Small Business Strategies for Company Profitability and Sustainability part 1

Walden University ScholarWorks Walden Dissertations and Doctoral Studies Walden Dissertations and Doctoral Studies Collection 2015 Small Business Strategies for Company Profitability and Sustainability Denise Leigh Gandy Walden University Follow this and additional works at: https://scholarworks.waldenu.edu/dissertations Part of the Business Commons This Dissertation is brought to you for free and open access by the Walden Dissertations and Doctoral Studies Collection at ScholarWorks. It has been accepted for inclusion in Walden Dissertations and Doctoral Studies by an authorized administrator of ScholarWorks. For more information, please contact [email protected]..

Walden University College of Management and Technology This is to certify that the doctoral study by Denise Gandy has been found to be complete and satisfactory in all respects, and that any and all revisions required by the review committee have been made. Review Committee Dr. Patricia Fusch, Committee Chairperson, Doctor of Business Administration Faculty Dr. Peter Anthony, Committee Member, Doctor of Business Administration Faculty Dr. Denise Land, University Reviewer, Doctor of Business Administration Faculty Chief Academic Officer Eric Riedel, Ph.D. Walden University 2015.

Abstract Small Business Strategies for Company Profitability and Sustainability by Denise L. Gandy MBA, Northcentral University, 2008 BS, Radford University, 2001 Doctoral Study Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Business Administration Walden University April 2015.

Abstract Small businesses are critical to the health of the United States economy as they account for approximately 50% of all jobs and 99% of all firms. The purpose for this descriptive multiunit case study was to explore what strategies small business owners used to achieve profitability by the end of the first 5 years of opening their business. The sample comprised 4 small business owners who have been profitable by Year 5 of being in business in Denver, Colorado. The conceptual framework for this study was built upon the general systems theory. The data were collected through semistructured interviews and company documents. Transcript review and member checking were completed to strengthen credibility and trustworthiness. Based on the methodological triangulation of the data sources collected, 3 emergent themes were identified after completing the 5 stages of data analysis: seasonality of the business, passion and dedication of the small business owner, and hiring the right employees. The findings from this study may contribute to social change by providing insights and strategies for small business owners in preparing and sustaining profitability. The data from this study may contribute to the prosperity of the small business owners’ employees, their families, communities, and the local economy..

Small Business Strategies for Company Profitability and Sustainability by Denise L. Gandy MBA, Northcentral University, 2008 BS, Radford University, 2001 Doctoral Study Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Business Administration Walden University April 2015.

Dedication This is dedicated to soul mate, Chase. Thank you for all of your patience, love, support, and encouragement throughout my doctoral journey. I could not have done it without you..

Acknowledgments Thank you to my Chair, Dr. Patricia Fusch, for supporting me with extremely fast turnarounds and excellent mentor guidance. I would also like to thank my committee members, Dr. Peter Anthony and Dr. Denise Land for their valued feedback. Thank you to my family, the Miller family, and my boyfriend for their unwavering support. Finally, thank you Dr. Freda Turner for encouraging and inspiring me, I would not be where I am today without you..

i Table of Contents List of Tables ..................................................................................................................... iv Section 1: Foundation of the Study ......................................................................................1 Background of the Problem ...........................................................................................1 Problem Statement .........................................................................................................1 Purpose Statement ..........................................................................................................2 Nature of the Study ........................................................................................................2 Research Question .........................................................................................................4 Interview Questions .......................................................................................................4 Conceptual Framework ..................................................................................................4 Operational Definitions ..................................................................................................5 Assumptions, Limitations, and Delimitations ................................................................6 Assumptions ............................................................................................................ 6 Limitations .............................................................................................................. 6 Delimitations ........................................................................................................... 7 Significance of the Study ...............................................................................................7 Contribution to Business Practice ........................................................................... 7 Implications for Positive Social Change ................................................................. 8 A Review of the Professional and Academic Literature ................................................8 Systems Theory ..................................................................................................... 10 Small Business ...................................................................................................... 11 Types and Sizes of Small Businesses ................................................................... 16.

