CFED’s focus on entrepreneurship—and particularly microbusinesses—is driven by its potential for generating economic empowerment, inclusion and growth at both macro- and micro-economic levels: small businesses play a critical role in both the growth and sustainability of the nation’s economy and individuals’ household financial security.
Entrepreneurs create jobs for themselves, and, in many cases, for others, while contributing to community- and nation-wide economic activity and resilience that drive overall macroeconomic performance. At the individual level, entrepreneurs are able to build their own household financial security both at present and in future generations by generating income that leads to improved stability, self-sufficiency, economic mobility and wealth. Though small business ownership is the second greatest source of household wealth after home equity in the United States, many business owners still remain financially vulnerable, struggling to make ends meet along the way or build wealth over time.
Why focus on microbusiness? Microbusinesses—businesses with five or fewer employees including the owner—represent the overwhelming majority of businesses, large and small, in the United States: microbusinesses account for approximately 92% of all businesses and 26 million jobs. We know that today, many businesses are staying very small and more vulnerable people are starting businesses. In the wake of the Great Recession, for instance, many business owners are left more vulnerable by poor economic conditions, uncertainty and credit constraints. Microbusiness ownership can be an especially significant source of income and wealth for demographic groups that are more likely to face additional economic challenges.
CFED’s current portfolio of entrepreneurship work focuses on informing, discovering and testing scalable product, program or policy strategies for addressing microbusiness owners’ greatest financial challenges.
- See our latest field scan on African-American entrepreneurs in the South. This field scan represents phase one of a CFED research-driven initiative to create solutions to help Black American entrepreneurs weather cash-flow difficulties. Stay tuned for more!
- We just completed our first-ever Listening and Learning Series: on Exploring Financial Capability and Access for Entrepreneurs. This series discussed salient topics like cash flow volatility, alternative small business lending and the racial wealth divide.
Questions? Contact us at email@example.com.