Posted September 30, 2014

 

One of the, well, “small” joys I’ve experienced over the years covering this industry is visiting small companies. Most are family-owned operations that typically are very welcoming and cooperative, provide unfettered access to company leaders and information and give freely of their time. When speaking to management and team members at these companies, I’m often told of the “family atmosphere” that exists at their particular workplace.

 

In recent months, I stopped by several small businesses that serve the textile industry, including Frankl & Thomas, Vanguard Pai Lung, Navis TubeTex, Conitex Sonoco, Louis P. Batson Co., Standard Dyes and McCoy Machinery Corp. All are industry suppliers and each is unique in their own way. But they do share that common trait of having a kin-like environment, encouraged from the top and nurtured from within – an attribute that often carries over into their customer relationships. (Read more about McCoy Machinery on eTC this week.)

 

This industry is chock full of small businesses, mirroring the U.S. economy, and their cumulative impact is enormous. According to the Small Business Administration, 23 million small businesses (fewer than 500 employees) in America account for 54 percent of all U.S. sales; employ 120 million people; and provide 55 percent of all jobs and 66 percent of all net new jobs since the 1970s. Further, some 19.6 million Americans work for companies employing fewer than 20 people.

 

One of the strengths of small businesses is their ability to respond quickly to customer needs and changing economic conditions. Plus, they are more suited to offering exemplary customization and personal service.

 

The companies I talked with recently all share another characteristic: diversification. These companies survived the downturn of the industry by expanding their product line, their markets and/or the sectors they serve. They also heavily invested in R&D, which has paid off in their efforts to differentiate themselves. Today, as a result, they are stronger companies that are much better equipped for whatever difficulties come their way.

 

And those difficulties are numerous. Health care reform, tax burdens, compliance and regulation issues, economic uncertainty, trade legislation, access to capital, constant technological advances, skills shortages, etc. But most of these small companies are longstanding members of our industry that have proven time and again they are resilient in the face of change.

 

That’s pretty big.