Small Business Facts & Data

Small Business Facts

A rundown on key facts, numbers and trends regarding entrepreneurship and small business



American Business Overwhelmingly Small Business

In 2011, according to U.S. Census Bureau data, there were 5.68 million employer firms in the United States.  Firms with fewer than 500 workers accounted for 99.7 percent of those businesses, and businesses with less than 20 workers made up 89.8 percent. Add in the number of nonemployer firmsthere were 22.7 million in 2012 – and the share of U.S. businesses with less than 500 workers increases to 99.9 percent, and firms with less than 20 workers increases to 98 percent.

Among employer C Corporations in 2011, 99.2 percent had less than 500 workers, and 86.4 percent had fewer than 20 employees.


The Small Business Share of GDP

A January 2012 report from the SBA’s Office of Advocacy found: “Small businesses continue to be incubators for innovation and employment growth during the current recovery. Small businesses continue to play a vital role in the economy of the United States. They produced 46 percent of the private nonfarm GDP in 2008 (the most recent year for which the source data are available), compared with 48 percent in 2002.”

Source: “Small Business GDP: Update 2002-2010”


Bulk of Job Creation Comes from Small Business

According to the SBA’s Office of Advocacy: “Small firms accounted for 63 percent of the net new jobs created between 1993 and mid-2013 (or 14.3 million of the 22.9 million net new jobs). Since the end of the recession (from mid-2009 to mid-2013), small firms accounted for 60 percent of the net new jobs. Small firms in the 20-499 employee category led job creation.”

See the Office of Advocacy’s “Frequently Asked Questions” publication.


Small Business Share of Employment

According to U.S. Census Bureau data, employer firms with fewer than 500 workers employed 48.5 percent of private sector payrolls in 2011, and employer firms with fewer than 100 workers employed 34.5 percent, and those with less than 20 workers employed 17.9 percent.

Data from the Census Bureau’s Statistics of U.S. Businesses can be reviewed here.


Small Business and Innovation

The SBA’s Office of Advocacy notes: “Of high patenting firms (15 or more patents in a four-year period), small businesses produced 16 times more patents per employee than large patenting firms.” In addition, a 2008 study by Anthony Breitzman and Diana Hicks for the Office of Advocacy (“An Analysis of Small Business Patents by Industry and Firm Size”) found that “small firms are much more likely to develop emerging technologies than are large firms. This is perhaps intuitively reasonable given theories on small firms effecting technological change, but the quantitative data here support this assertion. Specifically, although small firms account for only 8 percent of patents granted, they account for 24 percent of the patents in the top 100 emerging clusters.”

See the Office of Advocacy’s “Frequently Asked Questions” publication.

See “An Analysis of Small Business Patents by Industry and Firm Size” here.


Small Business and Trade

The International Trade Administration notes the following about small and mid-size businesses in the international trade arena:

• A record 305,000 U.S. companies exported goods in 2012, nearly 98 percent of which (297,995) in 2012 were small or medium-sized companies (SMEs) with fewer than 500 employees.

• SMEs were responsible for 33 percent of goods exports in 2012.

• Of manufacturers, 97 percent were small and medium-sized firms, accounting for 18 percent of the sector’s export value.

• Of firms engaging in trade, 83,000 both exported and imported merchandise in 2012. Of these, 79,000 (or 95 percent) were SMEs.

• SMEs accounted for 97 percent of identified importers in 2012.

See the ITA information here.


Self-Employed Trending Down

Based on U.S. Bureau of Labor Statistics data, the level of entrepreneurship has declined in recent years. That is, the number of self-employed in the U.S. has dropped notably. Incorporated self-employed fell from 5.78 million in 2008 to 5.31 million in 2013. The recent low was hit in 2011 at 5.13 million. Meanwhile, the number of unincorporated self-employed declined from 10.59 million in 2006 to 9.41 million in 2013. While incorporated data only go back to 2000, unincorporated self-employed numbers date back decades. The 2013 number was the lowest since 1986.

See the Bureau of Labor Statistics “Employment Situation,” Table A-9, historical data, here.


Survival Rate for Small Businesses

According to the SBA’s Office of Advocacy: “About half of all new establishments survive five years or more and about one-third survive 10 years or more.”

See the Office of Advocacy’s “Frequently Asked Questions” publication here.


How Small Businesses Work, Background and Education

In June 2011, the U.S. Census Bureau released its 2007 Survey of Business Owners (Note: results of the 2012 Survey of Business Owners are scheduled for release in 2015), and it supplied some interesting information about how small businesses function, including:

• 51.6 percent of businesses were operated primarily from someone’s home.

• 23.8 percent of employer firms operated out of a home.

• 62.9 percent of non-employer businesses were home-based.

• “About 28.2 percent of firms were family-owned. These family-owned firms accounted for 42.0 percent of all firms’ receipts.”

• “Business owners were well-educated: 50.8 percent of owners of respondent firms had a college degree.”

• And 13.6 percent of business owners were foreign born.

See the Census Bureau release here.


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