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A study completed by the University of Maine School of Economics shows micro-enterprises and small businesses have a positive impact on economic development and on local and national economies.
Former graduate assistant Sarah Larochelle, who wrote the research report, defines micro-enterprises and small businesses as those firms employing between one and 19 people. The study shows that between 2003 and 2007, micro-enterprises in Maine grew 9.3 percent, as did small businesses which grew 4.6 percent. The growth also proved to have a significant impact on economic development. During that same time period in Maine, micro-enterprise employment increased by 8 percent with small business employment increasing by 3 percent.
“There is much interest surrounding small business in the state. It contributes greatly to development and a good deal of resources are being devoted to it as well,” said Todd Gabe, associate professor of economics who worked as an assistant on the research committee. “So the stars really aligned for us to do this type of work.”
Along with the help of UMaine extension specialist and professor of economics James McConnon, the team attributes the growth to policies that are shifting to support the growth of small-scale business, a rising unemployment rate that turns displaced workers into owners and the ability of smaller firms to more quickly adapt than larger firms to a rapidly changing economic environment.
The research is a bright spot amidst the darkness of the recession, especially for downtown Orono’s business district — a community consisting almost entirely of small businesses.
The area on and around Main Street is host to a number of small establishments, including Pat’s Pizza, Woodman’s Bar and Grill and the Orono Pharmacy and Ice Cream Parlor.
Entrepreneur Abe Furth of Orono, his wife Heather and his business partner Micheal Horton, own and operate Woodman’s Bar and Grill. The restaurant serves a variety of beers, mixed drinks and traditional pub food and exemplifies the research’s findings. The small business employs 17 people at its downtown Orono location and will expand in the coming months.
“To me, small business is everything to a community. It not only helps to drive local economies, but it also contributes to the cultural atmosphere and depth of the area that it serves,” Furth said. “I think that small business is more personal than big business and that really helps the customers feel appreciated and welcomed. That’s what we try to do at Woodman’s: offer people a place where they can gather with friends and family to enjoy themselves. This will also be one of the goals at Verve, our new restaurant opening in October.”
The Furths are expanding their operation with Verve, offering California-style burritos, fresh smoothies and pastries among other things at the corner of Main and Mill street; a project already in the works. The two are working on plans for a second café-style location in the Collins Center for the Arts. In addition to employing 10 or more people at both new locations, the couple will continue to buy from local farms and other small businesses in the area.
The study shows there are more than 26 million micro-enterprises operating in the U.S. that represent about 87 percent of all business in the country.
