Small Business Stats for Small Business Week 2011

This week marks the 48th Annual National Small Business Week (May 16-20) and with this post I hope to explore the state of Small Business in America through a few different mediums. Small businesses are considered the backbone of America and are what many financial analysts predict will be the vehicle to drive us out of this financial downturn. A few small business stats (according to the SBA) that stick out to me:

-       There are 27+ Million Small Businesses in the US.

-       Between 60% & 80% of all new jobs created in our country can be attributed to Small Business.

An amazing infographic by Intuit that explores the costs of starting a new small business in the United States compared to other markets around the world. The graphic shows that starting a business in the US is relatively easy compared to the largest markets in Asia and a few places in Europe. It also seems that the survival rate of businesses in the US is much larger than any other region in the study. These numbers should go a long way towards small business optimism in comparison to our direct international competitors.

Intuit's smb inforgraphic

This infographic takes a look at Small Businesses’ contributions to economic activity state-by-state:

 

Economist and Professor Scott Shane talks about his report on the state of Small Business and monthly ‘Optimism Reports:’ State of Small Business. Mr. Shane speaks to the doubts some entrepreneurs are having in small business. He provides evidence (though in a small sample area) such as 17% decrease in startups between 2007 and 2009 in the Cleveland, Ohio area to go along with a 11% increase in the number of small businesses that have closed shop during that time.

It seems obvious that while the numbers regarding Small Business are not sky-rocketing as most would hope, the future of our economy lies on Main Street America. In my opinion, most people who go into small business are aware of the risks to begin with, so some of the negatively portrayed numbers are to be taken with a grain of salt. As long as our Country’s Entrepreneurs and small business owners keep innovating, engaging, and planning for growth, we will be just fine.

In the meantime, check out some quick tips on how to better your Small Business from experts, Jennifer Hill and Inc Magazine’s Mike Hoffman in this MSNBC segment:

MSNBC Your Business

 

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  • Chris Morris

    I am always amazed at the impact small business has on the overall economy of this country!

    Many small businesses are born out of an entrepreneurial idea or spirit that is the driving force to get things rolling. However, anyone getting involved in a small business must also recognize and keep an eye on the more mundane requirements of running a business, such as payrolls, taxes, paying vendors, etc.

    It may be a good idea for a budding entrepreneur to be self-critical enough to be able to identify if they have the ability and interest to be able to pay attention to the important routine “stuff”. If not, they should be sure to have someone working with them that is capable and willing to do the “grunt” work.

  • http://www.peoplestring.com Brian Morris

    Chris,

    Great point. The aspect you bring up is definitely the less appealing, “unsexy” side of starting your own business. I agree that being self-critical could go a long way. Many times, it seems, the individual with the entrepreneurial attitude overlooks these details so it is definitely a good idea to have someone on your team that won’t miss these key points.

    We appreciate the insight!

    -Brian

    • Juliana Hess

      In line with both Brian and Chris’ comments. I am a corporate development and business strategy professional and have recently been asked by someone close to me to advise them on how to deal with strategic, operational, legal and tax issues they have encountered and help them navigate through the changes that need to be made.

      They have been small business owners their entire lives and at this point in time are running three different businesses under one umbrella but they stand lose it all if they don’t properly address all their needs (legal: right type of company S Corp, C Corp, LLC, etc, protection of intellectual property, contracts with employees, free lancers and partners, privacy laws, data protection laws, tax laws. etc), process optimization (must move away from Mom and Pop practices to a more professional way of running their company), etc.

      Like many other small business owners and start-up owners, they never once stopped to think about these “mundane”, day to day, “boring” issues a) because they didn’t know what they didn’t know and b) because who wants to think about those things when you are excited about getting a business off the grown and then growing that business?.

