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The Importance of Small Businesses

We're grateful to Entrepreneur magazine for sharing a collection of data about the role of small business in the U.S. economy. The following statistics offer an impressive view of the importance of small businesses.

Just the facts
Businesses with fewer than 100 employees
- represent more than 99.7% of all employers
- employ more than half of all private sector workers (54.9 million**)
- account for 39% of high-tech jobs
- create 60% - 80% of the net new jobs annually
- account for 52.6% of all retail sales**
- represent 89% of U.S. exporters

Source:
SBA, Small Business by the Numbers, April 2003
** SBA, Small Business Economic Indicators for 2002, June 2003



How big is small?
Breakdown of U.S. small businesses (<100 employees) by number of employees:

Total small businesses: 7.9 million

55.9%:  one to four employees
20.8%:  five to nine employees
12.7%:  ten - 19 employees
7.8%:   20 - 49 employees
2.8%:   50-99 employees

Source:
IDC, Small Business Forecast, 2002



Best climates
States with the highest rate of small business growth (includes only businesses with employees)

Florida                 5.3%
California            3.7%
Utah                   3.5%
Massachusetts    2.3%
Nevada               2.2%
North Carolina    1.8%
Virginia               1.7%
Colorado            1.7%
Arkansas            1.5%
Montana            1.4%

Source:
SBA, Small Business Economic Indicators for 2002, June 2003



There's no place like home
• 13.2 million U.S. home-based businesses generated income in 2003

• 9.3 million accounted for their owners' primary income

• The typical home-based business has 1.8 employees

69.3% of home-based businesses buy online
27.3% of home-based businesses have a Web site
15.8% of home-based businesses sell online

Source:
IDC, SOHO Market Overview 2002: Small Businesses with under 10 employees and home-based businesses


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