Having covered entrepreneurs from a media perspective for 30 years, Rieva Lesonsky (@rieva), President and Founder of GrowBiz Media, knows small business.
When she served as Editorial Director at Entrepreneur Magazine, though, she began to see the connection between small businesses and corporations.
Particularly, how they can help one another.
Rieva explains how she came to recognize the synergistic needs of business owners and corporations:
“I spent a lot of time when I was at the magazine talking to corporations, explaining the small business market to them. So it became natural for me to recognize how synergistic the needs of business owners and corporations were, and how they can help one another.”
So Why the Rift Between Corporations and Startups?
Corporations often don’t “get” small businesses and startups. They tend to see startups as “somehow not serious, and that they’re cheap,” says Rieva. She continues:
“In fact, it’s at startup that many entrepreneurs do their research (they have more time) and pick the brands they’re going to use in their business. If those products and services work well for them, chances are they’re going to stick with them as they grow their businesses. They become too busy to research new products and services as they concentrate their time and energies on their businesses.”
Rieva says corporations benefit from working with small businesses, as they employ more than half of all American workers. And because small businesses are in constant states of acquisition, they need “stuff” from corporations.
Through her company, Rieva helps entrepreneurs start and grow businesses, and she also introduces business owners to the products and services available to help them grow smarter and faster.
Tasting Her Own Cooking
Rieva is now a small business owner herself: she founded GrowBiz Media, a content and consulting company specializing in covering small businesses and entrepreneurship. She also runs Small Biz Daily, a site dedicated to providing content to entrepreneurs. She recognizes that there are large differences between working for larger companies and running a small business:
“…the major difference is I have to be more reliant on myself and my friends to solve problems and conquer challenges. I don’t have an IT department, or an HR person. Small business owners have to be more creative problem-solvers.”
She acted as a judge for the 2012 Small Business Influencer Awards (and last year, she was honored as one of the top 100 Influencers). What she’s enjoyed most about the Awards is the not-so-obvious nominees:
“There’s a lot of support out there for small businesses, but not all business owners know about them. Hopefully those people and companies will emerge with a higher profile thru the judging process.”
Editor’s Note: This article is one of a series of interviews of key players in the Small Business Influencer Awards.
It’s also important to note that every big corporation has a humble beginning somewhere. Don’t forget where you came from.
Exactly, Robert! They all start out small!
Large corporations need small businesses to buy from them, but almost without exception small businesses do not need large corporations. As an example, the 18 largest banks, one of whom Rieva represents, Bank of America, were declared too big to fail in 2009. Today, those banks, including Rieva’s are all much bigger than they were in 2009.
When those banks were bailed out, they all turned around and deleted the credit lines of millions of small business owners, forcing hundreds of thousands out of business in days and crippling millions. They did it without even so much as a notice to those businesses. This action is at the heart of why we have not seen a full recovery. What part of small business needs this kind of big business help?
And in the same vein, Dodd-Frank was supposed to keep giant corporations like GM from ever needing another bailout. But all it has done is made it impossible for millions of small business owners to afford to comply. The giant corporations just throw another lawyer and another accountant at it and keep going. A direct result – Bank of America’s mortgage business has expended greatly as a result of Dodd-Frank, and yet small and independent mortgage businesses are becoming extinct because they can’t afford to comply.
Giant corporations desperately need the 28 million small business owners to buy from them (see Rieva’s list of clients on her website – all are large corporations that she is promoting to small business). But small businesses should do everything they can to buy from small banks and other small businesses.
There are 27+ million businesses with under 20 employees – let’s work hard to support each other instead of lining the coffers of Giant Corporation, Inc.
Thanks for your insight. While certainly we should support small business, I think that’s not only possible. Some corporations offer services that small biz doesn’t.
There is no question that some services are only available from Giant Corporation, Inc. Most air travel, almost all car manufacturing, etc.
But the overwhelming amount of products and services are available from small and local businesses, or at least privately owned large businesses (Enterprise Car Rental is a family business – support it instead of all the others that exist only to enrich their investors).
The Kauffman Foundation has found that 100% of all job creation is by startups in the first year of business http://bit.ly/Q5cv8R and 98% of all businesses never have more than 20 employees http://www.census.gov/econ/smallbus.html . In fact by the SBA’s definition of small business, 99.93% of businesses will never be anything but a small business – 28 million small and only 17,000 with more than 500 employees – a freakishly small percentage of all businesses.
If we want our economy to recover and grow, the focus should be on small businesses supporting the growth of small businesses. Whenever the option presents itself, buy small and buy local, such as a small local bank vs. a giant national bank.