The US Small Business Administration Office of Advocacy provided a reflection of the top 10 most frequently asked questions of 2019. In a recent newsletter, they reviewed the current economic climate that makes today one of the best times to start a new business.
Each year the SBA presents a list of the top 10 FAQ’s.
- What is a small business? The Office of Advocacy defines a small business as an independent business with less than 500 employees. Size standards for government certifications are defined differently for each industry, see the SBA size standards table.
- How many small businesses are there in the U.S.? By the most recent count, there were 30.7 million small businesses.
- What is the role of small businesses in the economy? They comprise 99.9% of all firms and 99.7% of all firms with paid employees.
- What percent of net new jobs do small businesses create? From 2000 to 2018, small businesses created 9.6 million net new jobs while large businesses created 5.2 million.
- How can small businesses generate two-thirds of net new jobs, but their share of employment is less than 50%? As firms grow, they change employment size classes, if they pass the 500-employee mark, their employment gains are classified as large firm employment.
- What is the new business survival rate? Four out of five establishments that started in 2017 survived until 2018 (79.4%).
- How many small businesses open and close each year? In 2016, there were about 433,000 startups and 400,000 firm closures. The share of businesses that were startups has hovered around 8% since 2010.
- How many businesses do minorities own? At he last count in 2012, 8 million businesses were minority-owned, or 29.3% of U.S. firms.
- How many businesses do veterans own? In 2012, veterans owned 2.5 million businesses, or 9.3% of U.S. firms.
- How many businesses do women own? In 2012, there were 9.9 million women-owned firms, and 2.5 million firms owned equally by men and women. This means that 12.3 million firms, or 45% of all classifiable firms, were at least 50% women-owned.