2015’s Best & Worst Cities to Work for a Small Business

by John S Kiernan

Wallet Hub 2014 Best Worst-Cities-to-Work For a Small Business
Small businesses collectively make up 99.7 percent of all U.S. employer firms, employ nearly 49 percent of the private workforce, pay about 42 percent of the private payroll, and created 63 percent of all new jobs added during the past 20 years, according to the U.S. Small Business Administration. Considering their omnipresence alone, it’s no wonder these job creators merit a five-day national recognition each year.

But with no shortage of commentary on the best cities to start a small business, we turned the tables and asked which cities are best to work for one. WalletHub analyzed the small business environment within the 100 most populated U.S. metro areas to assess their friendliness toward employees and job seekers. We did so using 11 key metrics, ranging from net small business job growth to industry variety to earnings for small business employees. The results of our study, as well as expert commentary and a detailed methodology, can be found below.

Main Findings

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Overall Rank MSA “Small Business Environment” Rank “Economic Environment“ Rank
1 Charlotte-Concord-Gastonia, NC-SC 1 18
2 Raleigh, NC 10 3
3 Oklahoma City, OK 2 21
4 Austin-Round Rock, TX 14 4
5 Omaha-Council Bluffs, NE-IA 4 12
6 Nashville-Davidson--Murfreesboro--Franklin, TN 5 17
7 Salt Lake City, UT 11 11
8 Dallas-Fort Worth-Arlington, TX 9 16
9 Houston-The Woodlands-Sugar Land, TX 12 15
10 Boston-Cambridge-Newton, MA-NH 3 29
11 Minneapolis-St. Paul-Bloomington, MN-WI 17 9
12 Denver-Aurora-Lakewood, CO 21 8
13 Des Moines-West Des Moines, IA 13 18
14 Tulsa, OK 6 44
15 Seattle-Tacoma-Bellevue, WA 16 30
16 Madison, WI 24 22
17 Ogden-Clearfield, UT 58 2
18 Bridgeport-Stamford-Norwalk, CT 15 45
19 Washington-Arlington-Alexandria, DC-VA-MD-WV 35 14
20 Grand Rapids-Wyoming, MI 18 38
21 San Antonio-New Braunfels, TX 49 5
22 Provo-Orem, UT 73 1
23 San Francisco-Oakland-Hayward, CA 19 48
24 Worcester, MA-CT 27 31
25 Cape Coral-Fort Myers, FL 46 10
26 North Port-Sarasota-Bradenton, FL 39 23
27 New York-Newark-Jersey City, NY-NJ-PA 7 84
28 Atlanta-Sandy Springs-Roswell, GA 30 32
29 Columbus, OH 43 20
30 Portland-Vancouver-Hillsboro, OR-WA 23 60
31 Richmond, VA 50 13
32 Tampa-St. Petersburg-Clearwater, FL 26 51
33 Orlando-Kissimmee-Sanford, FL 31 40
34 San Jose-Sunnyvale-Santa Clara, CA 36 37
35 Indianapolis-Carmel-Anderson, IN 28 52
36 Oxnard-Thousand Oaks-Ventura, CA 29 49
37 St. Louis, MO-IL 25 64
38 Chicago-Naperville-Elgin, IL-IN-WI 22 75
39 Wichita, KS 33 56
40 Harrisburg-Carlisle, PA 53 25
41 Boise City, ID 75 6
42 Phoenix-Mesa-Scottsdale, AZ 54 26
43 Colorado Springs, CO 73 7
44 Los Angeles-Long Beach-Anaheim, CA 8 97
45 Kansas City, MO-KS 41 55
46 Spokane-Spokane Valley, WA 37 63
47 Pittsburgh, PA 34 65
48 Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 32 69
49 Charleston-North Charleston, SC 47 43
50 San Diego-Carlsbad, CA 44 61
51 Miami-Fort Lauderdale-West Palm Beach, FL 42 67
52 Milwaukee-Waukesha-West Allis, WI 48 58
53 Greenville-Anderson-Mauldin, SC 38 76
54 Louisville/Jefferson County, KY-IN 57 42
55 Winston-Salem, NC 56 46
56 Jackson, MS 45 68
57 Cincinnati, OH-KY-IN 60 46
58 Rochester, NY 55 59
T-59 Baltimore-Columbia-Towson, MD 68 33
T-59 Albany-Schenectady-Troy, NY 68 33
61 New Orleans-Metairie, LA 20 98
62 Greensboro-High Point, NC 40 83
63 Syracuse, NY 51 66
64 Las Vegas-Henderson-Paradise, NV 65 53
65 Jacksonville, FL 72 41
66 Sacramento--Roseville--Arden-Arcade, CA 79 28
67 Memphis, TN-MS-AR 52 81
68 Little Rock-North Little Rock-Conway, AR 66 71
69 Riverside-San Bernardino-Ontario, CA 63 79
70 Albuquerque, NM 89 24
71 Baton Rouge, LA 59 88
72 Cleveland-Elyria, OH 60 88
73 Hartford-West Hartford-East Hartford, CT 68 78
74 Allentown-Bethlehem-Easton, PA-NJ 83 39
75 Knoxville, TN 62 90
76 Honolulu, HI 86 35
77 McAllen-Edinburg-Mission, TX 81 49
78 Deltona-Daytona Beach-Ormond Beach, FL 80 57
79 Buffalo-Cheektowaga-Niagara Falls, NY 64 87
80 Columbia, SC 82 54
81 El Paso, TX 76 73
82 Virginia Beach-Norfolk-Newport News, VA-NC 93 27
83 Akron, OH 71 92
84 Birmingham-Hoover, AL 77 80
85 Lakeland-Winter Haven, FL 67 93
86 Palm Bay-Melbourne-Titusville, FL 93 36
87 Chattanooga, TN-GA 88 77
88 Dayton, OH 92 74
89 Providence-Warwick, RI-MA 85 91
90 Detroit-Warren-Dearborn, MI 78 96
91 Springfield, MA 96 70
92 Tucson, AZ 97 62
93 Augusta-Richmond County, GA-SC 90 86
94 New Haven-Milford, CT 95 82
95 Bakersfield, CA 91 94
96 Fresno, CA 98 72
97 Scranton--Wilkes-Barre--Hazleton, PA 84 99
98 Toledo, OH 87 100
99 Stockton-Lodi, CA 99 85
100 Youngstown-Warren-Boardman, OH-PA 100 95

