The small business marketplace changes rapidly. Small Business Stats reflects the current and future movement of the economy. The information included on this page represents the most current information. When discussing a “small business,” this site uses the definitions provided by the U.S. Small Business Administration's Office of Advocacy.
Small Business Affects on the Economy
The estimated 22.9 million small businesses in the United States:
Create 75 percent of the new jobs
Employ 51 percent of the country’s private workforce
Represent more than 96 percent of all the exporters of goods
Represent more than 99 percent of all employers
Generate a majority of the innovations that come from United States companies
Account for more than 40 percent of the offline economy of the United States (IDC, January, 2003)
Source: U.S. Small Business Administration, April 2003, unless noted otherwise.
New Small Business Statistics from the Federal Government (December, 2003)
The President's Plan to Strengthen Small Businesses
Small businesses represent more than 99 percent of all employers, and employ more than half the private work force. Small business entrepreneurs create more than two out of every three new jobs and generate about 50 percent of the nation's gross domestic product.
Nearly 40 percent of small businesses are owned by women. Close to 15 percent of America's small business owners are minorities – and the trend of minority ownership is accelerating. More than three million minority-owned small businesses are providing job opportunities for millions of Americans in thousands of communities across America.
The President is committed to creating an environment where small businesses can flourish. Under the President's economic plan, entrepreneurs will be able to devote more resources to developing products, growing businesses, and hiring more employees.
A cornerstone of the President's plan -- accelerating tax reductions that were enacted in the 2001 tax act -- would provide small business owners with much needed assistance. Two thirds of taxpayers who pay the highest marginal tax rates are small business owners who include their profits when they file their individual tax returns. All together, under the President's jobs and growth plan, 23 million small business owners would receive tax cuts averaging $2,042 this year.
The President's plan would increase the amount of money small business owners can deduct from their taxes for investment in new equipment, such as machinery and computers. Right now, the maximum deduction is $25,000. The President's plan would triple that to $75,000 beginning in 2003, and adjust it for inflation thereafter.
The President's plan to abolish the double tax on dividends will help businesses to grow and create jobs by reducing the cost of capital. Most dividends received by shareholders will be tax free. Small businesses that retain corporate earnings will not face capital gains taxes on the increase in the value of the firm from retained earnings that could have been distributed as dividends. This will benefit the owners of 4.1 million small businesses with less than $500,000 in assets, as well as the shareholders of all 4.9 million C corporations.
The President has also proposed making permanent the elimination of the death tax, which will provide certainty for families that want to transfer their family-owned small businesses, farms, and ranches from one generation to the next.
The President will also continue to work to streamline small business regulations and to call on Congress to enact legal reform to curtail the frivolous lawsuits that impose unfair costs on small businesses and their customers.
Additional Small Business Stats
2000 Small Business Survival Rates
Small Business Openings & Closings:
There were 550,100 new businesses, and 584,500*business closures.
10.7 percent of all employer firms were new and 9.7 percent closed. *
Source: U.S. Small Business Administration, April 2003.
*Not all closures were due to bankruptcies. 57.4 percent of all closures were successful at the time of closure.
Trends in the Marketplace
Small Business Internet Trends:
Currently, 84 percent of small businesses have PCs; 57 percent have Internet access; 21 percent have Web sites. (Source: AMI International, May 2003)
66 percent of all small businesses report having Internet access. (Source: Dun and Bradstreet, August 2002)
By the end of 2003, 85 percent of all small businesses will be conducting business over the Internet. (Source: U.S. Small Business Administration, June, 2003)
The average annual income of a small business that utilizes the Internet is $3 million per year. The average for small businesses in general is $1.9 million. (Source: IDC, April, 2003)
Women own more than 9.1 million businesses and minorities own more than three million. The number of businesses owned by each of these groups is increasing at a rate that far exceeds the industry average. (Source: Dun and Bradstreet, 2002)
2000 Small Business Survival Rates
Small Business Openings & Closings:
There were 550,100 new businesses, and 584,500*business closures.
10.7 percent of all employer firms were new and 9.7 percent closed. *
Source: U.S. Small Business Administration, April 2003.
*Not all closures were due to bankruptcies. 57.4 percent of all closures were successful at the time of closure.
