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Small Businesses Undergird Region’s Economy

YOUNGSTOWN, Ohio — Small businesses across Ohio and Pennsylvania created nearly 100,000 jobs in 2016, according to the latest report from the Office of Advocacy of the U.S. Small Business Administration. 

Pennsylvania realized 51,487 net new jobs to the economy through small businesses that year, while Ohio saw 46,439 net new jobs during 2016. 

Small businesses in Ohio accounted for 2.2 million employees, or 45.8% of the private workforce in 2016.  In Pennsylvania, these companies employed 2.5 million people, or 46.6% of the private workforce.

The vast majority of companies in both states are regarded as small businesses. In Pennsylvania, 1.1 million firms, or 99.6% of all businesses in the commonwealth, are categorized as small businesses. In Ohio, the 949,479 firms qualifying as small businesses account for 99.6% of all businesses.

Companies with fewer than 100 employees make up the largest share of small-business employment in both states, according to the report.  About 1.8 million are employed by these firms in Ohio; about the same number are employed by companies of a similar size in Pennsylvania. 

The health-care and social-assistance sectors employed the most people among small businesses in both states during 2016, the report says. In Ohio, the sector employed 358,046, in Pennsylvania 402,456.  

Health Care and Social Assistance top employment in Ohio and Pennsylvania.

In Ohio, the manufacturing sector ranked second-highest within the small-business economy. These companies employ a total of 291,048. The manufacturing sector in Pennsylvania was ranked third-highest with 265,053 employees, while accommodation and food services was ranked second with 297,648 employees.

During the third quarter of 2017, 5,422 companies were established in Ohio, generating 20,339 jobs, according to the SBA.  During the same period, 5,496 establishments closed, resulting in 21,307 jobs lost. Thus, the quarter reported a net loss of 968 between startups and exits.

In Pennsylvania during the same period, 6,907 establishments started, generating 23,314 jobs. In the same quarter, 7,460 companies folded, resulting in the loss of 23,148 jobs. In total, Pennsylvania posted a net gain of 166 jobs between startups and exits during the period.

Providing assistance to startups or small businesses looking to expand is critical for the regional economy, says Paul Bucciarelli, who oversees the Lawrence County, Pa., region for the Small Business Development Center at Duquesne University.

Bucciarelli works several days a week in the Lawrence County Regional Chamber of Commerce offices in New Castle, Pa.  

“I have about 30 to 35 clients – about 15 to 20 of them are active,” he says. “They run the gamut of ideas, but there are a lot of restaurants, catering and food-service businesses.  There’s also a lot of interest in the pet market – grooming, training and boarding,” he says.

“We try to figure out how to put a business plan together and help them with assessing the market and the market conditions,” Bucciarelli says. 

“They need to be unique and be able to solve problems,” he says. 

Each month, Bucciarelli hosts workshops on various topics facing small businesses while maintaining an outreach program that is used to support existing companies. “We put together an action plan where we work over time to retain and create jobs as well.”

Linda Nitch, director of economic development for the Lawrence Chamber, says she and Bucciarelli work closely with one another through a state outreach program called Engage. “It’s a state business-retention program,” she says. 

“The idea is to do outreach with industries and manufacturers to see how we can support them in terms of workforce development, training and apprenticeships. It’s a major focus.”

Published by The Business Journal, Youngstown, Ohio.