Best-Cities-to-Work-for-a-Small-Business-Artwork

6 Tips for Landing a Small Business Job

  1. Tailor Your Search, But Avoid Limiting Yourself: You obviously don’t want to cast too wide of a net, as that will simply increase the odds of missing a job you’d be perfect for as well as limit your ability to pay enough attention to each lead. However, it’s perhaps equally bad to put yourself in a box in terms of the types of jobs you’re willing to consider, the starting pay you require, and even the city in which you’ll live. So, try to leave your preconceptions behind and instead focus on the jobs for which your skills are appropriate (rather than what your degree is in), no matter where they may be.
  2. Move Proactively If Necessary: The entrepreneurs who run successful small businesses (which is where you want to be) are busy folks who garner a lot of interest from local job applicants. They tend to give these candidates more consideration, as it’s simply easier to interview them and more likely they will accept a job if offered. So, if you’re not finding the type of job you want where you’re currently living, you should definitely at least consider moving to one of the highest ranked cities in this study.
  3. Focus on the Future: Job seekers have a tendency to overly emphasize immediate compensation and the sheer availability of a job, any job. While there is obviously something to be said for being able to pay the bills in the short term, it’s also important to consider opportunities for growth within a given company, the likelihood of said company achieving long-term success, and the potential for skills development that could help you find other work in the future.
  4. Customize Your Approach: It’s amazing how little care most job applicants put into their search. Many simply apply en masse, thinking this will give them the greatest odds of finding a job. In truth, however, they’re severely minimizing their chances of finding the right job. It’s therefore important to not only customize your cover letter and resume for each position that you have serious interest in, but also to research each respective company as well as its leadership and human resources staff in order to find commonalities and gain a sense of the type of employee their looking for.
  5. Mind Your Online Footprint: As familiar as we’ve become with the Internet and social media, people still seem to forget that online information is accessible to everyone. Before applying for any jobs, it’s a good idea to adjust your privacy settings on all social media accounts as well as have explanations ready for any publically available information that might reflect poorly upon you.
  6. Have a Positive Attitude: Not only is it important to stay positive in the face of rejection, but you also have to remember that employers are looking for people who fit their organizational culture and will be pleasant to work with every day. What’s more, an eagerness to learn can be enough to get you a serious look for jobs for which you might not have a perfect background.

Ask the experts: Working for a Small Business

Working for a small business has its pros and cons — at least compared with working for a large corporation. For additional insight on the good and bad, we turned to a panel of small business experts. Click on the experts’ profiles below to read their bios and responses to the following key questions:

  1. What are the pros and cons of working for a small business?
  2. What questions should job seekers ask when interviewing for a job at a small business?
  3. Do small businesses provide recent graduates with more or less opportunities than a larger corporation?

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  • Jeffrey Hornsby Henry W. Bloch/Missouri Endowed Chair of Entrepreneurship and Interim Director of Regnier Institute for Entrepreneurship and Innovation at University of Missouri-Kansas City, Henry W. Bloch School of Management
  • Oded Shenkar Ford Motor Company Chair in Global Business Management and Academic Director of The National Center for the Middle Market at Ohio State University, Fisher College of Business
  • Cynthia Guthrie Assistant Professor of Management at Bucknell University (formerly senior vice president at Aon Consulting)
  • Rick McPherson Lecturer in Management and Organization at University of Washington, Foster School of Business
  • Alex F. DeNoble Professor & Executive Director of Lavin Entrepreneurship Center at San Diego State University, and President of The United States Association for Small Business & Entrepreneurship
  • Dennis S. Passovoy Lecturer and Sam Walton Fellow in Free Enterprise at University of Texas at Austin, McCombs School of Business
  • Gerrit Wolf Professor of Management and Director of Innovation Center at Stony Brook University, College of Business
  • Diane Halstead Mary Harris Distinguished Professor of Entrepreneurship at The University of Tennessee at Chattanooga, College of Business
  • Jennie Hedrick Coordinator of Johnson Career Center at University of Wyoming, College of Business
  • Daniel Olszewski Director of Weinert Center for Entrepreneurship at University of Wisconsin-Madison, School of Business
  • Gerald David Flint Clinical Associate Professor of Management at Texas A&M University, Mays Business School
  • Venky Venkatachalam Dean and Professor at University of South Dakota, Beacom School of Business
  • Tracy Tunwall Assistant Professor of Business at Mount Mercy University
  • Wayne Stewart Jr. Associate Professor of Management at Clemson University

Jeffrey Hornsby

Henry W. Bloch/Missouri Endowed Chair of Entrepreneurship and Interim Director of Regnier Institute for Entrepreneurship and Innovation at University of Missouri-Kansas City, Henry W. Bloch School of Management
Jeffrey Hornsby
What should job seekers ask when interviewing for a job at a small business?

