Quick: Can you name the largest employer in the Lehigh Valley or in Berks County?
It's a trick question. Because the answer isn't Lehigh Valley Health Network with its more than 10,000 employees. Or Reading Hospital and Medical Center with nearly 7,000 employees or even East Penn Manufacturing with more than 5,800.
The answer for both is the same: small business.
Whether you define small business as less than 500 employees as the U.S. Small Business Administration does or less than 50 employees as the Lehigh Valley Economic Development Corp. does, more people in the Lehigh Valley and Berks County work for small businesses than anywhere else.
Of the slightly more than 15,000 businesses in the Lehigh Valley, 13,727 have fewer than 50 employees. "That means that 94 percent of our businesses in the Lehigh Valley are 50 employees or less," said Don Cunningham, president and CEO of LVEDC.
Berks County has about 8,270 businesses with fewer than 500 employees.
"That makes up 99.78 percent of the total establishments in the county," said Michael Rivera, assistant vice president of small business services of the Greater Reading Chamber of Commerce & Industry.
"Obviously, small businesses play an extremely important role in the backbone of our economy," Rivera said.
Cunningham said when a large company relocates to the Lehigh Valley, it makes headlines and garners all of the attention. But in reality, it's the small businesses that account for much of the job growth.
"Eighty percent of the job growth in the Lehigh Valley comes from existing businesses," he said. "Since small business makes up 94 percent of our businesses, and 80 percent of job growth comes from existing business, it's fair to say the majority of the job growth in the Lehigh Valley is from small business."
Economist Kamran Afshar of Bethlehem said that small business plays such an important role in the Lehigh Valley economy is not unique.
"The majority of businesses nationwide are small businesses, also," he said.
However, he said, the Lehigh Valley does seem to have an even greater share of smaller businesses than many communities.
"Fifty-one percent of the businesses in the Lehigh Valley have one to four employees. Another 21 percent have five to nine employees. Now you're at 72 percent and you just don't see it to the extent you do here everywhere."
Just because the employer is small doesn't mean the salary is, said David Noel, CEO and president of Dual Temp in Allentown.
"We do construction work in the mechanical trades and service work, and the jobs are relatively well-paying. It's not uncommon for a plumber to earn $100,000," he said.
STEADY AS SHE GROWS
Fred Fenselau, president of Working Dog Press, a division of Bethlehem Business Forms in Allentown, said small businesses also tend to be steady employers.
"It's not like we hire 100 employees one year and lay off 200 the next. We add a person or two every year and we never let anyone go," he said. "Ours, as most small businesses, is a steady environment."
Fenselau's company is up to 20-plus employees and looking to hire another soon. Five years ago, it had 11 employees.
With small businesses, employees tend to "stick around for the long term," Fenselau added. "There's nothing worse than having to hire someone new and train them again how to work with your customers.
"We maintain sales at a nice level, and one of the reasons is our crew sticks with us a long time and our customers appreciate it. Our customers aren't going anywhere when their customer service rep is like a friend."
Fenselau said many small businesses tend to be like families where everyone looks out for everyone else.
"Small businesses tend to treat their employees like family members, and that's always good for people," he said.
Barry Diehl, owner of Your Neighborhood Dry Cleaner based in Emmaus, agreed that small businesses have the advantage of being like a close-knit family.
"When we went to hire, we hired people that we knew," said Diehl, who three years ago started the green dry-cleaning business that picks up/drops off dry cleaning from its customers' homes or offices.
One of its three employees was a stay-at-home mom whom Barry and his wife, Sue, knew through church. Another employee's sister had been their baby sitter.
"We had known the family for years," Diehl said.
In addition to creating jobs and a family friendly work environment, small businesses also have the advantage of being flexible, experts agreed.
Economist Afshar said small businesses have to be innovative and flexible to survive.
"If they don't do something better tomorrow, they might not be around tomorrow," he said. "Small businesses have to be innovative to compete and have to find new things to do."
Rivera said small businesses can be flexible because decision-making is local and requires fewer layers of approval.
Many people who work for large companies often start small businesses because the large business they work for isn't interested in their "better way."
Their idea doesn't fit into its business model. But the small-business owner/entrepreneur often can take his idea and find a way to make it work and start his own company, Rivera said.
Paul Ricciardi's business is as small as it gets. He's the only employee of Golden Pepper Productions in Bethlehem, which provides documentaries, marketing, promotional and corporate videos, event coverage and more. When Ricciardi needs help, he hires freelancers.
Ricciardi said his clients appreciate that he is a small business.
"Lots of larger businesses in the area have told me they love having me here and don't have to bring someone in from the city every time they want to do something." Because he is small and doesn't have a lot of overhead, Ricciardi said, he is able to charge very competitive rates for his services.
The one drawback to being a small business, he said, is that everything falls on his lap.
"The small business owner doesn't always have everything at his disposal and has to make things work on his or her own," he said. "I can't afford an IT department to call up and say, 'My computer is down.' But you learn."
Small businesses also make great contributions not only to the economy but the community, the leaders agree.
The Boys and Girls Club of Allentown operates five buildings. Noel's Dual Temp maintains the buildings for the organization pro bono.
"We don't charge for our services there," Noel said. "We do it because we can. And I know it means a lot to them."
Your Neighborhood Dry Cleaners has participated in food and coat drives and made cash donations to the Bach Choir of Bethlehem and the Lehigh Valley Zoo.
Working Dog Press has donated printing services to the United Way of the Greater Lehigh Valley, including program books for its galas.
On the scale of what a large employer such as PPL or Air Products can and does do for community services, the contributions of small businesses are no match, Noel said.
"But we try at our own level to give as much as we possibly can and … it adds up," he said. "It is a lot."
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