PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Important Reminder: This is a Small Business Economy

By at 20 March, 2020, 11:25 am

by Raymond J. Keating-

In order to limit the coronavirus, government effectively has shut down significant chunks of the U.S. economy. And as the economic effects and assorted policies are discussed and debated, it pays to keep in mind that the U.S. very much is a small business economy.

The latest data on the number of U.S. employers was released earlier this month. Unfortunately, the data is for 2017 (that’s the latest we have), but the numbers still offer valuable information and make clear our small business reality. Consider several points:

● First, when you combine the employer data with nonemployer (a one-person business, i.e., a business owner with no paid employees) numbers, and the total number of U.S. businesses came in at 31,698,571.

● Second, among those 31.7 million businesses, only 20,139 had more than 500 employees. That compared to 31,678,432 small and medium-size businesses with less than 500 employees. That means 99.9 percent of U.S. businesses ranked as small and medium-size enterprises.

● Third, focusing only on the 5,996,900 employer firms, 78.5 percent had fewer than 10 employees; 89.0 percent fewer than 20 employees; 98.1 percent fewer than 100 employees; and 99.7 percent fewer than 500 workers.

● Fourth, when factoring in nonemployer businesses, 95.9 percent of all businesses had fewer than 10 employees; 97.9 percent fewer than 20 employees; 99.6 percent fewer than 100 employees; and, again, 99.9 percent fewer than 500 workers.

● Fifth, industry after industry proves to be overwhelmingly about smaller businesses. Just consider manufacturing. Among the 248,039 employer manufacturing firms, 59.7 percent had fewer than 10 employees; 74.8 percent fewer than 20 employees; 93.4 percent fewer than 100 employees; and 98.4 percent fewer than 500 workers. It turns out that only 3,941 out of 248,039 manufacturers in the U.S. had more than 500 workers.

This data breakdown, again, serves as important information about the reality of the U.S. economy being a small business economy.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

 

News and Media Releases