What are the goals of the business? Where do you want the business to be in 5 years? What role could I play in the growth of that business? What opportunities are there going to be as the business grows and how do I access those opportunities? What are the incentives? Is there a chance for me to get an equity stake?

I direct our entrepreneurship program here at UMKC and I encourage students from all areas to look for jobs in smaller businesses. I think job seekers should look at the growth potential of the business and see if there’s a future growth for them in that business, if that’s what they desire. Some people might not want to work for a big company, so their questions are going to be a lot different. They’re going to be more concerned with security, the feedback and the relationship they have with the owner. They need to match their goals with the goals of the company - that’s what their questions should be about.

Do small businesses provide recent grads with more or less opportunities than in bigger business?

In general, it depends on the type of venture that the business is. Generally when you go to work for a smaller firm you get a much broader experience because there are fewer employees. You might do a little marketing, you might do some finance, you might have to go out on a sales call; you might be pulled out to strategy meetings. If you want to start your own business ventures someday, then I recommend working for a startup and getting a lot of experience in a lot of areas. In a large company, you generally get a deeper experience in one area but your chance to have an impact is much more long-ranged.

Make your first job choice based on the experiences that you’re going to get, make your second job choice based more on salary and an increased role. Right out of college, I think you need to emphasize where you’re going to learn more and then down the road you’ll start managing you career from a different angle.

Oded Shenkar

Ford Motor Company Chair in Global Business Management and Academic Director of The National Center for the Middle Market at Ohio State University, Fisher College of Business
Oded Shenkar
What are the pros and cons of working for a small business?

Pros: having more responsibility at an earlier stage; developing multiple skills and a well rounded (as opposed to narrow, functional) view of business which is good preparation for senior positions; receiving quick feedback on decision made; seeing the relationship between strategy and implementation.

Cons: lower compensation; less public visibility; difficulty to transfer to a large firm.

What questions should job seekers ask when interviewing for a job at a small business?

The business' growth prospects; delegation of authority; in family businesses – the career prospects of outsiders.

Do small businesses provide recent graduates with more or less opportunities than a larger corporation?

Yes and no. Yes, in the sense of developing well rounded management skills and decision making capabilities. No, in the sense of the opportunity to transfer to large businesses or government.

Cynthia Guthrie

Assistant Professor of Management at Bucknell University (formerly senior vice president at Aon Consulting)
Cynthia Guthrie
What are the pros and cons of working for a small business?

Pros – Individuals working for small businesses may…
  • Get involved in a wider variety of tasks leading to more flexible possibilities for career development and advancement.
  • Have an opportunity to learn more about an entire department/the entire business.
  • Have an opportunity to affiliate with a business that may grow rapidly.
  • Feel more of a connection to customers and the community and a greater sense that work matters and that one is making a significant contribution.
Cons – Individuals working for small businesses may…
  • Discover frustration from reporting to/working with a family member that does not have adequate skills/training for the job he or she is supposed to be doing.
  • Have fewer opportunities for advancement due to entity size and/or nepotism.
  • Have fewer opportunities for formal training.
  • Have fewer benefits (retirement plan contributions, tuition reimbursement etc.)
  • Discover that he or she is working for a second (or later) generation small business owner who does not have the same work ethic or appreciation for employees’ roles in the success of the business as those who founded the business.
What questions should job seekers ask when interviewing for a job at a small business?
  • One question to ask, regardless of the size of the prospective employer: “Six months (or a year) from now when we sit down to discuss my performance, what will I need to have accomplished for you to tell me I have done a good (excellent) job? and…”From whom will you solicit feedback in determining whether or not I have done a good job?”
The answer to this question should tell you that individual’s understanding of what the job is supposed to be (regardless of the job description) and should give you some insights as to whom you will need to please/impress. Does the person who will be your immediate supervisor agree with his/her boss on what success means? Does this person seem to have a hidden agenda? Will you have too many “bosses”?
  • It may be difficult to ask directly, but it would be important to get a sense of the level of involvement of family members. How many are employed and at what level? Having a number of family members at a business is not necessarily a problem, but it does create a different dynamic for employees who are not family members.
  • It would also be helpful to get a sense of the financial viability of the company. Many small businesses fail because of insufficient capital. Ask if management shares financial statements with employees.
  • Ask about the formality of the performance review process. Is there a personnel policy and procedure manual? This may give you some idea as to whether management has thought through and documented policies (that they presumably follow) or if an employee is subject to the whim of his or her supervisor.
Do small businesses provide recent graduates with more or less opportunities than a larger corporation?

