Small Business and the Effects on the Macroeconomy
The small business sector has only recently become an interest when discussing the macroeconomy. New studies are finding that small businesses may have a greater importance in the economy than previously thought. This paper first takes a look at small business from the point of view of the owner/manager of one business. Then the paper moves to the larger picture to see if there is a real influence of the small business sector on the macroeconomy. The first half on this project was the starting and running of a small business on the campus of Kalamazoo College. The type of small business chosen was a small coffee shop. The coffee shop would be started by, ran by and employ only Kalamazoo College students The paper takes each of the steps and discusses briefly what was done. The steps include writing a business proposal, writing financial reports, hiring employees, advertising, general problems encounter and other such topics. The point of this section is to get the reader acquainted with how to run a small business and to understand what it is like to be the owner/manager. The second half of the project is research on the impact that the small business sector has on the economy. As stated above, this is only a recent idea that is only in the beginning stages of being studied. However, from the information available it seems that there is a substantial influence on the macroeconomy by small business. For this research project the topic of influence on the macroeconomy was broken down to the small business influence on employment and innovation. The influence on employment was very easily seen through statistical data found in various studies as well as data from the United States Small Business Administration. Innovation is a little harder to measure. However there is clear evidence that the small business sector does have a place in the realm of innovation and is helped by the United States Small Business Administration.