There are lots of reasons to care about National Small Business Week
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This week marks the 51st annual National Small Business Week (May 12-16) in the U.S. But who really cares, right? If you're a small business owner, you don't have time to think about stuff like that.
Maybe it's a good time, however, to revisit, just how crucial a role small business plays in the U.S. economy. Despite the rise of mega-retailers and giant conglomerates small businesses are an important source of job creation and healthy economic growth. Need proof? Here are some thought-provoking statistics that prove small businesses are mighty, despite their size:
Small businesses are big employers
As Forbes reports, about 120 million people in the U.S. are employed by small businesses. That's more than half the country's working population! And one Small Business Administration (SBA) report found that, between 2009 and 2011, small businesses were responsible for 67 percent of all new jobs created in the United States
Moreover, the SBA report also found that small businesses make up 99.7 percent of all employers in the U.S. and account for 42.9 percent of private-sector payroll. [10 Entrepreneurs Share What They Wish They'd Known Before Starting a Business]
The number of small businesses is on the rise
Approximately 543,000 new small businesses are founded in the U.S. each month, Forbes reports. And research from the U.S. Bureau of Labor Statistics suggests that, despite the recession, small businesses are staying alive just as long as they did before the economy took a nosedive.
About half of all new businesses started each year survive for five years or more. About one-third of those businesses survive for 10 years or more.
Small business is hip
Far from being relics of the past, small businesses are typically very in tune with the latest trends. As Get Busy Media reports, small businesses are often early adopters of mobile technologies and have jumped headfirst into trends like social media marketing, crowdsourcing and the hiring of remote employees.
And small business owners are even willing to keep things modern when it comes to financing their ventures. In 2013, startups and entrepreneurs raised more than $2.7 billion to get businesses and products off the ground via crowdfunding sites like Kickstarter and Indiegogo.
Even the smallest of small businesses has big potential
The SBA defines a small business, with a few exceptions, as "an independent business having fewer than 500 employees." But much of the growth in the small business sector is fueled by businesses that have far fewer than 500 employees. In fact, many small businesses have no more than four employees.
A 2013 report from the California Association for Micro Enterprise Opportunity found that micro businesses — small businesses with between one and four employees — created a net of 5.5 million jobs between 2004 and 2010 alone. In total, these micro businesses employ more than 31 million people in the U.S.
The report also found that micro businesses account for 17 percent of total nonfarm gross domestic product (GDP) in the U.S. SBA research has found that small businesses in general are responsible for creating about 50 percent of the total GDP.
Small businesses can be more innovative than big businesses
The SBA found that, of "high patenting firms" (firms that churn out 15 or more patents in a four-year period), small businesses produced 16 times more patents per employee than large firms.
The SBA report also found that while larger companies may generate more sales than their smaller counterparts, these sales numbers don't correspond with an increased ability to innovate. Increases in the number of workers a firm employed, on the other hand, were found to directly correlate with a rise in the development of new products and services.
Small businesses provide big opportunities for all demographics
A 2012 SBA report found that, of the more than 27 million small businesses currently in operation in the U.S., approximately 7.8 million of them were owned and operated by women. More than 4.5 million small businesses are owned equally by men and women.
About 2.3 million small business in the U.S. are owned by Hispanic Americans, and 1.9 small businesses are owned by African Americans. Approximately 1.6 million small business owners are Asian Americans, and about 300,000 small businesses are owned by Native Americans. About 3.7 million small businesses in the U.S. are owned by veterans.
Originally published on Business News Daily.