What is a small business?
The Small Business Administration’s Office of Advocacy defines a small business as an independent business having fewer than 500 employees. The definition of "small business" used in government programs and contracting varies by industry (www.sba.gov/size).
How important are small businesses to the U.S. economy? Small firms:
- Represent 99.7 percent of all employer firm
- Employ half of all private sector employees.
- Pay 44 percent of total U.S. private payroll.
- Generated 65 percent of net new jobs over the past 17 years.
- Create more than half of the nonfarm private GDP.
- Hire 43 percent of high tech workers (scientists, engineers, computer programmers, and others).
- Are 52 percent home-based and 2 percent franchises.
- Made up 97.5 percent of all identified exporters and produced 31 percent of export value in FY 2008.
Source: U.S. Dept. of Commerce, Census Bureau and Intl. Trade Admin.;
Advocacy-funded research by Kathryn Kobe, 2007
(www.sba.gov/advo/research/rs299.pdf) and CHI Research, 2003
(www.sba.gov/advo/research/rs225.pdf);U.S. Dept. of Labor, Bureau of Labor Statistics