The New and Improved American Small Business

Until recent years only the very large players could automate administration of health benefits, legal programs, inventory control, and a slew of other functions. "Today," says retail consultant Gary Wright, president of G. A. Wright Inc., in Denver, "many small firms electronically maintain their inventory and keep track of their customers."

"Both large companies and small are asking for heavy office-automation skills today, whereas five years ago there was a distinction. Today small companies expect the same sort of computer skills in their workers," says spokesperson Sharon Canter of Manpower Inc., the nation's largest temporary-help supplier.

They're Competitive

Once upon a time, small meant unchallenged. Geographic isolation, narrow product niches, and unique distribution channels provided entrepreneurs with virgin territory. Now everybody is trying to harvest the same turf.

"All that attention to Wal-Mart and other mass merchandisers has been a wake-up call to small retailers," says Iowa State University professor Kenneth E. Stone, who has studied the impact of Wal-Mart stores. Wal-Mart's siting more than 100 "supercenters" in small and medium-size towns in the past five years' expansion has eliminated the regional advantage of the neighborhood ma-and-pa. The smart small retailers have responded by adopting a flexible merchandise mix, variable pricing, and quality customer service.

"Small manufacturers used to compete on quality, cost, and delivery," says Bob Winrow of the New York Manufacturing Extension Partnership program. "In today's marketplace, it's delivery, delivery, and delivery, because it is assumed that your cost is competitive and your quality is up."

Nevertheless, "people are more aware than ever that you are judged on the quality of your product above all," maintains certified public accountant Paul Hense, based in Grand Rapids. His clients are primarily regional small businesses. Hense says one client has even grown his dental business by implementing a quality program that measures customer satisfaction, employee morale, compensation, and the effectiveness of his billing practices.

They're Resourceful

It doesn't matter whether some parts of the assembly kit are homemade or subcontracted; more businesses appear to be fully capable from the get-go. "They are more balanced," says Susan Davis, executive director of Investors' Circle, a network of socially responsible private investors who consider start-ups. "If they don't have the expertise themselves, they go out and get it." A huge array of services for start-ups and small businesses are enabling entrepreneurs to find, acquire, or absorb the skills and intellectual tools they lack.

Those newly available services and tools include those offered by National Institute of Standards and Technology field agents and Small Business Development Center counselors, as well as the Committee on Economic Development's annual report card and a range of publications geared to entrepreneurs. Small Business Development Center counselor and incubator manager Kim S. Pierce in Macomb, Ill., notes, "People come in today much more aware of business because of all the workshops and agencies out there."

Many of those agents help would-be entrepreneurs with such tasks as writing business plans to qualify for bank loans. Or they provide turnkey tools like Pierce's "One-Stop Shopping Kit" from the State of Illinois, which consolidates all the permits and forms needed from a new company.

Higher up the food chain, agencies help emerging businesses link up with complementary talent. "You don't see solitary individuals starting companies -- you see teams of two to five people," says John Freyhof of the Enterprise Corp. of Pittsburgh, which was formed in 1983 to help entrepreneurs find venture capital and technical support.

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