We know what it means to health outcomes. We know what it means to environmental outcomes. So, every time that you're creating that job, you have that broader impact."

Secondly, she said small business owners are filling a hole in people's lives, providing a service that didn't exist or an improved product. Finally, she notes that the U.S.'s economic competitiveness and national security depend on creative and confident community leaders.

“If you look at everything, from who sponsors the little league team to who's there at the hospital, it's small businesses. It's the local pizza shop. It's the local florist,” Clark said. “The way that businesses and business leaders are woven into their communities is just such an important thing and so much more appreciated than you might realize.”

How the U.S. Chamber Advocates for Small Businesses

Clark was once a small business owner, operating a research business that helped explain policy and politics to institutional investors. Now, she uses her experiences at the Chamber to help other small businesses on the path to becoming successful.

The Chamber plays a crucial role in being the “offense” and “defense” in advocating for small businesses on tactical issues related to regulatory environments and keeping taxes low. “We ... pressure the government to do the things only it can do,” Clark explained. “Free trade is a great example. Ninety-seven percent of exporters are small businesses, and we want our small businesses to be able to reach other markets.”

The Chamber also works to open markets for small businesses and address worker shortages so small businesses can focus on growing, innovating, and solving problems.

Challenges Facing Small Businesses in 2023

Clark believes those on a new business venture are creative, problem solvers, and, most importantly, brave.

“The universal experience of a small business owner is that it's scary," Clark explained. "You're taking the risk yourself with your name, your brand, your finances. It's usually your personal capital that you're putting at risk and the opportunity cost of not working for a big company.”

The U.S. Chamber partners with MetLife on the quarterly Small Business Index. The most recent survey showed small business owners positive about the future while concerned about access to capital.

“Seventy-six percent of small businesses were worried about access to capital because of interest rates and because of banking regulations getting tighter,” Clark said. “This question about where would they find investment capital to grow was top of mind.”

Big and Small Businesses Can Coexist in Today’s Landscape

Clark also emphasized the importance of big and small businesses relying on one another to build a vibrant economy. 

“Small businesses being healthy is crucial to big businesses and vice versa,” Clark said. “I do think the ecosystem is under-reported and underappreciated. There are more things that we could do at the U.S. Chamber to emphasize that it's an ecosystem, but also get [big and small businesses] to help each other.”

In support of this, the U.S. Chamber launched the Prompt Pay Pledge where several big companies — from J.P. Morgan & Co. to Siemens — make payment terms shorter to help small businesses.

“[These big businesses] recognize that small business has faster cash flow needs, and [they’re] going to make [their] payment term shorter for small businesses to help them stay alive in a really complicated time,” Clark said.