In general, larger companies probably offer more opportunities; however, each situation is different. Most jobs are what the employee makes of them. Working for a small business can be quite fulfilling.

Rick McPherson

Lecturer in Management and Organization at University of Washington, Foster School of Business
Rick McPherson
What are the pros and cons of working for a small business?

Pros:
  • Typically good jobs by nature of small businesses – high Variety of work, high task Identity (employee has complete control over a task and owns the outcome), high Significance of work (usually something you personally believe in), good Autonomy – employee is given authority and accountability for decisions, and gets Feedback from the work itself VISAF. These are dependent upon owners/managers to let employees take advantage of the nature of small business – see below about owners driving culture.
  • Involvement in many aspects of a business – less specialization and more generalist duties, so wider exposure and influence on various areas of a business (versus just being a Brand Manager or a Quality Assurance Specialist in a larger firm for example)
  • Usually more flexible to try new ideas in terms of less bureaucracy for approvals, (however, often offset by limited funds available to experiment and fail)
  • Organizationally close to final decision makers – the owner/owners
  • Exposure to entrepreneurial mindsets and ways of thinking
  • Tends to attract like-minded people who are usually more entrepreneurial and willing to try new things.
  • Owner(s) drive culture and job satisfaction – good owners/leaders can create a great work environment
Cons:
  • High risk of continuation of business – depending on what industry and competitive positions. If in emerging industries, more uncertainty as entrants vie for survival.
  • Risk of lack of diversification - Typically a single product or service firm, or closely related, or in a small market – failure in one area leads to entire company failure.
  • Risk of acquisitions by larger firms
  • Often low availability of funds – risker businesses have more trouble getting loans and investors, so cash for growth and expansion can be difficult to create.
  • Limited upward mobility within firm.
  • Sometimes, not well managed regarding metrics and controls, customer satisfaction, financials, etc.
  • Owner(s) drive culture and job satisfaction – “bad” owners/leaders can create a poor work environment
  • Can create issues of work/life balance – small firms have fewer resources to flex during busy times, and often find it difficult to hire and quickly on-board new employees.
What questions should job seekers ask when interviewing for a job at a small business?
  • What is the culture of the company – how much autonomy will you have in your position? Can you provide examples of decisions my position will be making versus having to obtain approvals for certain decisions. (do owners allow employees to make decisions - VISAF model from above)?
  • Who do you see as your key competitors and what do you see as your competitive advantage(s)? (interviewee should have done some research on this, so this should be more of a discussion than a question)
  • Who do you think are your future competitors, or are there substitute products or services? (e.g. substitute products like online retail for bricks stores)
  • What is your favorite thing about working here?
  • What about working here could use some improvement? (note – “no improvements needed” is like an interviewee saying “I have no weaknesses”)
  • What are the growth plans for the company?
  • How does the firm raise money for expansion and growth?
  • How will I be trained or coached to learn about the company, position and job responsibilities?
  • What are the rewards for taking the risk of joining a small company (e.g. stock or stock options, profit sharing, etc.)
  • What safeguards are in place regarding acquisitions or layoffs caused from reduced business? Is there a severance package for laid off employees?
  • What are the career growth opportunities?
Do small businesses provide recent graduates with more or less opportunities than a larger corporation?

  • This is the classic “it depends” answer. If the firm is well managed, and if the employees have high Autonomy, then small businesses provide an excellent opportunity for recent graduates to learn about business from many different angles – as mentioned above, because there are more generalists than specialists, employees tend to experience and learn about a larger area of the functional area that they are working in. If the firm is well managed with good strategic thinking, aligned actions and good metrics, then the recent graduate can learn a ton about running a business from beginning to end.
  • The other issue is how much coaching or training is provided, or support from co-workers – if the culture is supportive of new people and has existing employees there to help on-board new employees, this can be great. If everyone is so busy with their own jobs and there is not value in bringing new people up to speed, it becomes a sink or swim mentality – for some people this is OK, for others it is not a successful process.
  • A third issue is the upward mobility – what are the growth plans and how do people move up in terms of more responsibility, challenges, and rewards.
  • The above said, people who work for small businesses, with their often greater scope of work (generalists), and their often greater Autonomy, they can be more qualified for other jobs at other companies because they have been working at a “higher level” even as an entry level person in a small firm.

Alex F. DeNoble

Professor & Executive Director of Lavin Entrepreneurship Center at San Diego State University, and President of The United States Association for Small Business & Entrepreneurship
Alex F. DeNoble
What are the pros and cons of working for a small business?

The pros and cons of working in a small business, I believe, depend upon both the business owner's and the employee's personal aspirations. Lets simplistically consider each perspective.

From the owner's point of view, we have to consider what they are looking to do with the business. One way to look at a small businesses is either as a "life style" venture or an entrepreneurial venture. Life style ventures are designed to provide an income stream to the owners. They are also designed so that the owner can be his or her "own boss" and maybe pass the business on to the next generation of family members. In most cases such ventures will only grow to a certain size, limited by the owner's ability to manage the venture. Growth is slow and very deliberate. These types of ventures can work very well for employees who prefer work/life balance and stability in their lives. Life style ventures are highly attractive for employees who are looking for a comfortable place to work with a relatively reliable income stream. The major downsides for employees working in these situations revolve around the issues of "upward mobility" and corresponding income earning potential. Life style ventures are built around the owner's needs and desires which may not be compatible with the needs of employees seeking more out of a job than what the owners are willing to give.