ii Small Businesses Effect on the Economy ............................................................. 18 Perceived Small Business Failure Factors ............................................................ 20 Perceived Small Business Success Strategies ....................................................... 25 Entrepreneurship ................................................................................................... 32 Transition .....................................................................................................................37 Section 2: The Project ........................................................................................................39 Purpose Statement ........................................................................................................39 Role of the Researcher .................................................................................................39 Participants ...................................................................................................................42 Research Method .........................................................................................................43 Research Design ...........................................................................................................44 Population and Sampling .............................................................................................46 Ethical Research ...........................................................................................................47 Data Collection Instruments ........................................................................................48 Data Collection Technique ..........................................................................................50 Data Organization Technique ......................................................................................52 Data Analysis ...............................................................................................................52 Reliability and Validity ................................................................................................55 Transition and Summary ..............................................................................................57 Section 3: Application to Professional Practice and Implications for Change ..................59 Introduction ..................................................................................................................59 Presentation of the Findings .........................................................................................60.

iii Participants and their Small Businesses ................................................................ 61 Participants Educational and Professional Backgrounds ...................................... 62 Emergent Theme 1: Seasonality ........................................................................... 65 Emergent Theme 2: Passion and Dedication ........................................................ 72 Emergent Theme 3: Hiring the Right Employees ................................................. 76 Applications to Professional Practice ..........................................................................80 Implications for Social Change ....................................................................................81 Recommendations for Action ......................................................................................82 Recommendations for Further Research ......................................................................82 Reflections ...................................................................................................................83 Summary and Study Conclusions ................................................................................84 Appendix A: Participant Consent Form ...........................................................................113 Appendix B: Permission to Utilize Interview Questions .................................................115 Appendix C: Interview Protocol and Questions ..............................................................118.

iv List of Tables Table 1. Educational Background of the Participants ....................................................... 63 Table 2. Professional Background of the Participants ...................................................... 64 Table 3. Did their Background Prepare Them for Ownership of a Small Business? ....... 65 Table 4. Strategies used for Profitability .......................................................................... 67 Table 5. Frequency of Seasons Mentioned ....................................................................... 69 Table 6. Highest and Least Profitable Seasons According to Cash Flow Documents ..... 70 Table 7. Strategies in Sustaining Beyond 5 Years ............................................................ 74 Table 8. Frequency of Passion and Dedication Mentioned .............................................. 75 Table 9. Participants’ Final Thoughts on Being Successful ............................................. 77 Table 10. Frequency of Hiring the Right Employees Mentioned ..................................... 78.

1 Section 1: Foundation of the Study Small businesses are critical to the health of the United States economy as they account for approximately 50% of all jobs and 99% of all firms (Labedz & Berry, 2011). Monahan, Shah, and Mattare (2011) asserted two-thirds of new firms survive at least 2 years, and about one half survive 4 years. Chow and Dunkelberg (2011) explained small business leaders produce half of all private gross domestic product (GDP) and employ half of the private workforce. The purpose for this qualitative multiunit case study was to explore what strategies small business owners used to be profitable in business by the end of the first 5 years of opening their business in Denver, Colorado. Background of the Problem In 2011, 28.2 million small business leaders employed 99% of all employers in the United States (Small Business Administration, 2014). Researchers at the Small Business Administration (SBA) defined a small business as a firm with fewer than 500 employees (SBA, 2014). Small business leaders drive the economy and sustain the technological lead in the global marketplace resulting in one-third of all new patents issued (Cronin-Gilmore, 2012). Small businesses are vital to the fiscal condition of the country, and equally important is the role leadership plays in the health of the local community (Eveleth, Chung, Eveleth, & O’Neill, 2011). Even with the high failure rate, small businesses were often neglected in terms of research (Samujh, 2011). Problem Statement Small businesses account for 39% of the United States' gross national product and create two out of every three new jobs in the economy (Yallaprageda & Bhuiyan, 2011)..

