Small Business Statistics

In 2005, there were approximately 25.8 million businesses in the United States. Census data show that there were 5.8 million firms with employees and 18.6 million without employees in the most recent data. Applying the sole proprietorship growth rates to the non-employer figures and similar Department of Labor growth rates to the employer figures produces the 25.8 million figure. Small firms with fewer than 500 employees represent 99.9 percent of the 25.8 million businesses (including both employers and non-employers), as the most recent data show there are nearly 17,000 large businesses.

Do you have a great business plan? Contact a Loan Profession to make your business dreams come true!

Small Firms Statistics:

• Represent 99.7 percent of all employer firms.
• Employ half of all private sector employees.
• Pay more than 45 percent of total U.S. private payroll.
• Have generated 60 to 80 percent of net new jobs annually over the last decade.
• Create more than 50 percent of non-farm private gross domestic product (GDP).
• Supplied more than 23 percent of the total value of federal prime contracts in FY 2005.
• Produce 13 to 14 times more patents per employee than large patenting firms. 
• Are employers of 41 percent of high tech workers (such as scientists, engineers, and computer workers).
• Are 53 percent home-based and 3 percent franchises.
• Made up 97 percent of all identified exporters and produced 28.6 percent of the known export value in FY 2004.

Two-thirds of new employer establishments survive at least two years, and 44 percent survive at least four years, according to a recent study. These results were similar for different industries. Despite conventional wisdom that restaurants fail much more frequently than firms in other industries, leisure and hospitality establishments, which include restaurants, survived at rates only slightly below the average.

Commercial lenders are the largest suppliers of debt capital to small firms, supplying more than 80 percent of lending in the credit line market and, with the exception in leasing, more than 50 percent in other markets, such as commercial mortgages and vehicle, equipment, and other loans. In June 2004, small business loans outstanding owed to commercial lenders amounted to $522 billion. Very large banks with assets of at least $10 billion are making a significant percentage of small loans of less than $100,000.

Over the past decade, small business net job creation fluctuated between 60 and 80 percent. In the most recent year with data, employer firms with fewer than 500 employees created 1,990,326 net new jobs, whereas large firms with 500 or more employees shed 994,667 net jobs.

How many businesses open and close each year?
Estimates for businesses with employees indicate there were 671,800 new firms and 544,800 closures (both about 10 percent of the total) in 2005.

Do you have a great business plan? Contact a Loan Profession to make your business dreams come true!