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WILKES-BARRE – Individually, small businesses make barely a ripple in the local economy, but as a group they are a major force, according to the latest Quarterly Economy Tracker published by the Institute for Public Policy & Economic Development at Wilkes University.

Small, in this case, means the nearly 9,000 businesses with fewer than 10 employees, representing more than 70 percent of all businesses in Luzerne and Lackawanna counties. Since the “small business” definition changes depending on who is doing the counting, it can be confusing to make comparisons, or to relate this figure to the national economy.

“I think there’s a misunderstanding when people talk about small business being the lion’s share of the economy,” said Teri Ooms, the institute’s executive director. To the Small Business Administration, for example, a business with less than 500 employees is small.

“And that’s pretty big in my book,” Ooms said.

The effect of these truly small businesses on the nation’s GDP is less important than is their part in the local economy and the financial health of households.

“Even a business with five employees is still paying taxes and contributing to the economy,” Ooms said.

According to figures compiled by the institute, the business category with the greatest number of establishments here and across Pennsylvania is “non-employers,” those with only a proprietor involved.

Economic impact

There are three times as many of those as there are businesses employing 10 or less. As a group, they are formidable, with average annual sales of nearly $50,000 and a total of nearly $1.4 billion.

Who are they? “A lot of the non-employers are small contractors in construction and the trades; they’re good level jobs,” Ooms said, and “certainly can become more lucrative” if they can expand their business. Others are technology or business consultants, and operators of online enterprises.

Many local small businesses are service or retail-based, said Chuck Pierce, interim director of the Small Business Development Center at Wilkes. A large share of the center’s clients plan to set up a business in their home, often to provide extra earnings. Others are taking a more traditional approach.

“There is a very heavy volume of retail-based businesses, people still looking for suitable locations,” Pierce said.

The motivations vary, he said. Some people are just tired of their jobs, others fear they’ll be laid off and have no backup income.

“I do think there’s a change in people’s attitude” and a growing appetite for risk, Pierce said, even if that means dipping into savings to get started.

Taking a shot

Scott Walsh, of Beaumont, recently took the plunge by opening All-In Custom Vapes in the Dallas Shopping Center, which with four employees fits snugly in the small business category. A sales manager for a medical supplies firm, he began planning for the business nine months ago and opened on Aug. 5.

Walsh said the medical field is going through challenging times and he was looking for a way to assure security for his family of six. The first three months of planning was spent “figuring out where the growth would be,” he said. He’s sticking with his full-time job while devoting as many off hours as he can to the business.

As with many startups, obtaining financing was an obstacle. “I was turned down about a dozen times,” Walsh said, and instead took on silent investors, who he called “people who believed in me and the product.”

Ooms thinks not enough is being done to nurture startups and small businesses in Northeastern Pennsylvania, where the rate of new business formation lags state and national averages.

“I don’t think business startup is viewed as a major strategic approach to economic development,” Ooms said. But she hopes that reveals an opportunity for the region to put in place the conditions and resources that support growth from within, reducing dependence on attracting employers from outside the area.

https://www.timesleader.com/wp-content/uploads/2015/09/small-biz-9-24-2015.pdf

All-In Custom Vapes in the Dallas Shopping Center is one of 9,000 businesses in Luzerne and Lackawanna counties with fewer than 10 employees. Pictured from left, are: Scott Walsh, owner; Ryan Walsh, vape-ologist; customers Jessica Wright of Harveys Lake and Steven Stesney of Luzerne.
https://www.timesleader.com/wp-content/uploads/2015/09/web1_vapes.jpg.optimal.jpgAll-In Custom Vapes in the Dallas Shopping Center is one of 9,000 businesses in Luzerne and Lackawanna counties with fewer than 10 employees. Pictured from left, are: Scott Walsh, owner; Ryan Walsh, vape-ologist; customers Jessica Wright of Harveys Lake and Steven Stesney of Luzerne. Pete G. Wilcox | Times Leader

By Ron Bartizek

For Times Leader

Want to start a business?

The Small Business Development Center at Wilkes University offers free startup assistance to would-be entrepreneurs in Luzerne, Carbon, Columbia, Schuylkill and Sullivan counties. Visit wilkes.edu/sbdc for more information, or call 570-408-4340.

Reach Ron Bartizek by calling 570-991-6114.