2 However, only around one-third of new small businesses survive 10 or more years and around half survive 5 years or more (SBA, 2014). Each year, the number of new small business firms that open is nearly equal to the number of closed small business due to failure (Yallapragada & Bhuiyan, 2011). The general business problem is that people embark on small business initiatives without adequate preparation. The specific business problem is that some small business owners lack strategies to achieve profitability by the end of the first 5 years of opening their business. Purpose Statement The purpose for this qualitative descriptive multiunit case study was to explore what strategies small business owners used to achieve profitability by the end of the first 5 years of opening their business. The population comprised small business owners located in Denver, Colorado who have been profitable by Year 5 of being in business. For this research study, business success refers to a business with profitability and longevity of five or more years in business (SBA, 2014). Four small business owners participated in semistructured interviews to explore strategies in becoming profitable by the end of the first 5 years of being in business. The data from this study might affect social change by contributing to small business owners preparing and sustaining profitability and contributing to the prosperity of their employees, their families, communities, and the local economy. Nature of the Study There are three types of research methods, qualitative, quantitative, and mixed- method (Clark, 2010). Reducing thoughts, emotions, and behaviors to words results in.

3 qualitative data; reducing them to numbers results in quantitative data (Bernard, 2012). Researchers use qualitative research methods to explore phenomenon, relying on text and image data and open-ended questions (Suri, 2011). Research methods using quantitative methods rely on numeric data using instrument-based questions (Suri, 2011). A mixed- method or hybrid approach includes both qualitative and quantitative methods combined in a single study (Small, 2011). There were no variables to examine or compare; so, quantitative or mixed method approaches were not appropriate. A qualitative methodology was most appropriate for this study. In qualitative research studies, the following are the main designs (a) ethnography, (b) grounded theory, (c) phenomenology, and (d) case study (Petty, Thomas, & Stew, 2012). Researchers utilize ethnography to explore the beliefs, feelings, and meanings of relationships among people as they interact within their culture (Fields & Kafai, 2009). Not selected was an ethnographic study design because I was not studying a culture or community. I was not researching individual world-views or lived experiences on identifiable issues to develop common themes as discussed by Marshall and Rossman (2011); therefore, I did not select a grounded theory or phenomenological design. Case study designs offer an advantage in studies for which how or why questions address a contemporary set of events, over which the investigator has little or no control (Amerson, 2011; Yin, 2013). Case study research is a viable means of researching emerging ideas from multiple sources (Trkman, 2010). Yin (2012) noted descriptive case studies illustrate events and their specific context. I selected a descriptive qualitative case study design to gain an understanding of what strategies small business owners used to.

4 achieve profitability by the end of the first 5 years of opening their business. Research Question The overarching research question for this study was: What strategies do small business owners use to achieve profitability by the end of the first 5 years of opening their business? Interview Questions The following interview questions were written by Schorr (2008) and modified with her permission (Appendix B) for this qualitative descriptive case study. Question 1 was an initial probe question, Questions 2-4 were concept questions, and Question 5 was a wrap-up question. 1. Tell me about your professional and educational background and do you believe your professional and educational background prepared you for ownership of a small business? 2. What strategies have you used to be profitable? 3. What are the key strategies you have used to sustain your business past the first 5 years? 4. What do you believe the profitability of your business has brought to you, your employees, your family, and the community? 5. What else would you like to share about your experiences of becoming a successful small business owner? Conceptual Framework In the 1930s, biologist von Bertalanffy coined the term systems theory. Von.

