Stay Informed!

By Sean Luechtefeld on 05/16/2011 @ 03:15 PM

Tags: Entrepreneurship

Today marks the beginning of National Small Business Week. To highlight the importance of entrepreneurship as an asset-building strategy, we’ll be discussing and debunking one myth about small businesses and self-employment each day this week. Check back daily to learn more about how small businesses create financial sustainability for millions of Americans across the country.

Myth #1: Startup businesses make an insignificant contribution to job creation

A common misconception is that new, or “startup,” businesses don’t create many jobs. In fact, startup businesses create millions of jobs every year and are vital to economic growth. Many people pursue entrepreneurship as an alternative to traditional wage-earning jobs, especially when employment opportunities are limited, as in a recession.

According to recent research by the Kauffman Foundation, three million jobs are created annually by startups, without which there would have been no net job creation. Tim Kane of The Kauffman Foundation notes that “startups [less than a year old] aren’t everything when it comes to job growth; they’re the only thing.”

Other research finds that startups are responsible for one-third of annual job creation, a number that far exceeds traditional conceptions of just what small business startups are capable of. Even businesses that don’t have many employees still create jobs for the entrepreneurs who create the vision for the business in the first place.

Check back tomorrow as we discuss how small businesses are more resilient to financial recession, and be sure to use the comments section below to share your thoughts on entrepreneurship.

National Small Business Week, May 16-20, 2011, celebrates the contributions of small businesses to the economic well-being of America. CFED would like to thank our sponsor, Sam’s Club Giving Program, for its commitment to help start and grow small businesses and for its support of the Self Employment Tax Initiative. To find out more about National Small Business Week, click here. To find out more about how Sam’s Club is helping small businesses, click here.

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