Entrepreneurial ventures are different. The founders or owners, in these cases, have very big aspirations. They believe that they have identified a very big opportunity and that the current size of their "small business" is only temporary. These entrepreneurs are growth driven and will work extremely hard and extremely long hours to gain the credibility and the momentum that will drive future value. Many times, these ventures have either raised outside investments or are building value to put themselves in the position to raise outside money. These ventures are particularly attractive to more aggressive employees who can buy into the vision of the founders. As the business grows, these employees will be given more and more responsibility quickly. They have a chance to grow with the business, gain startup experience and possibly receive some level of equity commensurate with their contributions and value to the business. Of course, the downside here is the level of stress employees will experience in such ventures. Owner / founders in these situations will expect that the employees will work just as hard as they are in growing the business. These types of ventures are usually underfunded and the employees will find themselves working more hours for less money.

So to answer your question regarding the pros and cons of working in a small business, I say that it depends. Everything is going to involve a trade-off. Of course, the best situation is to find a match between what the employees are looking for and what the business can offer.

What questions should job seekers ask when interviewing for a job at a small business?

If you take my discussion above into consideration, the job seekers first have to ask themselves what they are looking for in a work situation. If they have made up their minds that they prefer to seek employment in a small business versus a large company, they first have to evaluate their income and personal life requirements. Are they looking for upward mobility with longer term income potential or are they looking for economic stability and the flexibility to tend to other outside personal needs and aspirations. Those answers will dictate the kinds of questions they should be asking potential small business employers.

Some questions to ask would include: 1) What are current job responsibilities and expectations?; 2) Where and how can they grow with the business?; 3) What kinds of benefits can the business offer (insurance / health care etc.); 4) Will there be an opportunity to acquire equity in the company? 4) How flexible is the business in adapting to individual needs and requirements?

Do small businesses provide recent graduates with more or less opportunities than a larger corporation?

Again, this truly depends upon what recent graduates are looking for in their career aspirations. If they see themselves as entrepreneurs somewhere in their futures, then it may be beneficial to work in a small business environment. They can get a sense of the challenges of working in less defined and more resource constrained situations. They can have the ability to impact the future directions of a smaller firm. If they have the ability to acquire equity, they could be setting themselves up for potentially significant longer term rewards. But of course, this will come with the risks that the equity may never amount to the future expected value.

There are so many upsides for recent graduates to take a job with a larger corporation. Larger corporations will offer higher starting salaries, excellent benefits packages, upward mobility and great structured training programs. These employees will learn to work within a system and can grow their managerial capabilities. The tradeoffs here come with less flexibility in adapting to personal needs, very little opportunity to acquire meaningful equity positions, and less ability to impact the future direction of the company.

Dennis S. Passovoy

Lecturer and Sam Walton Fellow in Free Enterprise at University of Texas at Austin, McCombs School of Business
Dennis S. Passovoy
What are the pros and cons of working for a small business?

The real question is not what are the pros and cons (although I will attempt to answer that in a minute), but rather which kind of company does a particular individual belong in? Not everyone is genetically wired for one type over the other. Some people need the predictability and security of a regular job — most often found in a big company. Others do their best work when they don’t know from day to day what they will be working on — most characteristic of working in small companies.

My best advice to someone just starting out is try both on for size and see which feels the best. You can do the same job in both environments and feel like a hero at one job and a dog at the other. Most likely, the reason is the job-fit or environment, not the person.

With respect to pros and cons — pros for a small business include the opportunity to 1) be involved, 2) have an impact, 3) move up the ladder, 4) be an insider, and 5) gain a lot of experience very fast (principally by doing a lot of different jobs). The cons might include 1) not always knowing what is expected of you, 2) job security (because the company may not remain in business long-term), and 3) having a well defined career path — in fact, movement is sometimes hard because there are so many fewer positions available in a small company.

What questions should job seekers ask when interviewing for a job at a small business?

Most important would be questions related to the attitude and leadership style of the founders and/or immediate supervisor(s). These will most closely align with the culture of the organization, which is likely to have a greater impact on an individual at a small company over a large one.

I would also like to know what the attitude is toward risk-taking and making mistakes. How supportive are my immediate supervisors and peers? What training will be provided? What chance(s) do I have to make a difference? When people leave the company, what is the most common reason? Can I speak with someone who works there now and someone who recently left of their own accord?

Gerrit Wolf

Professor of Management and Director of Innovation Center at Stony Brook University, College of Business
Gerrit Wolf
What are the pros and cons of working for a small business?

There are two kinds of small businesses. One is the startup that hopes to grow as big as it can. The second is the family business that provides steady income for the family.

The pros of a startup is the excitement of building something new, getting a piece of the ownership, and benefiting later if it succeeds. The cons are that there is little security and income now. The pros of family business is security and continuity. The cons are conflict within the family about change.

What questions should job seekers ask when interviewing for a job at a small business?

Interviewing for a startup or family business needs to focus on what you can do for the startup or family business. It is not what they can do for you. That come after they are convinced you are worth it to them.