5 Bertalanffy (1972) stressed the importance of the external environment on a system or organization, and that organizational leaders respond to, and are influenced by, both specific and general environmental influences. Fox (2011) described the application of systems theory as systems analysis. The conceptual framework for this study is built upon general systems theory. The conceptual framework creates a lens through which to understand the context of the research (Galea, 2012). Wolf et al. (2010) stated qualitative methods are appropriate for system theoretic research because qualitative methods enable researchers to observe the distinctions that are operative in social systems. There are unpredictable challenges that small business owners may encounter; systems theory aligned well because the owners have to integrate many different processes and components in starting up and sustaining their businesses. Operational Definitions Business success: For this research study, business success refers to a business with profitability and longevity of five or more years in business (SBA, 2014). Entrepreneurship: Entrepreneurship is the practice of starting new businesses or developing new products or services (Parilla, 2013). SBA: The United States (U.S.) Small Business Administration is an independent agency of the federal government that assists, counsels, aids, and protects the interests of small businesses (SBA, 2014). Small business: A small business is a firm with fewer than 500 employees (SBA, 2014)..

6 Assumptions, Limitations, and Delimitations Assumptions and limitations are factors that are out of my control as the researcher. Assumptions are facts that I assume are true, but cannot prove. Limitations are potential weaknesses of my study. Delimitations are in my control as the researcher and provide bounds for my study. Assumptions Assumptions are facts that I assume to be true, but I cannot verifiy. In order to avoid misrepresentation, researchers must identify and address potential assumptions (Fisher & Stenner, 2011). I assumed that at a sufficient number of small business owners in Denver, Colorado that have been profitable by the end of year 5 would be willing to be participants to reach data saturation. It was also assumed that the participants would be truthful, and not biased with their answers. There was another assumption that the semistructured interview questions and company documents would lead to enough data to fully answer the central research question of the study. I assumed that this study would effect professional and social change by contributing to the prosperity of the small business owner, their employees, their families, communities, and the local economy. Limitations Mitchell and Jolley (2010) explained that limitations include potential weaknesses that could affect the study. In this qualitative descriptive case study, the primary limitation was the sample size of participants. The research study was limited due to time constraints. Another limitation was the geographical location of only Denver, Colorado. The final limitation was including only small business owners that have been profitable.

7 by the end of their first 5 years of opening their business. Delimitations Delimitations are restrictions or boundaries that researchers impose to focus the scope of the study (Mitchell & Jolley, 2010). A delimitation of the study included the geographical location, which included only small business owners in the Denver, Colorado area. The study only included research on small business owners who have been operating for 5 or more years. Researchers at the Small Business Administration (SBA) defined a small business as a firm with fewer than 500 employees (SBA, 2014). Only including businesses with fewer than 500 employees and not medium or large companies was a delimitation of the study. Significance of the Study This study was significant in that I explored strategies that contribute to achieving profitability of small business owners by the end of their first 5 years of being in business in Denver, Colorado. The strategies that contribute to small business owners’ achieving profitability in Denver, Colorado were not known. The high failure rate of small business owners is an issue. The economic health and well-being of Colorado is driven by small businesses because they make up such a huge part of the state’s economy (SBA, 2014). In Colorado, small businesses represent 97.6% of all employers and employ 49.2% of the private-sector workforce, with 556,586 small businesses in 2011 (SBA, 2014). Contribution to Business Practice During 2011, Colorado small business owners employed 962,232 workers, up from 961,394 in 2010 (SBA, 2014). The largest share came from firms with fewer than.

8 100 employees (SBA, 2014). The implications for business practice included the potential to aid small business owners in achieving profitability by the end of the first 5 years of operation. Implications for Positive Social Change Implications for positive social change included the potential to provide newly useful insights for small business owners to prepare them for start-ups, profitability, and sustainability. Lahm, Stowe, Carton, and Buck (2011) determined small business owners enhance economic growth by generating between 60% and 80% of new jobs in the United States. Informed small business owners will be able to manage the complexities of start-ups, leading to sustainability, and in turn, contributing to the prosperity of their employees, their families, health of the community, and the local economy. Labedz and Berry (2011) stated decisions made in early stages may affect the business in its later growth. Small businesses are important for job creation, innovation, competiveness, and economic growth in the United States (Shukla & Shukla, 2014). Spilling (2011) identified small businesses as the motor of economic development for catalyzing social change. A Review of the Professional and Academic Literature The purpose for this qualitative multiunit case study was to explore what strategies small business owners used to achieve profitability by the end of the first 5 years of opening their business. In 2014, U.S. small businesses created 63% of the new jobs and employed 37% of all workers from technological fields (SBA, 2014). The purpose for this professional and academic literature review is to summarize, compare, and contrast various sources that relate to the research topic..

