If there was ever any question about how important small businesses are to America, U.S. Census Bureau figures clarify it.
American companies are overwhelmingly small business, with 9 out of 10 American businesses employing fewer than 20 workers.
If the number of owner-operated businesses that don’t have employees is added to the total, businesses with fewer than 20 employees increases to nearly 98 percent.
Overall, small businesses employ about 18 percent of the nation’s workforce – and accounted for 65 percent of new job creation during a 15-year period previous to 2008, according to the Small Business Administration. Small businesses also produce about 46 percent of private, nonfarm GNP.
In its survey of business owners released in 2011, the Census Bureau found that 28 percent of companies were family-owned, and that these family-owned businesses accounted for 42 percent of all company receipts.
In addition, the survey found:
- Nearly 24 percent of small businesses with employees operated out of a home.
- About 63 percent of non-employer businesses were home-based.
- More than half of business owners had a college degree.
- Nearly 14 percent were foreign born.
The Census Bureau study reported that the survival rates of small businesses were similar across states and industries. Of new establishments begun in 2000, 69 percent survived for two years and half survived for five years.
The Bureau of Labor statistics had similar figures for the five-year survival rate and found that 34 percent of businesses survive for at least 10 years and 26 percent survive 15 years or more.
In its 2012 report, the Small Business Administration’s Office of Advocacy found that small businesses are more often leaders of innovation.
“Small firms are much more likely to develop emerging technologies than are large firms,” the report said. “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.”