In case you were wondering whether small business impacts the economy, just take a look at this. The small business marketplace changes rapidly. The information included on this page represents the most current information. When discussing a “small business,” this site uses the definitions provided by the U.S. Small Business Administration’s Office of Advocacy.
Small Business Effects on the Economy
The estimated 23.7 million small businesses in the United States:
- Have generated 60 to 80 percent of net new jobs annually over the last decade
- Employ 50 percent of the country’s private workforce
- Represent more than 97 percent of all the exporters of goods
- Represent more than 99.7 percent of all employers
- Generate a majority of the innovations that come from United States companies
- Account for more than 40 percent of the offline economy of the United States (IDC, January, 2001)
Source: U.S. Small Business Administration, June 2004, unless noted otherwise.
Small Business Survival Rates
Small Business Openings & Closings:
- There were 572,900 new businesses, and 554,800 business closures (Note 1).
- Two-thirds of new employer firms survive at least two years, and about half survive at least four.
Source: U.S. Small Business Administration, June 2004. Note 1: Not all closures were due to bankruptcies.
Trends in the Marketplace
Small Business Internet Trends:
- Currently, 84 percent of small businesses have PCs; 57 percent have Internet access; 21 percent have Web sites. (Source: AMI International, May 2000)
- 66 percent of all small businesses report having Internet access. (Source: Dun and Bradstreet, August 2001)
- By the end of 2002, 85 percent of all small businesses will be conducting business over the Internet. (Source: U.S. Small Business Administration, June, 2000)
- The average annual income of a small business that utilizes the Internet is $3 million per year. The average for small businesses in general is $1.9 million. (Source: IDC, April, 2000)
- Women own more than 9.1 million businesses and minorities own more than three million. The number of businesses owned by each of these groups is increasing at a rate that far exceeds the industry average. (Source: Dun and Bradstreet, 2001)