Small Business Trends

There are 27.3 million small businesses. These 27 million small businesses pay 43% of total US private payroll, generate half of America’s GDP, and are responsible for 97.5% of all identified exporters with 31% of export value as reported by the SBA Office of Advocacy. It is equally inconceivable that 52% of these businesses are home-based.

Small business is America’s economic backbone—producing $6 trillion worth of annual products and services and employing half of the American private sector work force. Moreover, it is small business, not big business, which is the foundation of job creation. Just as important small businesses do not export jobs like big businesses.

Since the beginning of this decade, small business generated 95% of all new American jobs. As far as innovation, the Small Business Administration (SBA) reports that small business produce 16.5 times more patents per employee than large firms.

Of the 3,325,000 private sector jobs created in the 3 months of 2012 per the ADP National Employment Report, 95.0% of all new jobs were produced by small businesses with less than 500 employees. Large businesses produced only 5.0% of all new jobs. Very small business with less than 50 employees accounted for 46.7% of new jobs.

According to a recent Kauffman Foundation Study, job growth in the US is driven entirely by startups. The study reveals that, both on average and for all but seven years between 1977 and 2005, existing firms are net job destroyers, losing one million jobs net combined per year. By contrast, in their first year, new firms add an average of three million jobs.

A recent landmark Census Bureau study showed that small establishments are no more inclined to exit business than large businesses. This misperception exists because of the high exit rate of micro-firms (1-4 employees), which averaged 18.4% over the last three decades. While this rate was high, their entry rate was even higher at 21.3%, therefore producing a net gain of 2.9% over the period.

Trends and stats provided by Ira S Wolfe, President of Success Performance Solutions ( More small business and workforce trends available at

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