The Small Business Ecosystem We Need, Doesn’t Exist (Yet)
- Terrand Smith
- May 7
- 5 min read
Updated: Jul 30
A new approach to small business support systems
Did you know that the human body is 44% water? If that balance fails, if this proportion is compromised, our entire system falters. The same is true of our economy. Small businesses make up nearly 44% of U.S. GDP, and when their stability is at risk, our national economy feels it at every level.
The U.S. Small Business Administration (SBA) defines a small business as an independent business with fewer than 500 employees. These enterprises collectively generate 43.5% of the nation’s Gross Domestic Product (GDP) (SBA, 2024) and make up 99.9% of all U.S. businesses. When the infrastructure, funding, and coordinated support behind these businesses shift or weaken, we risk destabilizing nearly half of our national economic engine. That is not something to take lightly.
At 37 Oaks, through our courses, coaching, curricula, and candid conversations, we keep our fingers on the pulse of small business sentiments, challenges, and opportunities. And over the past few months, we’ve noticed that things are shifting: federal funding is reducing, confidence is dipping, long-term sustainability is at risk, and data is starting to reflect this reality.
The most recent NFIB Small Business Optimism Index dropped by 3.3 points in March 2025 to 97.4, its largest monthly decline since 2022, with a sharp 16-point drop in the net percentage of owners expecting better business conditions (now at just 21%) (NFIB, March 2025). At the same time, the U.S. Chamber of Commerce Q1 2025 Small Business Index found that only 29% of small businesses believe the U.S. economy is in good health, and comfort levels with cash flow dropped from 72% to 66% in just one quarter (U.S. Chamber, 2025). This isn’t just a red flag, it’s a call to action.
This poses new opportunities and collaborations for business support organizations, workforce development agencies, financial institutions/CDFIs, philanthropic foundations, local and state policymakers, and economic development leaders. Small businesses don’t just provide us with innovative products, they occupy storefronts, power tax bases, create jobs, develop innovation, and build community wealth.
43.5% of GDP is just one measure of small business contribution. Let’s take a closer look at the full scale of their economic impact.
The Economic Power of Small Businesses
Small businesses are the quiet sustainers and drivers of U.S. economic growth, delivering jobs, taxes, innovation, exports, and revitalization across all regions. Their impact is massive, even if their size is modest.
Job Creation & Employment
Small businesses employ 61.7 million Americans, representing 46.4% of the private-sector workforce. (SBA Office of Advocacy, 2024). Since 1995, they’ve created 63% of net new jobs in the U.S. economy. (SBA, 2023)
Economic Output & Tax Revenue
Small businesses contribute 43.5% of U.S. GDP, totaling over $11 trillion in economic activity. (SBA Office of Advocacy, 2024). They also provide significant tax revenue that supports schools, public infrastructure, and essential local services.
Community Revitalization
90% of small business owners donate to local causes, and 76% volunteer time or services. (NFIB, 2023). They activate downtown corridors, reduce commercial vacancy, and bring life and commerce to disinvested areas.
Innovation & Global Trade
Small firms produce 16x more patents per employee than large corporations. (SBA, 2023). They account for nearly 33% of the known U.S. export value. (U.S. Census Bureau, 2023)
From corner shops to high-growth startups, small businesses don’t just participate in the economy, they shape it. They represent American ingenuity and are essential to solving some of the country’s most urgent economic challenges.
When The Support System Shifts, Small Businesses Feel It
For decades, federally supported programs provided technical assistance, funding, and education to small businesses. Today, that support adds up to an estimated $200 to $250 billion annually, including SBA-backed loans, federal grants, technical assistance funding, and contracting opportunities. This level of investment reflects just how vital small businesses are to our national economic infrastructure.
But that system is shifting, and with those shifts come real vulnerabilities:
Decentralized Support: Changes in federal funding priorities are leading to a patchwork of localized support, creating disparities in access and quality.
Underfunded Local Infrastructure: Community-based organizations are being asked to serve growing demand with fewer resources and outdated systems.
Confusing Navigation: Entrepreneurs often face a disjointed web of services that are hard to find, compare, or trust, especially if they don’t have connections.
Market Pressures: Inflation, labor shortages, supply chain volatility, and rising commercial rents all squeeze already-thin margins. Dropping consumer confidence is impacting their sales.
Capital Barriers: Many small businesses struggle to secure affordable, growth-ready funding.
This combination of pressure points creates a dangerous paradox: small businesses are more essential than ever, but they are also more vulnerable.
A New Chapter of Small Business Support Systems
So, how do we build a stronger infrastructure considering recent system and support shifts? At 37 Oaks, we’ve begun testing new models that push beyond our traditional approaches to small business education and support. Through two recent prototypes, we explored what’s possible when diverse partners come together, each bringing their own strengths, to build a more cohesive, high-impact support system. These partnerships didn’t just combine resources, they created integrated experiences that addressed multiple layers of entrepreneurs' needs at once. From retail operations and staffing to wholesale readiness and production, each collaboration became a living blueprint for how to meet small business owners where they are, while guiding them toward where they want to grow.
Retail and Workforce Development: One of our partnerships brought together a workforce development organization and a local community-based nonprofit to help small business owners develop, manage, and retain their first employees. Scaling a business requires scaling a team, and for many of the entrepreneurs we serve, that’s not a skillset they’ve had the chance to build. This collaboration combined 37 Oaks University education, team-building frameworks, 1:1 coaching, stipends for entrepreneurs and employees, workforce training, and case management. Each partner contributed its expertise, demonstrating that even modest but well-structured investments can accelerate meaningful outcomes.
Wholesale Readiness and Manufacturing Growth: In another initiative, we partnered with a nonprofit manufacturing organization committed to growing small business manufacturing capacity in its state. Together, we focused on preparing businesses for wholesale readiness because, without demand, supply-side investments alone won’t drive growth. This program offered plant tours, direct coaching with manufacturing and wholesale experts, and a specialized 37 Oaks University curriculum on scaling production.
These are just two examples of how regional partnerships, grounded in shared purpose and local assets, can become blueprints for scalable national solutions. With the right infrastructure, these smaller pilots can inform larger frameworks that reduce fragmentation, amplify what works, and deliver stronger, more consistent support and experiences to small business owners across the country. When we align education, technical assistance, funding, workforce, and industry expertise in intentional ways, we can create more robust and scalable models of support. What starts as a local pilot can become a regional or nationally relevant framework, especially when rooted in shared goals, measurable outcomes, and systems that adapt to the realities of entrepreneurship.
These lessons aren’t just ours, they’re building blocks for anyone ready to reimagine what small business support can look like.
Now is the time to align, innovate, and act. At 37 Oaks, we, like many mission-driven organizations, understand the urgency of building smarter systems to support America’s small businesses. We’re ready to put our shared strengths to work and co-create what’s next. If you’re committed to reimagining a new chapter of small business support systems, let’s see what we can build together.
Founder/CEO
37 Oaks
Who is 37 Oaks?
37 Oaks is an education company that strengthens communities by transforming small businesses into valuable, commerce-driven assets. Our goal is to empower them through Commerce, Innovation, and Strategy.
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