When most people think of small businesses, they think of small retail or professional services firms. While those are important, many other types of companies also qualify as small businesses. The US Small Business Administration (SBA) defines a small business as an entity with fewer than 1,500 employees and less than $38.5 million in annual receipts. In early May, as it has for more than 50 years, the SBA celebrated National Small Business Week. This special week recognizes the critical contributions of the small business sector, which contributes significantly to the nation’s economy.
Small businesses are hugely important to the economic success of the State of California and play an outsized role in the Tri-Valley as well. For every 10 jobs at a small business, another seven are supported in the local community, according to the Small Business Economic Impact Study commissioned by American Express in 2018. An average of two-thirds of every dollar spent at small businesses in the US stays in the local community. Moreover, every dollar spent at a small business creates an additional 50 cents in local business activity thanks to employee spending and businesses purchasing local goods and services.
In 2017, California had 4.2 million small businesses that employed 7.2 million people, or 48.5% of the private workforce, according to the U.S. Small Business Administration (SBA) Office of Advocacy. Its most recent economic profile of California defined small businesses as firms with fewer than 500 employees. By that measure, more than 99% of firms within the state are small businesses. Such firms created 214,569 net jobs in 2019, according to the SBA, and firms employing fewer than 20 employees experienced the most growth, adding 147,780 net jobs.
Then the pandemic hit, and small businesses suffered a major blow. Earlier this month, California Governor Gavin Newsom announced an expansion of California’s Covid-19 Small Business Relief Grant program by an additional $1.5 billion, bringing the total to $4 billion. Earlier, the Governor’s office also announced a $6.2 billion tax cut for businesses hit hardest by the pandemic, as well as $95 million to jumpstart California’s tourism industry, an important economic driver within the state and the Tri-Valley region, that was significantly affected by the pandemic.
“Our small businesses have faced unprecedented challenges over the past year, and we’re stepping up to meet the moment, making historic investments to provide businesses with the support they need and jumpstarting California’s economic recovery. That’s why we’re implementing the largest small business relief program in the entire country,” said Governor Gavon Newsom when making the announcement. “This is money in the pockets of business owners to make payroll and cover the bills as we prepare to fully reopen California’s economy on June 15.”
“The strength of Pleasanton’s commercial community is its diversity across company size and industry sector, through which every business helps to sustain the local economy,” says Lisa Adamos, Economic Development Manager for the City of Pleasanton. “Nearly 4,000 small businesses with 100 or fewer employees call Pleasanton home, and collectively they employ more than 24,900 people. Small businesses provide many of the products and services desired by our residents and comprise a robust business-to-business network, helping to keep dollars in Pleasanton. Moreover, the entrepreneurial spirit is strong and finds great success in Pleasanton’s environment that supports the growth of start-ups into major companies, with examples such as Zeltiq Aesthetics, 10X Genomics, Unchained Labs, and Veeva.”
The value of the Tri-Valley region as an innovation hub has become increasingly recognized over the years as local startups have developed into global companies thanks to unique offerings that help clients and consumers. Zoho, for example, gives customers a powerful suite of software to run their businesses. More than 7,000 employees support Zoho’s 60 million global users. Some of those employees are located at Hacienda, where the private company’s US headquarters is located. Of course, Zoho did not begin life as a multinational business-to-business operation. Like most companies, it started small and grew over time.
Nearly 95% of the approximately 700 companies at Hacienda occupy fewer than 50,000 square feet of commercial space, or roughly half of the development. By many measures that makes them small companies, and likely only a few will become giants like Zoho and Veeva Systems, another Hacienda company. But small companies can also be hugely important to the success of larger companies and institutions. That is a reality NASA acknowledged recently when the space agency awarded $45 million in contracts for 365 proposals through its new Small Business Innovation Research and Small Business Technology Transfer program.
"At NASA, we recognize that small businesses are facing unprecedented challenges due to the pandemic," said Jim Reuter, Associate Administrator for the agency's Space Technology Mission Directorate, on the occasion of announcing an early release of funds to the companies accepted into the program. “We hope the expedited funding helps provide a near-term boost for future success."
Vector Atomic, which has its headquarters at Hacienda, is one of the recipients of those NASA funds. As noted in its application, “Future NASA missions including deep space navigation, space-based gravitational wave detectors, and multistatic radar imaging will require timing precision beyond the capabilities of current hardware.” The small company is working with Harvard to develop improved technology for timekeeping and metrology. If successful, Vector Atomic’s technology will not only help NASA but also find commercial applications. In environments without access to global positioning systems, “a highly stable clock can extend missions by maintaining synchronization between distributed systems,” according to the company.
Small businesses power the national, state, and regional economies. Healthy small businesses are necessary for the strong employment and stable communities long enjoyed by Tri-Valley residents. They employ more people and support their local communities in ways that may not always be fully appreciated by those who work in larger companies or in the public sector. State, regional, and local officials along with business leaders do understand the value of small businesses. Many are working to support the small businesses that have survived the pandemic thus far so they can continue playing a key role in their communities.
For more information about the California Covid-19 Small Business Relief Grant program and additional state aid, please visit www.covid19.ca.gov/business-and-employers.
For more information about the City of Pleasanton’s Economic Development Department, please visit www.cityofpleasantonca.gov/gov/depts/ed/default.asp.
For more information about NASA’s Small Business Innovation Research and Small Business Technology Transfer program, please visit www.sbir.nasa.gov.