A summary of key facts, figures and trends on entrepreneurship and small business
The American company is an overwhelmingly small company.
Based onGivenFrom United States. Bureau of the Census, there were 6.1 million employers in the United States in 2019 (most recent data).
● Companies with less than 500 employees represent 99.7% of these businesses.
● Companies with less than 100 employees represented 98.1%.
● Companies with less than 20 employees represented 89.0%.
● Companies with less than 10 employees represented 78.5%.
When are non-employers considered?–there were 26.5 million in 2018(latest data) – the share of US companies with less than 20 employees increases to 98.0% and the share with less than 10 employees registers 96.0%.
Of approximately 32.6 million businesses in the US, only 20,868 had 500 or more employees. The US economy is a small business economy.
body C: Among employer companies C in 2018 (latest data):
● 72.5% had less than 10 employees
● 84.7% had less than 20 employees
● 96.2% less than 100
● 98.9% had fewer than 500 workers.
When are non-employers considered?(most recent data from 2018), companies with less than 20 employees represent 89.3% of the total number of C companies, and the participation with less than 10 employees registers 80.8%.
Much of the job creation comes from small businesses.
According to the SBALaw Firm:
● “Small businesses have accounted for 62% of net new job creation since 1995. (See Office of Advocacy “frequent questions" Publication.)
● “Between 2000 and 2019, small businesses generated about two-thirds of net new jobs. The volatility of the 2020 recession altered long-term trends.”
● Small businesses employ 46.8% of private sector employees.
Furthermore, as noted in "Small Business Profile 2020”:
● Small businesses created 1.6 million net new jobs in 2019, and businesses employing fewer than 20 workers created 1.1 million net new jobs.
Small Business Participation in Employment
In accordance withGivenUS Census Bureau:
● Companies employing less than 500 workers occupied 46.4% of the private sector payroll in 2018.
● Companies employing less than 100 employed workers 32.4%.
● Companies employing less than 20 employed workers 16.0%.
The share of small businesses in GDP
according to astudyingPosted by the SBA Law Office:
“In the 16 years from 1998 to 2014, the share of small businesses in GDP fell from 48.0% to 43.5%. However, the drop in the share of small businesses in GDP was not due to a decline in the level of GDPS [ie, the share of GDP produced by small businesses].”
As to why small business participation has declined, he explains:
“The increase in the GDP implies that the decrease in the share of small companies in GDP is attributable to faster growth among large companies. Specifically, after adjusting for inflation, the real GDP of large companies grew by 2.5% per year, compared to only 1.4% per year for small companies.
new business applications
The United States. The Census Bureau has been releasing data on new business applications, that is, "business applications for tax IDs as indicated by requests for an Employer Identification Number (EIN) through IRS Form SS-4 submissions." ", since July 2004. These numbers are not actual business formations, but rather a measure to complete people's tax identification numbers. Based on these data, projections are made about real future commercial formations.
With the start of the pandemic in 2020, one of the most exciting and surprising results has been the spectacular leap in terms of commercial applications. This is encouraging for the future growth of entrepreneurship, which is vital for recovery and economic growth.
Total commercial applications reach record levels: As seen in the following two graphs, Total Business Apps and High Trending Business Apps (i.e., companies most likely to have payrolls) posted record levels in 2021, with total business apps registering 5, 4 million and high-trend applications reaching 1.8 million.
Source: Federal Reserve Bank of St. Louis, FRED
Source: Federal Reserve Bank of St. Louis, FRED
Small Businesses and Innovation
“Small businesses account for about 96% of employers in patent-intensive manufacturing industries, a percentage that held steady between 2007 and 2012. Pay and revenue increased. This increase was particularly notable in companies that manufactured computers and peripheral equipment, communications equipment, or semiconductors and other electronic components.
Additionally, a 2008 study conducted by Anthony Breitzman and Diana Hicks for the Office of Defense("An Analysis of Small Business Patents by Industry and Company Size")found that “small companies are much more likely to develop emerging technologies than large companies. This is perhaps intuitively reasonable, given theories about small firms making technological change, but the quantitative data here supports this claim. Specifically, while small companies account for only 8% of granted patents, they account for 24% of patents in the top 100 emerging clusters.”
Consult the law officePublication "Frequently Asked Questions".
In a2013 study("Product Innovations by Young and Small Firms") for the SBA Law Office, it was found that smaller and younger firms tend to produce greater innovations. It was observed:
“The author has generated patent citations per dollar of research and development stock for companies of different sizes and ages. The results for small versus large firms and young versus old firms were similar. Small companies obtained an average of 1.2626 patent citations per million dollars in R&D efforts, compared to 0.5712 for large companies. Young companies averaged 1.2117 patent citations per million dollars in R&D stock, while old companies averaged 0.5344.
“Restricting the focus of the study to young small businesses showed that they are highly productive innovators. Companies of less than average size (290 employees) and age (18 years) averaged more patent citations per million dollars of R&D efforts than large older companies, 1.7535 vs. 0.3424, respectively.
Small business and world trade
Based on data from the lastreportFrom United States. Bureau of the Census, we see the following about the roles that small and medium-sized businesses played in international trade, in general and with the three main US trading partners (Canada, Mexico and China), in 2019.
• Among all identified US exporting companies, 76.3% had fewer than 20 employees, 86.3% fewer than 50 employees, 91.4% fewer than 100 employees, and 97.4% fewer than 500 employees.