Do small businesses provide recent graduates with more or less opportunities than a larger corporation?

There are more opportunities in a startup or family business because there are many of them. There are more opportunities in a fast growing startup than a slow growing family business. Large businesses are often slimming down and do not have the career paths they used to offer decades ago.

Diane Halstead

Mary Harris Distinguished Professor of Entrepreneurship at The University of Tennessee at Chattanooga, College of Business
Diane Halstead
What are the pros and cons of working for a small business?

A big advantage working for a small firm is the opportunity to “wear many hats.” Small businesses often have limited resources and staffing, so employees must often perform tasks above and beyond their job description. For example, my first advertising agency position was for a family-owned firm with only five employees when I started (and eight employees when I left). As a result, I not only prepared marketing plans and media plans per my official position, I also worked with both small and large clients, wrote advertising copy, and a few times even helped the art director “paste up” a magazine ad (back in the pre-digital days). That extensive experience gave me an advantage when I eventually left and worked for a large, multinational ad agency.

A disadvantage of small businesses is, of course, fewer resources as compared to their corporate counterparts. This can mean lower pay, but more often means fewer perks like career development opportunities (e.g., specialized training, conferences and seminars, education expenses), as well as more costly insurance premiums. For family-owned small businesses, family politics and conflicts can sometimes be a downside.

What questions should job seekers ask when interviewing for a job at a small business?
  • How does the business expect to grow in the next year, three years, and five years? What strategies are expected to be put in place?
  • How much does the company expect to grow in those time frames?
(These two questions indicate the extent of goal-setting and at least semi-formal strategic planning in the firm, both of which are correlated with business success.)
  • What is the company’s policy regarding advanced education and training?
  • What are the advancement opportunities in the company?
Do small businesses provide recent graduates with more or less opportunities than a larger corporation?

I think the answer to this depends on the growth ambitions of the business owner and the owner’s entrepreneurial mindset (seeing opportunities in the marketplace, garnering the necessary resources, and taking calculated, informed risks to exploit those opportunities). Small business owners who are opportunity-seekers often grow their businesses and develop products and markets so as to ensure long-term viability. This, in turn, creates opportunities for greater experience and advancement in a firm, as well as financial rewards.

Jennie Hedrick

Coordinator of Johnson Career Center at University of Wyoming, College of Business
Jennie Hedrick
What are the pros and cons of working for a small business?

Working for a small business allows individuals (students in our case) the opportunity to see more aspects of the business, which can help them make more educated decisions as to the most worthwhile major and/or career path to pursue, as well as understand how all the parts of business work together. A con of working for a small business is that when trying to hire new talent, business owners struggle finding someone with the level of passion or dedication to take over the business and they often must close their doors.

What questions should job seekers ask when interviewing for a job at a small business?

What level of dedication is required of someone working for you? Are there any opportunities to advance within the organization or become a shareholder? What is your succession plan when you want to retire?

Do small businesses provide recent graduates with more or less opportunities than a larger corporation?

I think small businesses provide different opportunities. While small businesses don’t always hire on a regular basis, they may not have a high level of turnover. While small businesses don’t usually have time to house an internship program, they are usually more than willing to consider candidates that may not have the most work experience or best GPA. While small businesses may not have specific positions to fill that will focus on one skill, they will most likely have positions that allow for flexibility and opportunity to really see one’s ideas get adopted and grow within the organization.

Daniel Olszewski

Director of Weinert Center for Entrepreneurship at University of Wisconsin-Madison, School of Business
Daniel Olszewski
What questions should job seekers ask when interviewing for a job at a small business?

When interviewing at a small business, one important item to determine is the financial stability of the firm. I would recommend asking about the recent funding rounds, if it is a startup, and if it is an established company you could ask about recent business trends (e.g. sales, margins) and any recent layoffs.

It is also very important to determine if you will enjoy/feel comfortable working with the owner since most small businesses are run more by the owners' individual management philosophy than a broader corporate one. Asking questions such as "how would you describe the corporate culture" and asking employees to "describe the owners management approach" can provide you with insights.

Do small businesses provide recent graduates with more or less opportunities than a larger corporation?

It is difficult to generalize that the opportunities are always more or less in a small business. It is more accurate to say that they are just different in a small business. A small business often provides the opportunity to learn and apply a broader set of skills, it is easier to be recognized for your performance and they are often quicker to implement your ideas. A large corporation typically has a better and more formal training program, will better help develop your personal "brand" and usually provides more in wages & benefits.

Gerald David Flint

Clinical Associate Professor of Management at Texas A&M University, Mays Business School
Gerald David Flint
What are the pros and cons of working for a small business?

The opportunities when working for a small business can be numerous and richly rewarding. If the business is successful, being a part of the early team that built the business could be financially rewarding, if one obtains equity interest in the business. Even without an equity stake, working for a small business can allow a person to learn across a range of business skills because people often need to wear multiple hats of responsibility, learn multiple functions within the business, and interact with a larger set of stakeholders around the business. Additionally, the human relationship component of a small business can be much deeper. A sense of community, even family, can develop within a small business. When a small group of people are working closely together, essentially sharing their lives as they pursue a commonly held and deeply valued goal, the richness of the experience can be far greater than when a person is simply a part of a large, impersonal organization.

