4. All businesses whose primary purpose is to produce tangible goods. 5. All businesses whose primary purpose is to provide a service rather than make tangible goods. Chapter 5 The Challenges of Starting a Business 228
Figure 5.4 A high percentage of small businesses are in the retail sector. © 2010 Jupiterimages Corporation About 20 percent of small businesses in the United States are concentrated in the goods-producing sector. The remaining 80% are in the service sector.“July 2010 - Preliminary Information on Business Owner Demographics by the U.S. Census Bureau,” Small Business Administration, Office of Advocacy, (accessed August 31, 2011). The high concentration of small businesses in the service-producing sector reflects the makeup of the overall U.S. economy. Over the past fifty years, the service-producing sector has been growing at an impressive rate. In 1960, for example, the goods- producing sector accounted for 38 percent of GDP, the service-producing sector for 62 percent. By 2010, the balance had shifted dramatically, with the goods- producing sector accounting for only 22 percent of GDP, while the service-producing sector had grown to 77 percent.“GDP Composition by Sector,” The World Fact Book, - world-factbook/fields/2012.html (accessed August 31, 2011). Goods-Producing Sector The largest areas of the goods-producing sector are construction and manufacturing. Construction businesses are often started by skilled workers, such as electricians, painters, plumbers, and home builders. They tend to be small and generally work on local projects. Though manufacturing is primarily the domain of large businesses, there are exceptions. BTIO/Realityworks, for example, is a manufacturing enterprise (components come from Ohio and China, and assembly is done in Wisconsin). Another small manufacturer is Reveal Entertainment, which was founded in 1996 to make and distribute board games. Founder Jeffrey Berndt started with a single award-winning game—a three-dimensional finance and real estate game called “Tripoly”—and now boasts a product line of dozens of board games. There are strategy games, like “Squad Seven,” which uses a CD soundtrack to guide players through a jungle in search of treasure; children’s games, like “Portfolio Junior,” which teaches kids the rudiments of personal finances; and party games, like “So Sue Me,” in which players get to experience the fun side of suing their neighbors and taking their possessions.Go to Reveal Entertainment at (accessed August 31, 2011). Chapter 5 The Challenges of Starting a Business 5.3 What Industries Are Small Businesses In? 229
How about making something out of trash? Daniel Blake never followed his mother’s advice at dinner when she told him to eat everything on his plate. When he served as a missionary in Puerto Rico, Aruba, Bonaire, and Curacao after his first year in college, he noticed that the families he stayed with didn’t follow her advice either. But they didn’t throw their uneaten food into the trash. Instead they put it
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