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New Analysis Finds Small Businesses Are Powering Establishment Growth, But Medium and Large Firms Contribute More To Job Gains

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Self-Employed Workers In The Inland Empire Growing Nearly as Fast as Wage and Salary Workers

August 22, 2019— RIVERSIDE, Calif. (www.ucr.edu) — A new study that looks at the size of businesses in the Inland Empire is shedding light on growth trends occurring in small businesses and among self-employed workers in the region. The analysis, released today by the UC Riverside School of Business Center for Economic Forecasting and Development, examines establishments of all sizes and evaluates which contribute the most to local economic growth, with some surprising results.

The study reveals that although Very Small (1-4 employees) and Small (5-19 employees) businesses account for over 86% of all establishment growth in the region, these businesses are responsible for just 17.7% of job gains. The analysis looks at growth from 2011 through 2016, the most recent data available.

“While small businesses are vital, they’re often perceived as major contributors to overall economic expansion,” said Robert Kleinhenz Executive Director of Research at the Center for Economic Forecasting. “In the Inland Empire, they largely drive establishment growth but they don’t contribute to employment nearly as much as medium and larger sized businesses do.” Kleinhenz says this kind of granular understanding is critical in order to craft public policies and economic development strategies that work effectively with what’s happening on the ground in the local economy.

Overall, there were 71,807 business establishments in the Inland Empire in 2016, an 11.1% increase over 2011, which is a testament to the robustness of the regional economy’s recovery from the Great Recession. And although similar to the state as a whole, the mix of businesses in the Inland Empire differs somewhat with relatively lower concentrations of Very Small businesses but higher concentrations of Small and Medium (20-99 employees) sized businesses. This same pattern applies to the growth of establishments, with the number of Small and Medium sized businesses increasing more in the region than in the state and the number of Very Small Businesses lagging the state over the study period.

The analysis says these and other nuances are worth exploring – and factoring into local economic development programs – as they may reveal regional conditions that make these businesses more conducive to the Inland Empire.

Other key findings that may inform future growth and development strategies include:

  • Small But Numerous: Nearly 85% of all business establishments in the Inland Empire are Very Small or Small.
  • Industry (also) Matters: Five industries account for 57% of all Very Small and Small businesses in the Inland Empire: Retail Trade, Health Care, Construction, Professional/Scientific/Technical Services, Real Estate Rental/Leasing, and Transportation/Warehousing.
  • How Many Self-Employed?: There were 308,401 self-employed workers in the Inland Empire in 2016, equivalent to slightly less than one-quarter of all wage and salary workers in the region.
  • Self-Employed Numbers Keeping Up: The number of self-employed workers in the Inland Empire jumped 9% from 2011 to 2016, only slightly behind the growth rate of businesses with wage and salary workers (11.1%).
  • Uber/Lyft Type Services Partially Driving Self-Employed Numbers: The Transportation and Warehousing industry experienced a whopping 70% jump in the number of self-employed workers from 2011 to 2016 – partly due to increases in the region’s goods movement industries but also driven in part by on-demand shared ride services such as Uber and Lyft.
  • Small Works Better: In general, industries that experienced the largest increases in small business establishments and self-employed workers tend to favor smaller firm size due to low entry costs, making it easier to start up a business, or because the type of business itself is difficult to operate at a large scale.

The complete analysis, Small Businesses and the Self-Employed in the Inland Empire, is available here.
The UC Riverside School of Business Center for Economic Forecasting and Development is the first major university forecasting center in Inland Southern California. The Center produces economic forecasting and policy research focused on the region, state, and nation. Learn more at UCREconomicForecast.org.

The Inland Empire Business Journal (IEBJ) is the official business news publication of Southern California’s Inland Empire region - covering San Bernardino & Riverside Counties.

Business

San Bernardino’s Chem-Pak Ushers in New Era: A Legacy Continues with Fresh Leadership

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Under new ownership by Eric L. Goodman, San Bernardino’s long-standing Chem-Pak embarks on an expansive journey, building upon its 36-year legacy of community and industry service.