9 Literature reviews (a) add support to the topic, (b) identify the literature that will make a contribution to the research, (c) build an understanding of the conceptual framework and literature, (d) establish a bibliography of sources, and (e) analyze results (Rowley, 2012). A literature review helps researchers and scholars avoid unintentional duplication of existing research while adding important contributions to the existing literature (Rhoades, 2011). The literature review summarizes the subject field in support of identifying future research questions (Rowley, 2012). The purpose for this qualitative descriptive multiunit case study was to explore what strategies small business owners used to achieve profitability by the end of the first 5 years of opening their business in Denver, Colorado. For this study, sources were mainly obtained from searching business and management databases within the Walden University Online Library. The literature review contains 60 peer-reviewed articles, and 88% of the articles published after 2011. The database I used most frequently to gather peer-reviewed full-text articles was from the ABI/INORM Complete database for this research study. The following databases were also utilized (a) ScienceDirect, (b) Business Source Complete, (c) ProQuest, (d) Emerald Management Journal, (e) Government databases, including the SBA and U.S. Census Bureau, (f) Google Scholar, and (g) SAGE Premier. Key search words used in these databases included combinations of small business owner, entrepreneurship, small business success, small business failure, small and medium sized enterprises (SME), small business financing, small business strategy, small business innovation, small business marketing, history of small businesses, types of.

10 small businesses, systems theory, small business and the economy, microbusiness, Colorado small business, and small business networking. The review of professional and academic literature section of this research study contains seven main subject categories that include: systems theory, small business, types and sizes of small businesses, small businesses effect on the economy, perceived small business failure factors, perceived small business success strategies, and entrepreneurship. The small business section contains the sub-sections, small business owner and small businesses in the state of Colorado. Systems Theory Von Bertalanffy (1972) created the term general systems theory in the 1930s and the concept behind this theory suggested that all parts of an entity contribute to a functioning system. In the 1930s, general systems theory started a new realm of science (von Bertalanffy, 1972). Systems theory has a wide applicability in many different disciplines (von Bertalanffy, 1972). Systems theory is the culmination of components when linked together are equal to or greater than the sum of their parts, and serves well, when there is an understanding of the system as a whole, rather than the behavior of individual components (Kaine & Crown, 2011). General systems theory consists of the scientific explorations of wholes and wholeness as stated by von Bertalanffy. Systems thinking is used to examine relationships between different parts of a system, the concept of system thinking derives originally from a computer simulation model for handling management problems (Mehrjerdi, 2011). Systems thinking is a conceptual framework for problem solving in its entirety. This form of problem solving.

11 includes pattern finding to increase understanding of, and responsiveness to, the problem (Mehrjerdi, 2011). The general system theory was selected to ground the conceptual framework of this study in order to focus on strategies of profitable small business owners. Small business owners align with the general systems theory by offering an individual product or service to support the community as a whole as discussed by von Bertalanffy (1972). Drack and Schwarz (2010) explained general systems theory requires numerous factors working together as a whole to ensure success. Systems theory aligned closely in exploring all of the elements that come together for small business owners to achieve profitability by the end of the first 5 years of their business opening. Small Business Researchers at the SBA defined a small business as a firm with less than 500 employees (SBA, 2014). Other descriptions of firm size categories include very large (more than 500 employees), large (200 to 500 employees), medium (50 to 200), small (fewer than 50 employees), and micro (fewer than 10 employees) according to Jones and Rowley (2009). Small and medium business enterprises often meet the SBA definition of small business and include large organizations that do not meet the definition of a large corporation (Barth, Lin, & Yost, 2011). Small businesses comprise a growing large proportion of companies in the United States' economy (Yallapragada & Bhuiyan, 2011). Yallapragada and Bhuiyan found small businesses account for 39% of the United States' gross national product and create two out of every three new jobs in the economy. Small businesses have higher employment levels than large businesses for workers over the age 65, disabled, with less.

