America runs on the backs of small business. Politicians have been saying this for years, but it wasn’t until the last recession that Americans realized just how important they are. Thankfully the Small Business Administration (SBA) indicates that the small business economy is growing as the recession cools. Despite slower growth than other sectors, due in large part to lending challenges, the impact that the economic rebound has made on the small business sector is profound and is creating brand new opportunities for entrepreneurs. The following are a few facts about small business in America.
Strong Employer
Small businesses have a profound impact on the country. Since 1995, small businesses have created about 64 percent of net new jobs in the U.S. This accounts for 42.9 percent of payroll dollars in the U.S. Small business also generates income tax dollars into the government’s budget. In addition, small businesses stimulate a ton of consumer spending in America. While only 21.5 percent of all small businesses are employers, about half of America’s private sector workforce (49.2 percent) is working for one.
Leader in Innovation
Small businesses employ over 120 million Americans, and they also lead the way in new product and technology development. A study conducted by the Small Business Administration shows that small businesses have over 16 times more patents per employee than large patenting firms.
Small Businesses Promote Diversity
Small businesses are starting to reflect America’s diversity. In 2012, 14.6 percent of small business owners were minorities. In 2012 there were 2.3 million Hispanic-American-owned businesses, 1.9 million owners were African-American, and 1.6 million small business owners were Asian. These minority ownership figures are 3 percent higher than reported in 2007.
The 2012 report also showed an increase in businesses owned by women. At the time of the report, 36 percent of women were business owners, and 9 percent of small business owners were veterans. Although there is still a lot of progress to be made in this area, the increasing number of minority small business owners is still encouraging.
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