Terry Goodman, owner of Chem-Pak, recently announced his retirement, marking the end of a remarkable journey in the industrial supply industry. Starting as a one-man operation 36 years ago, Goodman transformed Chem-Pak into a business with multiple offices and approximately 15 employees.

In the late 1980s, Goodman was a sales representative for Easterday Janitorial Supply Company near Norton Air Force Base. When the company shut down its San Bernardino office, Goodman, a Highland resident, opted to start his venture rather than commute to Los Angeles. He sought support from his customers, laying the foundation for what Chem-Pak is today.

“I never aspired to have numerous employees. My goal was to build a team that enjoyed a good living without feeling drained at day’s end,” Goodman explained. “Having experienced ‘Corporate America,’ where successful territories are often split to limit earnings or, conversely, underperformers are let go, I wanted to follow a different path.”

Many of Chem-Pak’s team members have been with the company for 20 to 30 years, a testament to the familial and collaborative environment Goodman cultivated. “I’ve always viewed my team not just as employees but as equal partners in this journey. There’s nothing in this company that I haven’t done myself. When a few team members were out with COVID recently, I didn’t hesitate to help with deliveries. Our customers’ needs come first,” he said.

Pablo Carbajal, manager of the San Bernardino store for 22 years, shares his commitment to Chem-Pak. “Despite numerous job offers over the years, this is where I belong. Goodman’s mentorship taught me everything from equipment knowledge to customer service, shaping my understanding of the business world,” Carbajal expressed.

Richard Bowman, a contract employee for about 30 years, also praised the company’s ethos. “Working for Chem-Pak has been empowering. It’s akin to finding a golden opportunity.”

Goodman recalls landing major accounts, including Carl’s Jr. and Stater Bros, as career highlights. However, the COVID-19 pandemic posed unprecedented challenges. “During the pandemic, our business boomed, particularly for hand sanitizer and toilet paper. We had to adapt quickly to the surging demand and the evolving ‘new normal’ of a post-pandemic economy,” he recounted.

Goodman’s work ethic dates back to his teenage years, starting with a part-time job at a gas station and later at McMahan’s furniture warehouse. He emphasizes the importance of networking and real-world experience for young people. “I often speak at career days in San Bernardino schools to offer students firsthand insights into the workforce, beyond what they hear from peers or parents,” he said.

Looking forward, Goodman plans to travel and engage in volunteer work, confident in leaving Chem-Pak in capable hands with family members and experienced employees at the helm.

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Inland Empire Regional Chamber of Commerce Welcomes Hawaii Chamber as Honorary Global Member

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Empowering Future Generations: IERCC and Chamber of Commerce Hawaii Forge Partnership for Youth Development

In a landmark meeting that signifies the growing collaboration between regional chambers of commerce, the Inland Empire Regional Chamber of Commerce (IERCC) proudly welcomed the Chamber of Commerce Hawaii as an Honorary Global Member. This momentous occasion was marked by a ceremonial presentation led by Eddy Sumar, MBA, CCE, CICE, a distinguished member and Chair of the Education and Youth Skills Development Liaison at IERCC.

Eddy Sumar, renowned for his passionate advocacy for youth education and skill development, met with Sherry Menor-McNamara, CCE, President & CEO, and Tyler Hunt, Associate Vice President of Membership Services, of the Chamber of Commerce Hawaii. The meeting was not just a formal presentation but also an opportunity to share the innovative approaches IERCC is employing to champion youth development.

In a unique and inspiring gesture, the Chamber of Commerce Hawaii representatives were introduced to IERCC’s youth initiatives through a trilogy of educational books authored by Eddy Sumar himself. These books – “A Treasure Hunt With OTIS,” “The Hidden Dreams,” and “The Cutting Edge” – are a testament to Sumar’s dedication to empowering the youth. Each book addresses critical areas of youth development:

  • “A Treasure Hunt With OTIS” provides wisdom to guide young lives.
  • “The Hidden Dreams” unlocks the potential of identifying and pursuing youthful aspirations.
  • “The Cutting Edge” offers vital insights into understanding credit and financial literacy.