      Through this experience, I have come realized how much support small businesses and start-ups lack on this front and I can totally understand how and why many small business owners and entrepreneurs shy away from dealing with these things because it’s easier not to think about it, they don’t have the funds to think about it, and let’s face it, lawyers and all that “stuff” can be intimidating. I have seen how many attorneys and firms talk big talk and make themselves overwhelming and confusing, scary and expensive. Well, it doesn’t have to be! Having someone that understands them and can negotiate on your behalf is HUGE. It’s also important to know that you get what you pay for so be careful not to run and trust the legal issues of your company on the cheapest lawyers because that can come back and bite you.

      From an operations and process side, it’s also wise to get things right early on otherwise it can be more expensive to change your ways half way. Bringing someone who can take an objective standpoint and point out all the deficiencies and weaknesses that pose a threat to your business early on may be a good idea. Either find a business partner who can handle this (while keeping it objective) or bring someone just for that purpose on a short-contract basis. It doesn’t need to be expansive nor complicated. You may not be able to afford all changes and suggestions at once but you can at least start thinking about it, planning ahead and incorporating little by little.

      Coming from the corporate world, I had no idea how tough it was to start a business and I take my hat off for all of those entrepreneurs out there. It has been an incredible experience working with this company, their peers and their clients whom are all small businesses as well. It’s just too bad that it can be the mundane, boring day to day stuff that can, at the end of a long fought road, the reason for many of these business to fail. It shouldn’t have to be!

  • http://www.chistell.com Denise Turney

    Good article. Detailed and informative. Appreciate it.

  • Emmanuel Kesse

    Hello Brian, I am working on a project and would like to use parts of your graphic work on this page; citing you as the source. Is that ok?

    Thanks
    Emmanuel Kesse

    • http://www.peoplestring.com Brian Morris

      Hey Emmanuel,

      That is definitely ok. Thanks for stopping by and let us know where we can find your project when it’s done!

      Thanks,
      Brian

  • http://blujconcepts.net Jay Henderson

    Hey Brian, I just wanted to say that I too would like to ask if it’s okay to use parts of your graphic work on this page. I am working it into my presentation. The feedback in this is AMAZING!! And what helps incredibly is the state by state comparison, makes what I am working on that much more critical.

    Thank you
    Jay Henderson

  • Earl Smith

    Just two questions: What percentage of these U.S. small businesses reported revenue exceeding 250,000 last year? And what is the average percentage of such U.S. small businesses which have reported revenue exceeding 250,000 annually over the life of their business?

  • http://thecogentcoach.com Michael Nelson

    Thanks for the great information, I’m a big fan of infographics and your small business infographics are spot on!

    • http://blog.brand-yourself.com/author/jarmstrong/ Jim Armstrong

      Thanks Michael, we appreciate your words!

  • Brian Morris

    Hey Michael – Just to echo Jim’s words, thanks! We appreciate you taking time to check out the blog.

  • karan bishnoi

    69% survive at least 2 years
    44% survive at least 4 years
    51% survive at least 5 years
    31% survive at least 7 years

    This is what I’ve understood of the success rate time made above. If I’ve not misunderstood the language then could you please explain about the increase in the 5th year ?

  • Wayne Morgan

    Please clarify for me; at the top it states 27+M small businesses, then in the bar graph at the bottom is states “small business establishments 6.2M” and below that, “small business firms 5.9M” can you please tell me the diff between these these three categories?
    Thanks! Great article!

  • Tara Hooey

    The 27+ small businesses is a miscount. It’s easy to do if you’re not paying attention to the SBA spreadsheet that contains the information. If you highlight all the cells that simply look like it counts the amount of firms per range of employees, it will probably add up to 22-27+ firms depending on the year. However, some of those cells are subtotals, so you end up counting the firms 2-3 times. The number of total firms in 2010 was 5+ mill and total “establishments” was 7+ mill. If you totaled the number of firms or establishments with less than 20 employees, it usually (over the past few years) ranges between 75-90% of total businesses. If you count businesses with less than 500 employees, it jumps to 85-99%.