Here’s a small business fact: collectively they produce $6 trillion worth of annual products and services and employ nearly half of the American private sector work force. For the past several decades small business, not big business, was the foundation of job creation. But as I pointed out in my last post, small business hiring during this recovery is slow. Here are 12 more facts about small business that you should know.
- There are nearly 28 million small businesses.
- These 28 million outnumber corporations 1162 to 1.
- They account for 54 percent of all sales.
- Small business provides 55 percent of all jobs.
- They created 64 percent of all net new jobs since the late 1990s.
- And since the beginning of this decade, small business generated 95% of all new American jobs
- Nine out of 10 firms in the United States employ fewer than 20 employees.
- In the next 5 years, 37 percent of small businesses will have more than 5 employees.
- U.S. small businesses pay 44% of total US private payroll.
- They generate half of America’s GDP and are responsible for 97.5% of all identified exporters with 31% of export value.
- Fifty-two percent of small businesses are home-based. But not to be overlooked is that the small business sector in America also occupies 30-50% of all commercial space, an estimated 20-34 billion square feet.
- Small business produces 16.5 times more patents per employee than large firms.
A recent Census Bureau study shot down a common misperception that small businesses are more inclined to exit business than large businesses. This misperception exists because of the high exit rate of micro-firms (1-4 employees), which averaged 18.4% over the last three decades. While this rate was high, their entry rate was even higher at 21.3%, therefore producing a net job gain of 2.9% over the period.
Sources: SBA Office of Advocacy, Kauffman Foundation Study, ADP, Census Bureau