Edward Ornelas, Jr., President & CEO of the Inland Empire Regional Chamber of Commerce, expressed his enthusiasm for this new partnership, stating, “This collaboration with the Chamber of Commerce Hawaii represents a significant step in our ongoing commitment to foster the leaders of tomorrow. By combining our resources and expertise, we can more effectively prepare our youth for the dynamic world they will inherit. Our shared vision for youth development and education is the cornerstone of this partnership.”

The Chamber of Commerce Hawaii expressed its enthusiasm for the collaboration, recognizing the value of the resources provided by IERCC. This partnership is a significant step towards a shared goal of fostering a brighter future for youth through education, skill development, and empowerment.

The Inland Empire Regional Chamber of Commerce is enthusiastically developing plans to launch a summer internship program exclusively for students from the Inland Empire, offering them the opportunity to travel to Hawaii for this enriching experience. This initiative, which stems from the IERCC’s recent collaboration with the Chamber of Commerce Hawaii, is focused on providing Inland Empire students with a unique opportunity to immerse themselves in the diverse business and cultural environment of Hawaii. The program aims to equip these students with invaluable hands-on experience in various industries, enhancing their skills and broadening their perspectives. This visionary approach underscores the IERCC’s dedication to fostering the professional and personal growth of its youth, preparing them for successful careers in an increasingly interconnected world.

The IERCC is committed to continuing these collaborative efforts and looks forward to a fruitful and impactful partnership with the Chamber of Commerce Hawaii, collectively striving to nurture the leaders of tomorrow.

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Corona Factory Files Landmark Trade Secret Lawsuit in New Hampshire Federal Court

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Leading Private Label Company Alleges Massive Data Breach by SGS North America, Inc., Threatening Millions in Investment and Profits

Amid a surge of corporate theft nationwide, U.S. Continental Marketing, Inc. has initiated trade secret litigation against SGS North America, Inc. alleging misappropriation of proprietary and confidential chemical formulations that may cost U.S. Continental millions of dollars.

The largest private label leather and fabric care company in the world, U.S. Continental operates out of a 100,000 square foot factory in Corona, California, and partners with popular footwear, fashion, and furniture brands such as Birkenstock, Timberland, and Michael Kors to develop a range of products. The company provides commercial packaging solutions as well.

In its complaint filed last week in the U.S. District Court for the District of New Hampshire, U.S. Continental alleges that earlier this year, it spent millions to develop five unique and secret chemical formulations for an unnamed customer for use on branded textiles. Those formulas were sent to SGS North America for independent testing.  David Williams, U.S. Continental’s President, explains, “Leading up to its testing, we made very clear to SGS that the confidentiality of any and all information about our formulations was critical. Third parties, and even our customers, could not be privy to our proprietary data and SGS knew that.”

Williams added, “To put a finer point on the sensitivity of the formulations in question, we negotiated an ironclad NDA with SGS, which it signed, promising not to disclose confidential information related to our formulations to anyone without written approval.”

U.S. Continental’s complaint alleges that despite its assurances, SGS twice sent detailed, unredacted testing reports directly to the customer in August, revealing specifics about the chemical formulations SGS promised to keep under wraps.

According to Williams, “By virtue of SGS’s indiscretion, which one of its Vice Presidents cavalierly claimed was a ‘mistake,’ our customer was sent all the information it needed to manufacture essential chemical formulations on its own. That puts at risk the $2 million we invested in R&D, along with another $20 million or so in profits from our manufacturing agreement with the customer. It only gets worse from there if SGS discloses our proprietary information—which it refuses to return—to any others.”

Jeffrey Farrow, a partner at Michelman & Robinson, LLP, which represents U.S. Continental along with local counsel in New Hampshire, says, “It’s beyond crucial that trade secrets, like my client’s chemical formulations, be carefully safeguarded. By failing to do so, SGS breached its NDA—a breach that continues given that the data at issue has yet to be returned despite multiple requests from U.S. Continental. This is simply unacceptable and through this lawsuit, we want SGS to know that its unlawful disclosure of trade secrets, and unlawful retention of them, won’t go unchecked.”

The lawsuit is currently pending and U.S. Continental is awaiting a response from SGS.

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