![Small firms thrive but aren't expanding | Crain's New York Business
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Small firms thrive but aren't expanding
Some may not want the hassles that come with growth; others need a helping hand.
BY ELAINE POFELDT
NOVEMBER 18, 2014 12:30 P.M.
ARTICLE COMMENTS
Paul Vieira beat the odds at IDL Communications & Electric, a Staten Island contractor in the
telecommunications field. He's grown the firm to 25 employees and $10 million in annual revenue since 2001.
"When you start a business, you always think the sky is the limit," he said.
That makes him a rarity in a city where many small businesses never grow into job creators. The number of
firms with up to four employees had a net gain of 31,421 jobs between 2000 and 2013, the Center for an
Urban Future found in recent research. In comparison, firms with more than 500 employees saw a net loss of
5,022 positions.
The think tank concluded that "too few" small firms are expanding into medium-size and large businesses, and
is calling on the de Blasio administration to help more of the tiny firms grow.
"From our perspective, the really key opportunity for New York is to make sure more of these very small
businesses are able to expand into modestly larger businesses," said Jonathan Bowles, executive director of the
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![Small firms thrive but aren't expanding | Crain's New York Business
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center. The report was funded by Citi Community Development, an arm of Citigroup that focuses on financial
inclusion and economic empowerment.
More freelancers
Whether many of these tiny firms want to grow, however, is a subject of some debate. New York is home to
many freelancers whose main ambition is to create a job for themselvesnot necessarily to build the next
Facebook. Their numbers are rising, according to another recent study by the center. It found that New York is
home to 247,025 self-employed workers, with their ranks increasing 31% from 2000 to 2012. Brooklyn has
the greatest number: 72,503.
What's happening in New York reflects national trends. The U.S. Small Business Administration released data
earlier this year that showed that nearly three-quarters of small businesses create jobs only for the ownersand
the number of such firms has been growing since 2000. Meanwhile, the number of job-creating firms has been
flat.
"The majority of small businesses and independent workers don't have growth as a primary objective," said
Steve King, a partner in Emergent Research, a company in Lafayette, Calif., that studies the independent
workforce. "They're doing it to create a job for themselves and a lifestyle for themselves." If they have to hire,
many turn to contractors, he added.
Freelance copywriter Debbie Feldstein is among these solo operators. She made a conscious decision not to
hire employees after a long career running a nonprofit. She doesn't want to manage them.
"I think that's why so many people who are freelancers seem happier than other people," said Ms. Feldstein.
"They've kind of decided, 'This is my niche. I'm not going to conquer the world. I'm not going to be a million-
dollar copywriter. I'm just going to have this good career that supports me.' "
'Huge boost' for NYC
Mr. Bowles said that even if some microbusinesses don't aim to grow, it's still worth lending more support to
the ones that do. "A number of them have real potential for growth," he said. "If we can get more of these
four-employee companies to be 10- or 20-employee companies, that's a huge boost for New York City's
economy."
The center's report urges the de Blasio administration to focus more of the programs run by the NYC
Department of Small Business Services on helping existing firms scale up. Many current programs encourage
the launching of startups, the report notes. Entrepreneurs say access to funding, in particular, is critical to
growth.
Deb Windsor, who is profiled in the report, founded ConstructionKids, an education workshop in Brooklyn, in
2008. What helped her expand to 60 people during the peak summer months and hit $1 million in annual
revenue was receiving two grantsone for $25,000 and a more recent one for $100,000through the city's
Economic Development Corp. She has used the first cash infusion to formalize her training program and invest
in technology.
"It was just a fantastic way to help a small business jump-start itself," Ms. Windsor said.
A version of this article appears in the November 17, 2014, print issue of Crain's New York Business.