The possible negative aspects of working for a small business are mainly connected to the risk of instability in the business. While all businesses may experience instability, the effect and affect of unstable conditions upon a small business can be felt more quickly and more deeply than in a large, ongoing organization. Instability in the revenue stream of the business may quickly result in job losses. Instability in the competitive dynamics surrounding the business may require rapid adaptation to new competitive pressures, which in turn, can lead to great stress, as necessary competitive changes are made. Instability within the human relationships that develop in a small business may have more immediate and significantly felt effects within the business. If one has gained an equity position in the business, the potential for instability can directly affect one's financial future. While no business can claim to remove instability from the market, small businesses simply face more instability in general than larger, established businesses.

Knowing one's own preferences for risk tolerance, a desire to learn and grow, being involved in workplace human interactions, dealing with change, and job stability, among other personal factors is necessary to make a good decision about whether or not to work for a small business. In the end, the fit between a person and the small business environment will be critical to achieving personal satisfaction and a measure of success from the experience of working in that environment.

What questions should job seekers ask when interviewing for a job at a small business?

First, ask questions about the business model and the value proposition of the business. Large businesses can often be known well before interviewing for a position; however, small businesses are more difficult to understand from the outside looking in, without access to the publicly available records that often surround larger organizations. Knowing what the business actually does, what the vision of the organization is, how the business is competing to create value in the market, and other core aspects of the business model should be tackled first. As one is considering joining the business, it is necessary to understand whether or not it has a good business model and if one's personal profile will fit with that business model.

Second, ask questions about the people who are running the business and the culture of the organization. Why was the business started? What do people like about working for the business? How much access and communication within the business is typical? How do people deal with the day-to-day problems of managing the business? The goal is to get a sense of the human component of the organization so that a better understanding of a person's fit within the mix of human interactions already in the organization can be gained.

Third, ask questions about the competition of the business. Who are the competitors? How difficult is the competition? Has the business been able to grow against the competition? What is the plan for the business to achieve a competitive advantage in the market? Again, the goal of such questioning is to assess whether or not this business is viable and has stability and if a good fit with a person's risk tolerance is present.

Fourth, ask about what learning opportunities will be present in the business. What types of jobs and skills are to be tackled in the position? What responsibilities can be gained? What opportunities for moving across jobs and positions within the business are possible? Try to develop a sense of the personal learning and growth that can be gained by working for the business.

Finally, ask questions about the underlying vision of the owners of the business. What do they want the business to be in two years, in five years? What does the future hold for this business in their eyes? After obtaining a sense of the future goals for the business, consider whether or not being a part of that future makes sense.

Do small businesses provide recent graduates with more or less opportunities than a larger corporation?

If a good fit can be found between a recent graduate's personal characteristics and a small business, the rewards gained by working for that small business may be much greater as compared to working for a large, established organization.

The fit between the person and the business is absolutely essential for maximizing the potential rewards, though. A recent graduate who wants to move into the executive suites of already existing, large businesses should probably not engage a small business. The typical corporate management position is best engaged from within corporate management leadership tracks. A recent graduate who wants stability and lower risk in life might have a difficult time finding that outcome among small businesses. In contrast, the recent graduate who wants more diversity in job duties, more potential to gain equity interest, has more tolerance for risk and instability, and is thinking about being entrepreneurial in his or her future may discover a great fit with rewards lasting a lifetime by joining a small business.

Venky Venkatachalam

Dean and Professor at University of South Dakota, Beacom School of Business
Venky Venkatachalam
What are the pros and cons of working for a small business?

Pros -- the opportunity to pursue your passion; greater control on operations; get to do more interesting type of work; works great for someone who likes challenges, never a dull day; flexibility in working hours. Flexible pay is also a possibility (salary, equity, profit sharing, etc.).

Cons -- pay may not be attractive. Benefits such as retirement and other benefits may not exist. Too risky sometimes.

What questions should job seekers ask when interviewing for a job at a small business?

What is the business model? Competition? Is the business profitable? How long has the business been in operations? Reputation of the owners/founders? What type of compensation is offered? Nature of responsibilities? Good working conditions?

Do small businesses provide recent graduates with more or less opportunities than a larger corporation?

The answers depends on the nature of business. Small businesses, especially entrepreneurial ventures based on sound business plan and adequate funding do provide more opportunities for recent graduates.

Tracy Tunwall

Assistant Professor of Business at Mount Mercy University
Tracy Tunwall
What are the pros and cons of working for a small business?

The advantage of working for a small business is the ability to know more about almost everything that is going on in that business. As organizations become larger, they inevitably become more siloed, and you become more insulated from the day-to-day workings. Managers in smaller organizations wear many hats, and have to develop experience in more generalized areas. In my experience, a disadvantage of working for smaller employers, particularly ones that are owned by the founder, is an inability of ownership to let go of the reins as the company grows and develops. This is difficult for the organization as a whole.

What questions should job seekers ask when interviewing for a job at a small business?

With my background in human resources, I see employees who come from larger corporations face the same challenges time and time again. When applicants for a small organization only have big company experience they generally struggle. No matter what your field, you don’t realize how much support you get from other departments or how much is done by specialists in a large organization until you are the one person in charge of all of it at a small company. I guess it comes down to you don’t know what you don’t know.

