Not every business owner wants to grow his or her business. Most self-employed and “lifestyle” business owners are satisfied if they can make a decent living for themselves, and maybe hire a few other people. The majority of small businesses serves a local geographic area and does not have a market footprint outside the region.
These small, local businesses are very important to a community. In addition to creating a modest number of jobs, they contribute to the quality of life and availability of amenities that make the community a more desirable place to live and work.
Growth-oriented entrepreneurs have both a strong desire for growth and the potential capacity to realize sustained growth. These entrepreneurs want to scale up their businesses and seek to reach external markets, thus expanding the economy of the region by bringing in new wealth in the form of investment, jobs and careers, and tax base. This new wealth then “recirculates” throughout the local economy and stimulates the growth of local businesses.
The ‘sweet spot’ for most community entrepreneurship support programs is to target entrepreneurs who have started a venture that is between one and five years old and want to grow it, regardless of its size. These ventures aren’t necessarily “high-tech,” but they have developed some sort of innovation in their product, process or delivery method. They also have a potential or actual market outside the local economic region, and create quality, living-wage jobs.
Edward Lowe Foundation reports data on the composition and growth of the business universe in the United States over time. In this database, resident companies are broken out by stage:
Self-employed (one employee)
Stage 1 (2-9 employees)
Stage 2 (10-99 employees)
Stage 3 (100-499 employees)
Stage 4 (500+ employees)
Stage 2 companies as those “that have grown past the startup stage but have not grown to maturity. They have enough employees to exceed the comfortable control span of one owner/CEO and benefit from adding professional managers, but they do not yet have a full-scale professional management team.” In terms of numbers, “employee numbers and revenue ranges vary by industry, but the population of firms with 10–100 employees and/or $750,000 to $50 million in receipts includes the vast majority of second-Stage companies.”