The mouse that roared: the true story of small business - includes definitions of what a small business is by the SBA, Dun & Bradstreet, SRI Consulting, and Cognetics Inc

Entrepreneur, Sept, 1996 by Janean Chun, Cynthia E. Griffin

And yet it may be simplifying matters to characterize mice so plainly. Mice aren't, well, mousy. They're not meek. They may start out slowly and steadily, and face unfair comparisons to the gazelles they are pitted against, but when it comes down to what matters--the finish line--the mice are usually the victors.

"The Clinton administration recognized that the smallest firms, those with under five employees, were creating the most jobs," says Glover. "We've been following that data from 1989 through 1994, and the trend has continued. The companies that jump from 4 to 100 employees are statistically not creating the most jobs. The smallest firms are still creating the vast majority of jobs."

The moral of the story? Favoritism is a nasty thing. There should be no competition for honor between the mice and the gazelles. Without mice, the gazelle phenomenon simply couldn't exist. These two elements of the kingdom of American Business must complement each other's efforts rather than race for the same prize. And on the day when people acknowledge this, and nurture and respect mice just as much as they do gazelles, we'll be closer to living happily ever after.

Where The Jobs Are

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RELATED ARTICLE: Counting Companies

If there were a universally accepted definition of small business, we probably would not be writing this article. Unfortunately, asking for a simple definition is like asking the hare to take the race more seriously.

Without a common foundation to build on, it's no surprise that concepts of small business vary dramatically. Here's a sampling:

* Small Business Administration: The SBA estimates the number of small businesses--those firms independently owned and operated, not dominant in their fields, and employing fewer than 500 employees--at 22 million. The SBA defines small business primarily by the number of jobs they create (see "Where the Jobs Are" on page 121) because those seem to be the most complete statistics.

The SBA would like to consider profits and return on investment in compiling their statistics, says Bruce D. Phillips, director of economic research with the SBA's Office of Advocacy. "Unfortunately, that kind of information, with the exception of corporate profits, is not available on a regular basis," he says.

The SBA's information is compiled from job creation data prepared by the Census Bureau, data leased from Dun & Bradstreet, and research studies funded by the SBA.

* Dun & Bradstreet: Dun & Bradstreet calculates a significantly lower number of small-business owners than does the SBA. Of its file of 10 million U.S. companies, the research firm considers 9 million to be small businesses.

Though some have criticized its tracking of very small businesses, Dun & Bradstreet has attempted to include more new businesses in its data-gathering methods over the past several years. A spokesperson says the organization cultivates data from "many different sources," including information collected by reporters, D&B's own database of business clients, and the Yellow Pages. The resulting 10 million businesses are, according to the spokesperson, "what we consider to be the number of economically active businesses in the United States."