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![Small firms thrive but aren't expanding | Crain's New York Business
http://www.crainsnewyork.com/article/20141118/SMALLBIZ/311169993/small-firms-thrive-but-arent-expanding[11/19/2014 12:50:29 PM]
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- 1. Small firms thrive but aren't expanding | Crain's New York Business http://www.crainsnewyork.com/article/20141118/SMALLBIZ/311169993/small-firms-thrive-but-arent-expanding[11/19/2014 12:50:29 PM] Print Email Reprints Comment Small firms thrive but aren't expanding Some may not want the hassles that come with growth; others need a helping hand. BY ELAINE POFELDT NOVEMBER 18, 2014 12:30 P.M. ARTICLE COMMENTS Paul Vieira beat the odds at IDL Communications & Electric, a Staten Island contractor in the telecommunications field. He's grown the firm to 25 employees and $10 million in annual revenue since 2001. "When you start a business, you always think the sky is the limit," he said. That makes him a rarity in a city where many small businesses never grow into job creators. The number of firms with up to four employees had a net gain of 31,421 jobs between 2000 and 2013, the Center for an Urban Future found in recent research. In comparison, firms with more than 500 employees saw a net loss of 5,022 positions. The think tank concluded that "too few" small firms are expanding into medium-size and large businesses, and is calling on the de Blasio administration to help more of the tiny firms grow. "From our perspective, the really key opportunity for New York is to make sure more of these very small businesses are able to expand into modestly larger businesses," said Jonathan Bowles, executive director of the Sign up for our FREE weekly Small Business Alert email newsletter. An essential summary of the week's top headlines selected for small businesses. VIEW SAMPLE 油| 油 NEWSLETTERS Get Crain's Small Business Alert LATEST NEWS MOST POPULAR Forest City Ratner buys out its modular partner Blackstone to sell tower for $2.3B Making Crain's list of top private companies To secure its place, Chelsea gallery buys space FOLLOW US ON Log In Register Contact Us Subscribe News Home Current Issue Real Estate Small Business Health Care Politics Technology More Industries NEWS OPINION FEATURES CURRENT ISSUE EVENTS DATA & LISTS VIDEOS NEWSLETTERS CUSTOM CONTENT Subscribe Go
- 2. Small firms thrive but aren't expanding | Crain's New York Business http://www.crainsnewyork.com/article/20141118/SMALLBIZ/311169993/small-firms-thrive-but-arent-expanding[11/19/2014 12:50:29 PM] PREVIOUS ARTICLE Businesses step up holiday social-media game SMALL BUSINESS TECHNOLOGY SMALL BUSINESS COLUMN Print Email Reprints Comment center. The report was funded by Citi Community Development, an arm of Citigroup that focuses on financial inclusion and economic empowerment. More freelancers Whether many of these tiny firms want to grow, however, is a subject of some debate. New York is home to many freelancers whose main ambition is to create a job for themselvesnot necessarily to build the next Facebook. Their numbers are rising, according to another recent study by the center. It found that New York is home to 247,025 self-employed workers, with their ranks increasing 31% from 2000 to 2012. Brooklyn has the greatest number: 72,503. What's happening in New York reflects national trends. The U.S. Small Business Administration released data earlier this year that showed that nearly three-quarters of small businesses create jobs only for the ownersand the number of such firms has been growing since 2000. Meanwhile, the number of job-creating firms has been flat. "The majority of small businesses and independent workers don't have growth as a primary objective," said Steve King, a partner in Emergent Research, a company in Lafayette, Calif., that studies the independent workforce. "They're doing it to create a job for themselves and a lifestyle for themselves." If they have to hire, many turn to contractors, he added. Freelance copywriter Debbie Feldstein is among these solo operators. She made a conscious decision not to hire employees after a long career running a nonprofit. She doesn't want to manage them. "I think that's why so many people who are freelancers seem happier than other people," said Ms. Feldstein. "They've kind of decided, 'This is my niche. I'm not going to conquer the world. I'm not going to be a million- dollar copywriter. I'm just going to have this good career that supports me.' " 'Huge boost' for NYC Mr. Bowles said that even if some microbusinesses don't aim to