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Small Business Facts & Data

Small Business Facts

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

Small Business and the Economy

American Business Is Overwhelmingly Small Business

According to U.S. Census Bureau data (2009 data):

• There were 5.8 million employer firms in the U.S.

Firms with less than 20 workers made up 89.7 percent of these businesses.

Firms with fewer than 500 workers accounted for 99.7 percent of employer firms.

• Add in the number of nonemployer firms – there were 22.1 million in 2010 – then 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 97.8 percent.

See the Census Bureau’s Statistics of U.S. Businesses at http://www.census.gov/econ/susb/, and http://www.census.gov/econ/nonemployer/index.html.

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.”

See “Small Business GDP: Update 2002-2010” at http://www.sba.gov/advocacy/7540/42371.

The Bulk of Job Creation Comes from Small Business

According to the SBA’s Office of Advocacy:

• “Small firms accounted for 65 percent (or 9.8 million) of the 15 million net new jobs created between 1993 and 2009. Much of the job growth is from fast-growing high-impact firms, which represent about 5-6 percent of all firms and are on average 25 years old.”

See the Office of Advocacy’s “Frequently Asked Questions” publication at http://www.sba.gov/advocacy/7495/29581.

Small Business Share of Employment

According to U.S. Census Bureau data:

• Firms with fewer than 100 workers employ 34.9 percent of private sector payrolls, and those with less than 20 workers employ 17.7 percent.

• Firms with fewer than 500 workers employ for 49.4 percent of private sector payrolls, and

See the U.S. Census Bureau at http://www.census.gov/econ/smallbus.html.

Small Business and Innovation

The SBA’s Office of Advocacy notes that small firms:

• “…produce 16.5 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 at http://www.sba.gov/advocacy/7495/29581.

See “An Analysis of Small Business Patents by Industry and Firm Size” at http://archive.sba.gov/advo/research/rs335tot.pdf.

Small Business and Trade

The International Trade Administration has reported:

• “Small and medium-sized enterprises (companies with fewer than 500 workers) would be among the major beneficiaries of U.S. initiatives to reduce foreign barriers to U.S. exports. A total of 286,661 SMEs exported from the United States in 2010, accounting for 97.8 percent of all U.S. exporters. SMEs also accounted for 97.2 percent of identified importers in 2010, with 176,635 SME companies reporting imports.”

• As for the value of exports and imports, the ITA noted: “The known export revenue of SMEs rose to $383.4 billion in 2010, up 24.1 percent from 2009. SMEs were responsible for 33.7 percent of goods exports in 2010. On the import side, SMEs imported $531.3 billion in goods in 2010, which was a 23.2 percent increase from 2009. SME imports accounted for 31.6 percent of goods exports in 2010.”

• In addition: “Of those companies that engaged in trade, 80,640 both exported and imported merchandise in 2010. Of these, 76,335 were SMEs, accounting for 94.7 percent of companies that both export and import.”

See the ITA information at http://www.trade.gov/mas/ian/smeoutlook/index.asp.

Self-Employment 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 5.12 million in 2011.

• Meanwhile, the number of unincorporated self-employed declined from 10.59 million in 2006 to 9.45 million in 2011.

• While incorporated data only go back to 2000, unincorporated self-employed numbers date back decades. The 2011 number actually was the lowest in a quarter century.

See the Bureau of Labor Statistics “Employment Situation,” Table A-9, historical data at http://www.bls.gov/cps/cpsatabs.htm.

Survival Rate for Small Businesses

According to the SBA’s Office of Advocacy:

• “Census data report that 69 percent of new employer establishments born to new firms in 2000 survived at least 2 years, and 51 percent survived 5 or more years.

• Survival rates were similar across states and major industries.

• Bureau of Labor Statistics data on establishment age show that 49 percent of establishments survive 5 years or more; 34 percent survive 10 years or more; and 26 percent survive 15 years or more.”

See the Office of Advocacy’s “Frequently Asked Questions” publication at http://www.sba.gov/advocacy/7495/29581.

How Small Businesses Work, Background and Education

In June 2011, the U.S. Census Bureau served up the latest release from its 2007 Survey of Business Owners, 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 at http://www.census.gov/newsroom/releases/archives/business_ownership/cb11-110.html

 


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