As far as what applicants should ask, I would ask what positions exist in their human resource department, and whether that department sits on the Senior Leadership Team or reports directly to the CEO. That tells me a lot about where their focus is as an employer, and whether they are advanced in their thinking about employee engagement. The more engaged the employees, the more successful the company, and we all want to work for successful companies.

Do small businesses provide recent graduates with more or less opportunities than a larger corporation?

As a professor in higher education, I encourage students to begin with a small company if possible. It will be a whirlwind their first six months, but they will learn an incredible amount in a very short period of time. It also teaches them how to be a self-starter, find resources for the information that they need, and builds a sense of mastery and confidence.

Wayne Stewart Jr.

Associate Professor of Management at Clemson University
Wayne Stewart Jr.
What are the pros and cons of working for a small business?

There are several potential advantages to working in a small business. Because job expectations are often more broad in a small business, with the employee expected to address a wider variety of tasks, some might find that jobs in small businesses are more “enriched” than in the typical large organization.

This situation can alleviate some of the monotony associated with narrow, repetitive tasks. Expanded work responsibilities are good opportunities for on-the-job training, perhaps offsetting more formalized training programs, more likely offered in the large, established firm. Additionally, there is more flexibility in the typical small business, as small firms are less bureaucratic than large firms – more fluidity in organizational structure, fewer policies and standard operating procedures, etc. Thus, those desiring more autonomy on the job may find working in the small business more rewarding. With good performance, there also may be opportunities to be promoted more quickly in the small firm, and sometimes compensation may get linked to firm performance more quickly.

Above all is the experience of doing a wider range of tasks, providing a broader perspective and developing an associated skill set, which facilitate development as a manager. Moreover, the aspiring entrepreneur may gain more valuable experience in a small firm for ultimately launching his or her own venture, and for understanding how to meet the managerial challenges of this venture.

Some of the cons of working in the small business are potential drawbacks that are the flip side of the aforementioned advantages.

For example, because of the bigger job that an employee might be asked to perform in the small firm, a person might be asked to handle firm activities about which she or he has limited skills, knowledge and abilities, potentially negatively influencing performance evaluation. This can be stressful and frustrating, and might sidetrack a career (yet, as mentioned, if the employee is able to effectively handle these job responsibilities, the possibilities for meaningful advancement may arise faster in the small firm).

Ultimately, compared to the large firm, career progression may be capped more quickly in the small firm, as there are fewer levels of management and less opportunity for advancement. Such may particularly be the case in a family-owned firm where the employee is not a family member, particularly in family firms where key managerial positions are most often held by family members. It is also important to recognize that the small firm typically has fewer resources than the large firm, making the small firm more susceptible to difficulties, and maybe failure. With this is the risk of job loss.

What questions should job seekers ask when interviewing for a job at a small business?

Ask about firm goals, to understand if your personal goals are in harmony with those of the owner, which is an often cited consideration for the manager in the small firm. Inquire about job responsibilities and expectations. Is there a job description, or is the job more informally defined? If the latter, the candidate should ask questions about likely job responsibilities and the associated performance evaluation system. Also ask questions about the firm’s training opportunities. What are the opportunities for advancement and career progression?

Do small businesses provide recent graduates with more or less opportunities than a larger corporation?

Ultimately, the answer here depends on the firm and its management, and what the candidate wants in terms of the nature of the job and his or her career goals. It is important to remember that the employee in the small firm must be flexible and adaptive.

 

Methodology

In order to identify the cities that are most and least friendly toward small-business employees, WalletHub assessed the microbusiness environment within the 100 most populated U.S. metropolitan statistical areas (MSAs) across two key dimensions: “Small Business Environment” and “Economic Environment.” We then identified 11 metrics that are relevant to those dimensions to develop the final rankings. Our data set is listed below with the corresponding weight for each metric.

Small Business Environment – Total Weight: 10

  • Number of Small Businesses (with Fewer than 250 Employees per 1,000 inhabitants): Full Weight
  • Growth in Number of Small Businesses (with Fewer than 250 Employees): Full Weight
  • Net Small Business Job Growth (Number of Job Gain/Loss per Number of People Employed, for Firms with Fewer than 250 Employees): Full Weight
  • Industry Variety: Full Weight
  • Percentage of Small Businesses Offering Health Insurance to Employees: Half* Weight
  • Earnings for Small Business Employees (Adjusted for Cost of Living): Full Weight

Economic Environment – Total Weight: 5

  • Median Annual Income (Adjusted for Cost of Living): Full Weight
  • Unemployment Rate: Full Weight
  • Well-Being Index: Half Weight
  • Average Number of Hours Worked: Full Weight
  • Population Growth (Projected Population in 2042 vs. 2012): Full Weight

 
Sources: Data used to create these rankings were obtained from the U.S. Census Bureau, the U.S. Bureau of Labor Statistics, the Council for Community & Economic Research, the Kaiser Family Foundation, the United States Conference of Mayors and Gallup Healthways.

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John Kiernan is Senior Writer & Editor at Evolution Finance. He graduated from the University of Maryland with a BA in Journalism, a minor in Sport Commerce & Culture,…
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