The state of small business has lately been quite the coffee talk topic at The Daily Grind in Quarryville.
That’s thanks to the recent openings of two Giant stores in nearby spots that once housed family-owned grocers.
“People are worried that bigger corporations are kind of taking over,” says Daily Grind owner Andrew Morgan. “But at the same time small businesses are starting up in record numbers. So when you look at the grand, overall scheme of things? I think small business is alive and well.”
The roughly 13 jobs that Morgan’s 5-year-old establishment requires to keep running are among 56,400 Lancaster County jobs provided early this year by businesses with fewer than 20 employees, according to preliminary data from Pennsylvania’s Center for Workforce Information & Analysis.
That’s 25 percent of total jobs in the county. Another 19 percent were with businesses ranging from 20 to 49 employees.
Those are attractive numbers to Adam Ozimek, chief economist at Upwork in Lancaster and one of the partners in Decades — a restaurant, bar, arcade and bowling alley that opened this year on Queen Street inside the former Stahr National Guard Armory.
Ozimek, however, is much more interested in the fact that the Lancaster area has one of the highest startup rates in the state — something he says is linked to population growth. There’s some crossover between startup and small business statistics. But it’s far from an exact correlation.
“Not all small firms are startups and not all startups are small firms,” he says. “Both are important. But they’re important for different reasons.”
Small businesses have a major impact on an individual level, he says.
That smallest category for jobs by employer size includes people who work for themselves — the way Ozimek says many people want or need to work, often due to health or family obligations.
“Small businesses and freelancers matter to the people who do them and also because they help expand the economy and create opportunity,” Ozimek says. “Startups and new business matter because these are like the engines of productivity and new ideas. They help really keep an economy dynamic.”
Ozimek points to his own business venture.
“At Decades it doesn’t matter as much to the economy that we’re a small business. It does matter that we brought something entirely new to the area that didn’t exist before,” he says. “It’s a value that goes beyond the number of people employed there.”
Of course, the number of people employed somewhere can have very real implications for business owners when it comes to their eligibility for U.S. Small Business Administration and federal contracting programs. And there’s no magic number for what qualifies them there.
SBA standards are usually stated in number of employees or average annual receipts. And while 500 employees and $1 million are numbers that come up often — the definition of “small” varies by industry. Requirements change in some categories every few years — most recently in 2017.
Consider the following examples from SBA size charts. Mobile home manufacturers can have up to 1,250 employees and still fit the small business classification. But sawmills must have 500 or less. Companies that make soap and other detergents can have up to 1,000 employees. But those who manufacture adhesives must keep it 500 or less to qualify.
Many agriculture-related categories are sized by receipts rather than employees. Businesses dealing in, say, soybean or mushroom production are considered small if they have annual receipts of $1 million or less. So are goat farmers. But chicken egg producers can have receipts of up to $16.5 million and still be considered small.
None of that is what pops to mind for many when asked to envision a small business. Often that image is more mom and pop. Or in Colby Fry’s case, brother and brother.
Fry, who has long worked as an outdoor guide and kayak instructor, always had a hammock on hand but wasn’t happy with his options. About three years ago he designed one he liked. He and his brother, Charlie, officially launched Mount Joy-based Ridgeline Hammocks about a year ago. They started selling in a marketplace that’s anything but small.
“It is very odd to start on Amazon, but we did. We wanted to try to tackle that first,” he says. “Now we’re at a good spot with them. We’re on Amazon but they don’t hold any of our stuff anymore. We ship everything ourselves.”
Fry is reaching out to more local stores. Ridgeline Hammocks are currently sold at Southern End Outdoors not far from Muddy Run Park and alongside the river at Shank’s Mare Outfitters in Wrightsville. He expects to add them to four to six more stores in 2020.
Ridgeline Hammocks are currently made overseas. Fry says he hopes within five years to have built the brand enough “to bring it home” with locally sourced materials and sewing.
Size statistics aside, running a small business is not for the faint of heart, Fry concedes.
“It does take a lot of time and a lot research,” he says. “It’s just me and my brother … It’s very time consuming. But you get what you put into it.”