So last time, when we were talking about the relationships, we each have with this thing called “business” and I said something that I’m going to repeat now.

I said that business is all around us and in fact it surrounds us so completely that it can be difficult to see.

Well today we’re going to start taking a closer look.

My goal today is going to be to give you a much clearer look at the big picture.

And I want you to come away from today’s class with that big picture clearly in your mind in a way that you can remember it.

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It’s helpful when thinking about business to think about animals.

Here we have two creatures.

They’re both mammals.

We have a blue whale and we have a mouse.

The blue whale is the largest animal on the planet.

They weigh about 300,000 pounds

They can be 100 feet long

The mouse isn’t the smallest animal, but it’s pretty small.

A couple of inches long.

Weigh an ounce or two.

These are very different animals, but they also have some things in common.

They’re both mammals

They both start out as just a single cell and they grow from there.

They both eat food

They both can move around – the whale swimming and the mouse scurrying

They both procreate—they have babies…

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Businesses are like these animals.

Some are huge and some are tiny.

And then some, like startups, start tiny but try to get large, as quickly as they can.

But as we’re about to see, most businesses start out small and stay that way forever.

But what does that even mean?

What does it mean to say that a business is small?

You hear that phrase all the time, right? “Small business”?

But what does it really mean?

What makes a business “small”? Or “big” for that matter?

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Let’s think for a minute about all the ways that we could measure a business.

To measure its size, we could talk about

The number of employees—how many people work in the business?

Or we could measure the amount of revenue—how much does the business sell?

Or the amount of profit it earns on the stuff it sells.

Or we can measure the age of the company—how long it’s been in business.

There are some businesses that have been around for more than 1000 years and are still going…

Or we could measure the value of the company—how much is the business is worth?

We could talk about how many locations a business has…there are more than 70,000 7-Elevens in the world. That’s a lot of Slurpee’s!

But usually, usually when we talk about the size of a business we measure it based on the number of employees.

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So how small does a business need to be to be considered small?

The answer will probably surprise you.

You see “small business” means something very specific.

That is not a random choice.

It’s set by the Federal Gov’t.

By the Small Business Administration in Washington D.C.

And they consider a business to be small if it has fewer than 500 employees.

That’s a lot of people!

And being small matters.

Small businesses can get access to gov’t contracts and small business loans.

In a minute we’re going to look at that in a lot more detail.

But first lets talk about big businesses.

If less than 500 employees makes a business small,

How big are the big ones?

Turns out they’re truly huge.

Take a guess what the world’s biggest employer is and how many people work there?

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Walmart! Weighs in with 2.3 million people. That’s the population of Houston Texas!

Number two? McDonalds. 2.1 million people work at McDonalds

Not only are Walmart and McDonald’s the world’s biggest companies by number of employees, they are two of the largest organizations of any kind.

Only two are bigger.

The People’s Liberation Army—the Chinese military has 2.2 million active duty personnel

And the US Dept of Defense—the American military—employees over 3.3 million military and civilian employees.

But let’s get back on track.

We said that businesses are measured by the number of employees they have.

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But not all companies have employees!

Most don’t.

There are 36.5 million businesses in the United States.

That’s 1 business for every 10 Americans.

Most of those businesses—30.4 million of them – are non-employer business.

Meaning they don’t have any employees.

Only the business owners—the self-employed—work in these businesses.

There are 36.5 million businesses in the US.

Only 6.1 million have employees.

And most of those—3.8 million businesses – 2/3 of all business that have employees have fewer than 5 people working for them.  

Another million have between 5 and 10 employees.

675,000 business have 10-20 employees

500,000 have between 20-100 employees

90,000 have between 100-499 employees

And only 21,000 business have more than 500 employees.

So only .3% of businesses are “large” businesses.

But we can also look at total number of people working for companies.

121 people work for businesses w employees

61 million—just over half--work for large businesses with more than 500 employees

The other 60 million work for small businesses with fewer than 500 employees

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Wrapping up

So as I said at the beginning, my goal for this class was to give you the big picture and to do it in a way that you would be able to remember.

We covered a lot but the main thing to remember is that there are many, many different types of businesses out there.

We talked about all the different ways that we could measure those businesses.

And we said that the most common way was by the number of employees working for the business.

We learned that most businesses have no employees at all—only the owners work in them.

And that of the businesses with employees, most—99.7% were “small businesses”.

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