Small Biz Stats & Trends

The estimated 25.8 million small businesses in the United States:

• Have generated 60 to 80 percent of net new jobs annually over the last decade

• Employ 50.6 percent of the country’s private sector workforce

• Represent 97 percent of all the exporters of goods

• Represent 99.7 percent of all employer firms 

• Generate a majority of the innovations that come from United States companies

Source: U.S. Small Business Administration, June 2006.

Small Business Openings & Closings:

• There were 671,800 new businesses, and 544,800*business closures. 

• Two-thirds of new employer firms survive at least two years, and about 44% survive at least four.

• Findings do not differ greatly across industry sectors.

*Not all closures were due to bankruptcies.
Sources: U.S. Small Business Administration, June 2006.
Survival and Longevity in the Business Employment Dynamics Database, Monthly Labor Review, May 2005. Redefining Business Success: Distinguishing Between Closure and Failure, Small Business Economics, August 2003.

General Trends

• The number of self-employed workers in June 2005 fell 3.1 percent or 303,000 from the month before, Labor Department data showed. Self employment tends to fall as the economy grows. That's especially true among laid-off workers who start tiny companies after failing to find work in slow times. (Source: USA Today, July 17, 2005)

• During 1979-2003, self-employment increased: 33 percent for women; 37 percent for African Americans, 15 percent for Latinos, 10 for White Americans and 2.5 percent for men. (Source: SBA, Office of Advocacy)

• Where do small business owners go for advice? 52 percent from individual mentors; 51 percent from social networks; 44 percent from trade associations; 36 percent from business advisors; 31 percent from the Internet and 27 percent from Chambers of Commerce (Source: American Express)

Women in Business

• Women represent more than 1/3 of all people involved in entrepreneurial activity. (Source: Global Entrepreneurship Monitor (GEM) 2005 Report on Women and Entrepreneurship)

• Between 1997 and 2002, women-owned firms grew by 19.8 percent while all U.S. firms grew by seven percent (Source: SBA, Office of Advocacy)

• Women-owned firms accounted for 6.5 percent of total employment in U.S. firms in 2002 and 4.2 percent of total receipts. (Source: SBA, Office of Advocacy)

• The number of women-owned firms continues to grow at twice the rate of all U.S. firms (23 percent vs. 9 percent). There are an estimated 10 million women-owned, privately-held U.S. businesses. The greatest challenge for women-owned firms is access to capital, credit and equity. Women start businesses on both lifestyle and financial reasons. Many run businesses from home to keep overhead low. (Source: SBA, Office of Advocacy and Business Times, April 2005)

• Women are more likely to seek business advice—69 percent women vs. 47 percent men. (Source: American Express)

Minority-Owned Businesses

• Black-owned businesses are the fastest growing segment, up 45 percent between 1997-2002. Revenues generated by the nation's 1.2 million black-owned businesses rose 25 percent between 1997 and 2002 to $88.8 billion in 2002. (Source: U.S. Census Bureau)

• The number of U.S. businesses with Hispanic owners grew at three times the national average from 1997 to 2002 to 1.6 million businesses in 2002, a 31 percent increase from five years earlier. (Source: MSNBC)

Seniors in Business

• Entrepreneurship among seniors is growing. In 2002, the rate of self-employment for the workforce was 10.2 percent (13.8 million workers), but the rate for workers aged 50 was 16.4 percent (5.6 million workers). Although those age 50 made up 25 percent of the workforce, they comprised 40 of the self-employed. Solo business formation in the future will be driven by people who take early retirement or whose jobs just disappear. (Source: AARP/Rand Corp. "Self-employment and the 50 Population")

Veterans in Business

• In 2004, about 22 percent of veterans in the US household population were either purchasing or starting a new business or considering purchasing or starting a business and nearly 72 percent of veteran entrepreneurs planned to employ at least one person at the start of their venture (Source: US Census Bureau)

Hot markets for small businesses:

• eBay drop-off sites

• Search engine optimization and Internet marketing

• Performance apparel

• Niche health and fitness

• Technology security consulting

• Services/products for Hispanic-market

(Source: Entrepreneur magazine, "Newest Trends & Hottest Markets," January 2005)

eBay Trends

National Dialogue on Entrepreneurship

Pew Internet and American Life Project

Small Business Administration Office of Advocacy

Small Business Computing

Small Business Trends Blog

Business Opportunities Weblog

Subscribe to SCORE’s free eNewsletters to receive information on the latest small business trends and resources.