12 education, and from rural areas (Yallapragada & Bhuiyan, 2011). In the United States, small businesses are the source of most job creations (SBA, 2014). Furthermore, they have accounted for approximately two-thirds of new net private sector jobs over the past 2 decades (Chow & Dunkelberg, 2011). The small business sector is the fundamental engine of innovation, jobs, and growth (Gale & Brown, 2013). Researchers at the SBA discovered only around half of all new small businesses survive 5 years or more and around one-third survive 10 years or more (SBA, 2014). Considering there is such a high percentage of small business failure, it is important to examine strategies contributing to the profitability by the end of the first 5 years of being in business. For this research study, business success refers to a business with profitability and longevity of 5 or more years in business (SBA, 2014). In 2011, there were 6,162,058 small business establishments in the United States (U.S. Census Bureau, 2011). Baptista and Preto (2011) stressed that each time a small business venture fails there is a loss of jobs, reduced tax revenue for local and federal governments, and disappointment for stakeholders. Plehn-Dujowich (2010) established that an alarming number of small businesses fail within the first 5 years of being in business, and the high failure rate has the potential to affect unemployment and the national economy. Shukla and Shukla (2014) expressed the importance of small businesses to innovation, job creation, economic growth, and United States competitiveness. Teng, Bhatia, and Anwar (2011) and Judd and McNeil (2012) acknowledged small firms as key drivers of innovation in the United States. Innovation is the process of creating value.

13 through the implementation of new ideas (Levy, 2012). Conversely, Foreman (2011) noted innovation is the ability to discover a possibility through differentiation. An organization can only survive when it innovates and improves (Bello & Ivanov, 2014; Ivanov, 2013). In the beginning, innovation tends to increase survival chances for a small business, however, chances of failure climax at the growth stage (Peltier & Naidu, 2012). Small business owners are drivers of innovation that lead to more socially, economically, and environmentally sustainable outcomes (Gagnon, Michael, Elser, & Gyory, 2013). The demand for social responsibility for business leaders is growing and they should incorporate social responsibility into their organizations (Claydon, 2011). Johnson (2012) pointed out because of climate changes and the financial crisis, the concept of sustainability is receiving more attention. Small business owner. Small business owners need to understand the necessity of continuing education in their plans for success (Atamian & VanZante, 2010). Atamian and VanZante (2011) recommended that small business owners continue their education through acquiring knowledge and skills from any resources available, such as SBA, SCORE, Small Business Development Center, trade shows, and degree programs to increase their success chances (Atamian & VanZante, 2011). All of these resources and organizations are in place to help small businesses start-up and sustain; the SBA is a federal agency whose main purpose is to help Americans start, build, and grow businesses according to its mission statement (SBA, 2014). The SBA was founded in 1953 by the federal government to provide low-interest loans to small business borrowers that would not otherwise have access to credit (Yallapragada & Bhuiyan, 2011)..