• Among all identified US export manufacturing companies, 56.5% had fewer than 20 employees, 74.1% had fewer than 50 employees, 84.3% had fewer than 100 employees, and 96.1% had less than 500 employees.
• Among all identified US companies exporting to Canada, 61.7% had fewer than 20 employees, 76.1% fewer than 50 employees, 84.1% fewer than 100 employees, and 94.5% fewer than 500 employees.
• Among all identified US companies exporting to Mexico, 57.9% had fewer than 20 employees, 71.7% fewer than 50 employees, 80.3% fewer than 100 employees, and 92.9% fewer than 500 employees.
• Among all identified US companies exporting to China, 53.0% had fewer than 20 employees, 67.6% fewer than 50 employees, 77.2% fewer than 100 employees, and 91.3% fewer than 500 employees.
• Among all identified US importing companies, 76.7% had fewer than 20 employees, 86.4% fewer than 50 employees, 91.3% fewer than 100 employees, and 97.3% fewer than 500 employees.
• Among all identified US importing manufacturing companies, 49.5% had fewer than 20 employees, 66.1% had fewer than 50 employees, 77.5% had fewer than 100 employees, and 93.5% had fewer than 100 employees. 7% had less than 500 employees.
• Among all identified US companies importing from Canada, 43.6% had fewer than 20 employees, 55.5% fewer than 50 employees, 64.9% fewer than 100 employees, and 83.0% fewer than 500 employees.
• Among all identified US companies importing from Mexico, 58.6% had fewer than 20 employees, 68.2% fewer than 50 employees, 74.4% fewer than 100 employees, and 86.4% fewer than 500 employees.
• Among all identified US companies importing from China, 74.6% had fewer than 20 employees, 84.8% fewer than 50 employees, 90.0% fewer than 100 employees, and 96.6% fewer than 500 employees.
Self-employed in downward trend
Based on data from the US Bureau of Labor Statistics (Table A-9), the level of entrepreneurship in the US has declined, or at least stagnated, in recent years. Consider the data on the number of self-employed workers.
● Integrated self-employment decreased from 5.78 million in 2008 to 5.13 million in 2011.
● Up to 5.85 million in 2017.
Thus, the number of incorporated self-employed workers took almost nine years to return to the 2008 level. No growth followed in 2018. But increases in the following two years brought the number of incorporated self-employed workers to 6.28 million in 2020. However, the ills of the pandemic loomed in these data from the end of 2020. The number of self-employed workers fell to 6.12 million in 2021.
● The number of unincorporated self-employed workers fell from 10.59 million in 2006 to 9.36 million in 2014.
● Uneven growth resumed, with a level reaching 9.71 million in 2018. However, this was followed by sharp declines in 2019 and 2020. The 9.25 million level in 2020 was the lowest since 1983. However, it actually resumed in 2021, with the number of self-employed without legal personality reaching 9.96 million.
● As of July 2021, seasonally adjusted data on unincorporated self-employed workers hovered around the 10 million mark for the remainder of the year. The last time the 10 million level was reached was in March 2009.
Combined embedded and non-embedded data:
● The total number of self-employed (legal and non-legal persons) reached 16.15 million in 2007, but then decreased for five years, registering 14.72 million in 2013.
● Some growth resumed, with the total rising to 15.72 million in 2019 and then falling to 15.54 million in 2020. However, growth resumed in 2021, with the total count reaching 16.07 million, which was unfortunately still slightly below the recent high of 2007.
Of course, when considering the population increase since 2007, the stagnation of self-employment becomes a relative decline.
Small Business Survival Rate
According to the SBALaw Firm:
“From 1994 to 2019, an average of 67.6% of new employment establishments survived at least two years. During the same period, the five-year survival rate was 48.9%, the ten-year survival rate was 33.6%, and the fifteen-year survival rate was 25.7%.
About small business financing
• Start-up financing: “Start-ups make heavy use of personal wealth and traditional debt, with more than half using their own personal savings. Data from the Census Bureau shows that employers made greater use of finances than non-employers, but also continue to rely on personal savings. About 30% of non-employing startups and 7% of employing startups used no start-up capital.”
• Business expansion: “Existing companies use financing vehicles similar to those of new companies to finance expansion. Personal savings are the most common source of financing for expansion, followed by reinvestment of corporate profits.
Consult the law officeSmall Business Financing: Frequently Asked Questions
More details on small businesses
According to the SBALaw Firm:
Initial employment level: “In 2019, the average number of jobs in startups was 3.3 employees per establishment. The average employment in establishments of all ages was 15.3 employees”.
Self-employed by age:“According to Census Bureau data, the proportion of self-employed Americans (including incorporated and unincorporated) age 30 and younger increased slightly from 6.7% in 2013 to 7.4% in 2018. The proportion of self-employed people aged 65 or over increased from 14.0% to 16.3%.”
deductibles: "In 2017 there were around 500,000 franchised establishments with a total of 9.6 million employees."
family businesses: “About 29% of employers were family businesses in 2018. Family businesses employed 10 employees per business, while non-family businesses employed 8 employees per business.”
As of March 2021Articleby Barbara Weltman:
“According to the 2020 report of theNational Council of Women in Business (NWB)C)… Women-owned businesses make up 42% of all American businesses (about 13 million), have 9.4 million employees and $1.9 trillion in revenue. But nearly 90% of women-owned businesses had no employees. However, its revenue exceeded $229 billion.”
“Women owned 1.1 million employer companies in 2018, representing 20% of all employers. Women also owned 10.6 million non-employment businesses in 2017, or 42% of all non-employment businesses…”