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Small Business Continues To Drive U.S. Economy

Newly Released FAQ Updates Small Business Statistics

WASHINGTON, D.C. –America’s small businesses continue to drive the U.S.
economy, according to the updated 2005 Small Business FAQ,
(http://www.sba.gov/advo/stats/sbfaq.pdf) released today by the Office of Advocacy at the U.S. Small Business Administration. The updated FAQ compiles the most recent and important small business statistics in a useful and easily understood document.

“The 2005 Small Business FAQ is a great resource for small business people, policymakers, and anyone interested in how small business drives our economy,” said Dr. Chad Moutray, Chief Economist for the Office of Advocacy. He added, “These statistics paint a compelling picture of just how important small business is to America. They show that small businesses are America’s job-creators, innovators, and the path to mainstream economic activity for all segments of our society.”

Small business statistics highlighted in the 2005 Small Business FAQ
include:

* Small businesses represent 99.7 percent of all employer firms.

* Over the past decade, small business net job creation fluctuated between 60 and 80 percent.

* Small businesses generate more than 50 percent of the nonfarm private gross domestic product (GDP).

* Two-thirds of new employer establishments survive at least two years after start-up, and 44 percent survive at least four years.

* Small businesses employ half of all private sector employees.

* Very small firms with fewer than 20 employees spend 45 percent more per employee than the largest firms to comply with federal regulations.

* Minorities own 4.1 million firms that generate $694.1 billion in revenues and employ 4.8 million workers.

* Women own 6.5 million businesses that generate $950.6 billion in revenues, and employ 7.2 million workers.

* In 2004, an estimated 580,900 employer firms opened while an estimated 576,200 closed.

The Office of Advocacy, the “small business watchdog” of the government, examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats and it funds research into small business issues.