14 Fahed-Sreih and Morin-Delerm (2012) revealed that the success of owners of small businesses was his/her commitment to attaining the standard of excellence. Stafford, Bhargava, Danes, Haynes, and Brewton (2010) determined the duration of survival is longer when small business owners see their business as a way of life and the more experience the owner has, the longer the duration of the business’s survival will be (Stafford et al., 2010). Farrington (2012) argued that many small business owners are unsatisfied with being self-employed because it is not suitable for their particular personality type. When self-employment is not suitable for their personality type, it leads to low levels of job satisfaction and commitment, which eventually often leads to their failure (Farrington, 2012). The three top personality traits found to be most suited for self-employment include (a) conscientiousness, (b) openness to experience, and (c) agreeability (Farrington, 2012). Hunter (2011) found that small business owners need to maintain the direction of the business, stay involved, and have a passion to see the business succeed. Palmer and Griswold (2011) sought to discover why small business owners choose innovation as a strategy of sustainability. Palmer and Griswold conducted a qualitative study with interviews of seven owners and managers of independently owned and operated restaurants. Palmer and Griswold also studied competition within a market as it relates to sustainability. Palmer and Griswold showed that small business owners adopt many innovations in response to moves by competitors. Conversely, Fadahunsi (2012) noted small business owners that adopt greater levels of technological sophistication grow more quickly than similar firms that do not..

15 Seleim and Khalil (2011) stressed that knowledge management would enhance competitive advantages resulting in improved resource alignment and small businesses viability. Knowledge management (KM) is the systematic process of capturing, coding, and handling information for improved interaction and replication within a business (Daniel, 2011). Atherton (2012) conducted a qualitative study aimed to explore the dynamics of new venture financing on 20 business start-ups. Atherton noted the overall ability of the founder in terms of their financial literacy, success in negotiating to acquire funding, expertise in planning business start-up, and to launch effectively are the most important factors contributing to the success. A small business owner operates a business with the personal goal of providing income for their family while an entrepreneur has the goal of growth and achieving profit (Ionitã, 2012). Similarly, Hurst, Pugsley, Haltiwanger, and Looney (2011) discussed most small business owners have little desire to grow large or to innovate, unlike entrepreneurs. Small business owners intend to provide an existing service to an existing market, while entrepreneurs intend to bring a new idea to market or to enter an unserved market (Hurst et al., 2011). Small business owners’ main reason for starting a business is usually for non-pecuniary benefits, such as wanting to be their own boss and wanting a flexible schedule and work hours (Hurst et al., 2011). Small businesses in the state of Colorado. Small businesses significantly affect Colorado’s economy (SBA, 2014). Small business leaders in Colorado employ 49.2% or 962,232 of the state’s private workforce (SBA, 2014). They represent 97.6% of all employers and almost all firms with employees are small (SBA, 2014). In 2011, small.

16 business leaders in Colorado created 19,780 net new jobs, with the smallest firm category of one to four employees having the biggest gain (2014). There were 556,586 small businesses in Colorado in 2011, up from the 549,229 in 2010 (2014). TEGH-Nef is a database that tracks Small Business Technology Transfer (STTR) awards and Small Business Innovation Research (SBIR) awards (Bruns, 2013). TEGH- Nef revealed that for the years 2010-2013, Colorado was sixth in the nation in combined SBIR and STTR awards, with 312 totaling more than $102 million (Bruns, 2013). Bruns reported on business opportunities for small and medium-sized enterprises (SME) in the Rocky Mountain States of the United States. Bruns added that companies come to Colorado because the location fits their business model. The state of Colorado has an Enterprise Zone tax credit program; the program offers an assortment of credits and exemptions to businesses that create jobs in designated zones, including economically distressed rural areas (Bruns, 2013). The state of Colorado also launched a task force in 2012 to identify reforms for review and adoption by the 2013 legislature, in an effort to enhance the program (Bruns, 2013). In 2011, small businesses employed 962,232 workers in the State of Colorado (U.S. Census Bureau, 2011). Types and Sizes of Small Businesses A small business that has less than 20 employees defines a microbusiness (Samujh, 2011). There are over 20 million microbusinesses operating in the U.S. and microbusiness jobs represent 16.6% of all private (nonfarm) employment in the United States (Bauer, 2011). Most countries’ businesses are microbusinesses; around 95% to.