grow, it's still worth lending more support to the ones that do. "A number of them have real potential for growth," he said. "If we can get more of these four-employee companies to be 10- or 20-employee companies, that's a huge boost for New York City's economy." The center's report urges the de Blasio administration to focus more of the programs run by the NYC Department of Small Business Services on helping existing firms scale up. Many current programs encourage the launching of startups, the report notes. Entrepreneurs say access to funding, in particular, is critical to growth. Deb Windsor, who is profiled in the report, founded ConstructionKids, an education workshop in Brooklyn, in 2008. What helped her expand to 60 people during the peak summer months and hit $1 million in annual revenue was receiving two grantsone for $25,000 and a more recent one for $100,000through the city's Economic Development Corp. She has used the first cash infusion to formalize her training program and invest in technology. "It was just a fantastic way to help a small business jump-start itself," Ms. Windsor said. A version of this article appears in the November 17, 2014, print issue of Crain's New York Business. Blackstone to sell 1095 Sixth Ave. for $2.25B Related News Voters give high marks to mayor's pot plan Businesses step up holiday social-media game Immigrant-owned firms fight to stay put Startups aim to ease immigration hassles Business Lists Top 150 Private Companies Top 25 NYC Commercial Property Managers Crain's 2014 Growing a Business Guide Top 15 New York-Area Foundations Fast 50
- 3. Small firms thrive but aren't expanding | Crain's New York Business http://www.crainsnewyork.com/article/20141118/SMALLBIZ/311169993/small-firms-thrive-but-arent-expanding[11/19/2014 12:50:29 PM] News Real Estate Small Business Health Care Technology Politics All Industries Health Pulse Resources Archives White Papers Executive Moves Real Estate Deals Classified Job Board Business Lists Book of Lists Custom Content Opinion Editorials Letters to the Editor OpEd Columns Polls Podcasts Videos Photos Connect with Crain's Subscribe now Digital Subscription Email Newsletters Facebook Twitter LinkedIn Email Newsletters Morning 10 Blogs In the Markets The RED Wrap Greg David on NY The Insider Events Crain's Events All events Post an Event About Crain's New York Business Advertise with us Contact Us Staff Directory Reprints Newsstands Site Map Corrections Current Issue Features 40 Under 40 Best Places to Work Most Powerful Women Top Entrepreneurs Fast 50 Stats and the City Hall of Fame Most-Connected New Yorkers From Around the Web You Might Also Like Recommended by 22 Things You Should Never Do Again After 50 (AARP) How Bankers With Messy Apartments Bootstrapped MyClean, A Brilliantly Simple Cleaning Startup That Generates Multiple Millions (Business Insider) New Black Card Comes With One Big Perk A New York City Social Life (Credit.com) Insanely Popular Sweatshirt in NY Has 4 Month Wait List (Business Insider) The Black Card For The Young Social Professional (Business Insider) Hates, hates, hates food carts (Crain's New York Business) $1.4B Fulton Center subway hub opens (Crain's New York Business) Nobody Beats the Wiz co-founder pleads for leniency (Crain's New York Business) Rachel Noerdlinger to take leave of absence (Crain's New York Business) Amazon squeezes FreshDirect (Crain's New York Business) Comments POST A COMMENT Be the first to comment! Sign in or register to comment... Facebook Twitter LinkedIn YouTube RSS Crain's Connects Advisory Panel Contact Us Staff Directory About Us Chief Financial Officer New York City, NY - Pink Stone Capital Group Specialist - Energy Efficiency Department New York City, NY - Con Edison Sr Specialist - Energy Efficiency & Demand Mgt. Dept New York City, NY - Company School Business Operations Manager New York City, NY - Success Academy Chief Operating Officer New York City, NY - Centric Digital See All Jobs Post a job for $199 Jobs by SimplyHired Job Board POST A JOB
- 4. Small firms thrive but aren't expanding | Crain's New York Business http://www.crainsnewyork.com/article/20141118/SMALLBIZ/311169993/small-firms-thrive-but-arent-expanding[11/19/2014 12:50:29 PM] Meeting Planner's Guide Advertorials Our Family of Publications Crain Communications Inc. Advertising Age Crain's Chicago Crain's Cleveland Crain's Detroit Morning Insider Daily Alert Digital NY Real Estate Daily Video Small Business Rebuilding NY Editorial Calendar Privacy Policy Terms and Conditions iPad app SUBSCRIBE TODAY ENTIRE CONTENTS 息2014 CRAIN COMMUNICATIONS INC.