Page 270 - 1-Entrepreneurship and Local Economic Development by Norman Walzer (z-lib.org)

Getting Started in Community-Based Entrepreneurship 259

gram, download the county’s information and perform the calculation. Be-
cause the U.S. Census Bureau does not publish employment by firm size,
one can only determine an estimated range of the percentage of employ-
ment in small firms and, since small firms are often only one person, it is
safest to assume the true percentage is toward the smaller side of the range.
3
A sample calculation for Kalamazoo, Michigan, in 2003 follows:
1. Number of firms with 1 to 4 employees: 2,620
2. Total countywide employment: 112,823
3. Minimum percentage of employment in small firms: 2,620/112,823
2.3%
4. Maximum percentage of employment in small firms: (2,620 4)/
112,823 9.3%

With these simple data, one might conclude that Kalamazoo should try to
increase the number of small firms regardless of the distribution of firm
sizes within the one to four employee size firm category.
A counterexample is Keweenau County, also in Michigan. The county ex-
perienced a copper boom in the 1860s and went into a steep population de-
cline after the last mine closed. The area is now home to artisans who en-
joy the picturesque shoreline and cheap housing. In Keweenau County, the
number of firms with one to four employees is 59, while total countywide
employment is 245. This makes the range of employment in small firms
from 24 to 96 percent.
Clearly, Keweenau County is an extreme case, and the higher end of the
range is completely unrealistic. It does illustrate, however, that some
counties would benefit more from attention to expansion of existing
firms than by focusing on start-ups. In this case, growth could perhaps
best be stimulated through better marketing, an apprenticeship program,
formation of artist cooperatives, recruiting a midsize firm that might sup-
ply the many artists, or perhaps a resort-type hotel to provide new cus-
tomers for the artists.
On the other hand, the community may have adjusted to its lifestyle and
may prefer to maintain its current status as a place where rugged individu-
alists can come to develop their craft. It is therefore important to under-
stand community preferences before launching major economic develop-
ment initiatives.
The small firm employment to total employment ratio provides a quick real-
ity check and is a first step in determining how much a specific area might
focus on encouraging additional start-ups, and in helping existing small
businesses survive. As the Keweenau County example shows, practitioners
can still pursue an entrepreneurial development strategy even if there are
sufficient numbers of small firms; it is just that the strategies will focus