Everyone agrees on a broad level that small businesses important to the American economy. But most people would be surprised to know how important. The United States leads Small Business Administration records and statistics on small businesses in the United States and some of their results are surprising.
First, the typical perception of a company as small mom and pop operations with few, if any, is a staff member not the whole picture. The Small Business Administration shall submit a small business as an independent company with fewer than 500 employees. There are an estimated 23 million businesses in the United States to attend to, that this classification. In some smaller cities in the United States, these companies an important source of employment.
In fact, small businesses are defined by the Small Business Administration 99th 7 percent of all employers in the country and employs half of all employees in the private sector. More than 45% of private sector payroll is produced by small companies. In the last ten small businesses created 60 to 80% of all new jobs on an annual basis accounting.
Although there are a large number of small businesses in the retail and service sector, small businesses make rapid progress in the technology sector. 41% of high-tech workers such as engineers, scientists and programmers employed by small businesses. Employees in small businesses produce 13 to 14 times more patents than those employed by larger companies.
The Small Business Administration also offers some interesting observations on small business survival. Two thirds of small businesses survive at least two years to fall to 44% after four years. Most of the factors to support a small business surviving are well known, such as access to capital and owner education. However, a lesser known factor in the survival of small businesses that the company is large enough to have employees.
Also obstacles to the creation of a small business include lack of access to start-up capital and lack of education. But start the number one obstacle for small business and a priority for the existing small business owners is access to private health insurance. Individual health insurance for individual entrepreneurs is much more expensive than receiving coverage through an employer. If a small business owner is able to offer health insurance for their employees, the administrative and premium costs are often much higher than those for larger companies.