As a professional firm that provides equitably priced and structured working capital to B2B and B2G clients nationwide, we are always looking for ways to educate our partners, clients and referral sources about the ever-increasing role of small businesses in the United States. The more we understand the needs and concerns of the entrepreneurs who own and manage these businesses, the better we can serve and help them grow and succeed.
The U.S Small Business Administration [Office of Advocacy] periodically publishes a fact-driven overview of the current state of small businesses in the United States. Entitled “Small Business Profile”, each report incorporates the most up to date government data and present a unique snapshot of small businesses in the United States.
A small business is defined for this profile as a firm employing fewer than 500 employees. Key data on net small business job change, minority small business ownership and exporter share statistics are based on the 2015 Statistics of US Businesses, 2012 survey of Business Owners, and 2015 International Trade Administration, respectively.
The most recent Small Business Profile provides proof that small businesses are the true engine that drives the nation’s economy. As noted in the title, Small Business is really BIG business in the United States.
I have selected some of the most important facts from the profile to provide how important small businesses are and that we need to do everything we can to nurture, support and help them succeed.
Key Metrics of Small Businesses in the United States, 2018
- There are 30.2 million Small Businesses [as defined above] the United States today.
- These 30.2 million businesses are 99.9% of all businesses in the entire United States.
- These businesses have 58.9 million employees, or 47.5% of the entire workforce in the US today. Total private employment in the United States was 124 million in 2015, the last year comprehensive data is available.
- The industries where small business employment is the highest [total employees] are health care, accommodation and food services, retail trade, manufacturing and professional, scientific and technical services.
- Small businesses created 1.9 million net jobs in 2015. What is even more interesting and important than this fact is that firms employing fewer than 20 employees experienced the largest gains, adding 1.1 million net jobs.
- Of the 30.2 million Small Businesses, 8 million are minority-owned businesses. This is about 27% of the total and growing rapidly.
- Median income for self-employed individuals at their own incorporated businesses was $50,347 in 2016. In unincorporated firms, this figure was less than half, or $23,060.
Based on this data, we can see why vibrant Small Businesses are the key to economic growth and prosperity in the United States. They account for the lion’s share of employment and net job creation today.
Read the entire report from U.S. Small Business Administration’s Office of Advocacy here.