- President's Message | April 13, 2017
Small Business and the Entrepreneur
According to the Small Business Administration (SBA), 99.7 percent of all U.S. firms are small businesses. Depending on the industry, you could have 500, 1,000, or even 1,500 employees and still be considered a small business. However, there are some that are capped by their average annual receipts, and many are categorized by the industry. In the world of special trades contractors (where we electricians prevail), the cap of annual sales falls around $11.5 million. If you think about it in terms of our association, it is where the majority of us fall. Some of the latest figures show that about 73% of small businesses are sole proprietors and 52% are home-based businesses. An interesting piece of trivia is that Instagram only had 13 employees and was bought by Facebook for a billion dollars. So never doubt that a small group of thoughtful, committed people can change the world. In fact, it is the only thing that ever has.
Michael Gerber wrote The E-Myth (The Entrepreneurial Myth), which talks about things that inspire people to start their own businesses. Our industry is no exception. We start out as electricians and work until we become masters of our craft. At this point, some of us look to move up in our companies, while others feel they want to pursue their own business. The scary part is that in the first five years 80% of those companies will fail, and 80% of those remaining will also fail in the following five years. Wow, those are some pretty tough odds to go up against! The good news is that people keep trying and succeeding, giving the others a place to work and make a living.
A few lessons he shares have to do with knowing the other aspects of being in business that a craftsman may not be thinking about. As an electrician, you need the tools, materials, and blueprints to do your part. As a business owner, you have to have someone selling the work, doing the work, and invoicing the work. That’s just a couple of the hats you must be ready to wear. You must quickly become familiar with accounting, human resources, health care, labor law, and the wonderful world of taxes, just to name a few. All of a sudden, the electrician starts feeling overwhelmed and may decide working for someone else was less daunting. Regardless which direction we head, we should always be ready to seek first to understand and then be understood. When we see an owner enjoying his new vehicle or a trip that he was able to take, we should remember who has been wearing all of those hats. I personally know a couple of friends that have put everything on the line – including their own home as collateral – to be able to make payroll. Now that is commitment! Any owner out there has my deepest respect for what they have taken on and endured. They shoulder a tremendous responsibility for the sake of others and should be thanked and commended.
The bottom line is that small business owners are the backbone of our economy. What a great reason to belong to an association like ours! It’s tough to make an impact on things like code changes, education, and legislation just speaking for yourself. Belonging to IEC allows us to have a bigger voice while still maintaining our independence. We are able to train over 10,000 apprentices, have a presence on all the code-making panels for the NEC, and be heard on Capitol Hill. We all have our own means and methods to strive for our successes, to preserve. It just makes sense to belong. So tell your friendly competitors that we understand why they are in business for themselves, and we also know it takes bigger numbers to make some things happen.