The small-business sector also gives entrepreneurs an outlet for developing their ideas and perhaps for creating entirely new industries. Many of today’s successful high-tech firms – Microsoft, Cisco Systems, Yahoo!, and Dell – began as small businesses.
The growth of each such new businesses not only provides new goods and services but also fuels local economies. The high-tech companies in California’s Silicon Valley created a need for many support services. A company called iQuantic provides human resources consulting to Silicon Valley clients, and to be close at hand, it located in a former mattress factory in San Francisco. By locating in San Francisco’s run-down Mission District, iQuantic brought money into that neighbourhood.
Another contribution of small business is its ability to provide needed services to the larger corporate community. The movement toward corporate downsizing that began in the early 1990s created a demand for other businesses to perform activities previously handled by company employees. Outsourcing such activities as security, employee benefits management, maintenance, and logistics created opportunities that were often filled by employees of small businesses.
Small businesses might begin with a shift in consumer interests and preferences and then blossom into a whole new industry. A generation ago, no one would have called cheerleading an industry. But today’s cheerleaders aren’t just yell leaders, bouncing around on the sidelines and calling out encouragement to their favorite team. Instead, they are competitive athletic teams in their own right, often longing more practice time and travel miles than the football team. They get recruited by college scouts and compete for national championships. Various businesses have grown up around the new cheerleading trend – training camps, costume and uniform suppliers, publications. The magazine American Cheerleader was launched in 1994 and now claims 200,000 in circulation, with a readership of 1 million.
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