Starting a business is fraught with decisions ranging from defining the type of business to start, choosing whether to be a home-based, online, or a brick-and-mortar company, hiring staff and calculating startup and operational costs.
According to the Indiana Small Business Economic Profile 2021, there are nearly 530,000 small businesses in Indiana, employing more than 1.2 million Hoosiers.
David Watkins, senior vice president of entrepreneurship and small business for the Indiana Economic Development Corporation, said the one component large and small companies have in common also makes them competitors.
“It is not easy for a small business at times to compete on a talent basis with some of our large corporations that do great work for the community but are competing for the same workers,” Watkins pointed out.
Watkins acknowledged access to capital is important, and the corporation works to connect small businesses to a bank, investor, venture capital firm or loan fund to help them expand.
The Community Reinvestment Act, enacted by Congress in 1977, encourages depository institutions to address the credit needs of the communities in which they operate. In 2019, banks issued $1.5 billion dollars in loans to Indiana businesses with revenues of $1 million or less.
The growing use of social media and online shopping can affect the costs and efficiency of a small business’ operations. Watkins noted technology can be both an asset and a hindrance for a small business looking to solve problems.
“If technology can be leveraged to increase production, lower costs, increase the efficiency of their operations, their talent retention,” Watkins outlined. “I think the role for the state to play, in that regard, is making sure that our small businesses are aware of and staying on the cutting edge of this technological innovation so that Indiana continues to be at the very forefront of the economy for the future. “
According to the 2021 report, construction, scientific and technical services, retail trade, real estate, rental/leasing, administrative/support and waste management are the state’s leading small businesses.
Women owned 42.4% of Indiana businesses, veterans owned 7.2%, Hispanics owned 3.8%, and other racial group — American Indian and Alaska Native, Asian, Black, or African American, Native Hawaiian, and other Pacific Islanders — comprise 10.8% of small businesses in Indiana.
The Small Business and Entrepreneurship Council’s Small Business Policy Index 2019 researched 50 states based on their public policy climates for the risk-taking that drives economic growth and job creation and ranked Indiana as the eighth-most entrepreneur-friendly state in the nation.
