Think About It – Microbusinesses: Standing Tall in Appalachian Communities

picture of a row of small businesses

Think About It — Microbusinesses: Standing Tall in Appalachian Communities

Helping microbusinesses succeed is not cheap. It is not easy. It is important.

Microenterprise development is often defined as providing loans (usually less than $35,000) and targeted technical assistance to entrepreneurs whose businesses employ less than five people and usually don’t have access to commercial banks.

Why are these businesses important? Consider these numbers.

• In the Appalachian region of Kentucky, 89 percent of the businesses have less than five employees.

• Also, in the Appalachian region of Kentucky, 34 percent of the workforce is employed by businesses with fewer than five employees.

• FIELD (a program of the Aspen Institute) calculates that 86.4 percent of business enterprises in the country are microenterprises.

The many drywall installers, printers, book store owners, deck cleaning operators, tailors, woodworkers and other small business owners generate needed income and real jobs for local people who have few other options, particularly in rural communities.

Is helping these businesses thrive the only answer to the economic woes of rural eastern Kentucky? No. But helping strengthen and grow these enterprises is a critical part of the solution for our region.

The economic benefits of helping form and strengthen very small businesses are proven even though they rarely provide the marquee headlines that drive most economic development funding decisions. Two recent studies indicate that low-income entrepreneurs pursuing business ownership increased their household income by 78 percent over two years and 75 percent over five years.

As most small business owners know, there are other benefits that are hard to ignore — like increased flexibility to manage work and family concerns, increased control in the work environment, the growth of self-esteem and skills associated with owning and operating a business and the development of community leadership opportunities and abilities.

There are real issues to figure out about how to best help these businesses. Challenges include connecting microbusinesses reliably to markets, supporting innovation, giving entrepreneurs access to the skills they require to be successful and managing the high cost of managerial, financial or marketing assistance tailored to meet their needs. MACED is proud to be part of the field of local and national organizations that are working to figure out how to address these challenges.

MACED believes there are many benefits to be realized from supporting a strong cottage industry of entrepreneurs and small-scale manufacturers in eastern Kentucky and Central Appalachia. Strengthening the backbone of the existing economy and laying the groundwork for future entrepreneurs are two strong reasons to conduct this difficult but important work. Microbusinesses deserve the support of local and state policy makers.

We are interested in what you think. Email us at info@maced.org if you have opinions that you’d like to share. For more information about microenterprise in the United States, see Opening Opportunities, Building Ownership: Fulfilling the Promise of Microenterprise in the United States available on the Internet at www.fieldus.org.