Small Business Facts & Data

American Business is Overwhelmingly Small Business

In 2012, according to U.S. Census Bureau data, there were 5.73 million employer firms in the U.S. Firms with fewer than 500 workers accounted for 99.7 percent of those businesses, and businesses with less than 20 workers made up 89.6 percent. Add in the number of nonemployer businesses – there were 23.0 million in 2013 – then the share of U.S. businesses with less than 20 workers increases to 97.9 percent.

Among employer C Corporations in 2012, 99.2 percent had less than 500 workers, and 86.2 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 48.4 percent of private sector payrolls in 2011, and employer firms with fewer than 100 workers employed 34.3 percent, and those with less than 20 workers employed 17.6 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 U.S. Census Bureau noted the following about small and mid-size businesses in the international trade arena in 2013:

-“Small- and medium-sized companies (those employing fewer than 500 workers, including number of employees unknown) comprised 97.7 percent of all identified exporters and 97.1 percent of all identified importers.”

-“Among companies that both exported and imported in 2013, small- and medium-sized companies accounted for 94.4 percent of such companies.”

-SMEs accounted “for 33.6 percent and 31.1 percent of the known export and import value, respectively.”

-Among all U.S. manufacturers: “96.5 percent of manufacturing exporters were small- and medium-sized companies and they contributed 19.1 percent of the sector’s $839 billion in exports. 93.5 percent of manufacturing importers were small- and medium-sized; they accounted for 13.4 percent of the sector’s $914 billion in imports.”

-Among wholesalers: “99.2 percent of exporting wholesalers were small- and medium-sized companies; they accounted for 64.8 percent of the sector’s $303 billion in exports. 99.1 percent of wholesaler importers were small- and medium-sized; they contributed 60.0 percent of the sector’s $593 billion in imports.”

Self-Employed Trending Down

Based on U.S. Bureau of Labor Statistics data, the level of entrepreneurship actually 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 5.13 million in 2011, then climbing back to 5.48 million in 2015. So, after seven years, the number of incorporated self-employed remains well short of the 2008 level.

Unfortunately, the news is even worse when it comes to the larger measure of unincorporated self-employed. The number of unincorporated self-employed declined from 10.59 million in 2006 to 9.36 million in 2014. While incorporated data only go back to 2000, unincorporated self-employed numbers date back decades. The 2014 number actually was the lowest since 1986. The level moved back up to slightly to 9.51 million in 2015. However, within 2015, the data turned down after May. Consider that the December 2015 level of 9.364 million was down markedly from the intra-year high of 9.968 million in May of 2015, and was off from the December 2014 level of 9.527 million.

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

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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Source: http://docphy.com/business-industry/business/small-business-facts-data.html