Small Businesses: The Backbone of Kitsap's Economy and a Catalyst for Innovation

Small business is big business–both in the US and in Kitsap.

According to the Small Business Administration (SBA), small business employs just under half of all private sector employees in our nation (46%). In Kitsap, the number is even higher: Here small businesses employ 61% of our private sector, or about 37,000 of our 60,000 private sector workers, per census data. 

What a “small business” is covers a wide range of firms, from microbusinesses with five or fewer employees, to much larger firms with hundreds. Condensing SBA guidance, we can define small businesses as independently-owned companies with 500 or fewer employees and under $47 million in revenue (and yes, often far less). I estimate that about 20 of Kitsap’s Top 75 employers are small businesses–so, about a quarter, based on our recently-published KEDA 2023 Top Employers report.

Today’s small businesses find themselves in a difficult, rapidly-changing environment, where they are innovating and adapting to survive. They’re increasing their use of technology to decrease costs and increase efficiency–everything from their slow start to adopt AI (about 5% of small businesses, per the SBA), to how restaurants have prioritized remote order, payment and to-go systems. Here in Kitsap, the products we build and sell locally are getting more high-tech too: Port Orchard-based Bio Fiber Industries sells a wide range of industrial hemp products like building materials, including “hempcrete;" Bainbridge startup Foil Cedrus makes carbon fiber masts that allow surfboards to hover above water, achieving higher speeds in the new-ish sport of foil surfing.  

The landscape of American small business is dynamic and changing rapidly, including who is likely to own a small business. Over the next five to ten years, the demographics of small business ownership are going to drastically change in the US.  The so-called silver tsunami is coming.

"Small business owners have been at battle since the great recession. Now 11,000 baby boomers turn 65 every day," said Taralee Muhli, Senior Director at Transition 360, a local business brokerage. "It's a buyer’s market out there." 

Muhli’s work to help owners prepare their business for sale is economically critical. For the many small businesses who don’t end up with either a buyer or someone to take over the business–they simply often just close. That’s not good for a community, as it decreases economic activity, local business occupancy and the most important thing of all, jobs. Muhli urges small business owners to get ready well ahead of time if they’re thinking about a sale.

“It takes time to prepare, it takes time to find the right buyer,” Muhli said, pointing out that Baby Boomers should particularly get on the ball. “For the best outcome, the sooner owners start the sales process, the better prepared they will be to start their next chapter.” A recent article in the Minority Business Review points out that "roughly 10 million small companies, or 65-75% of small firms, will likely go up for sale in the next decade as baby boomers start to exit the marketplace.” This will result in a business value turnover of a potential “$14 trillion over just the next five years alone."

In order to discuss these economic factors, as well as value and connect with Kitsap’s small business community, KEDA is holding Fall Forum 2024: Celebrating Small Business in Bremerton from 2:00 to 6:00 p.m. on October 24. Our keynote is Leo Flor, Chief Legacy Officer for Seattle’s FIFA World Cup 2026 organizing committee, who will talk about the up to 750,000 people and $100 million in associated value that could result from that event–a potential windfall for local, small business. We’ll also hear from experts about how to brand on a budget, access capital, as well as local food and restaurant entrepreneurs (Restaurant Lola, Peninsula BevCo, Iggy’s Alive and Cultured) about the difficult business environment they face. Relevant to small business, we’ll also have a dozen resource tables available on site, including local lenders, Puget Sound Energy, small business advisors, and relevant government agencies like the Departments of Revenue and Labor and Industries. 

It’s a dynamic time in the US for small business. Here in Kitsap, as we continue to grow from both long-term federal investment and the ongoing growth of the Greater Seattle area, I'm convinced our small businesses are positioned for success. We hope to see you at Fall Forum 2024, a great opportunity to connect with Kitsap's local business community and for small businesses to obtain a wide range of resources. See you there. And finally, one reminder as we head into fourth quarter and the end of the year–please remember to shop and spend local, as much as you can! 
 

Joe Morrison is Executive Director of the Kitsap Economic Development Alliance. Transition 360, Bio Fiber Industries, Foil Cedrus, SeattleFWC26 and many others are speaking at KEDA Fall Forum 2024: Celebrating Small Business on Thursday, October 26, from 2:00 to 6:00 p.m. at Kitsap Conference Center, Bremerton Harborside. Sales end soon, visit http://kitsapeda.me/24Fall for tickets.