SMALL BUSINESS INVESTING

THE BASICS

What impact does small business have on the U.S. economy?

Small business, defined as all companies employing fewer than 500 people, accounts for 88.7% of all firms that employ people, according to researchers at the Small Business Administration (SBA). In addition, small business employers account for approximately 64% of net new private sector jobs, 49.2% of all private sector employment, 42.9% of private sector payroll, 46% of private sector output, 43% of all high-tech employment, 98% of all exporters, and more than a third of the value of all exports.

How many small businesses exist in the United States?

As of 2010, approximately 27.9 million small businesses existed in America, compared with 18,500 firms employing more than 500 people. But according to SBA researchers, over 75% of all small companies have no employees, a statistic that has been trending upwards for a decade.

What percentage of small businesses are home-based businesses?

Fifty-two percent of small businesses are home-based businesses. This may illuminate a trend, as technological innovations make it possible for more individuals to create and manage businesses from the comfort of their own homes.

How successfully do small businesses create jobs?

Between 1993 and 2011, SBA researchers found that small businesses created 64% of new jobs. More importantly, since the recession in mid-2009, small businesses created 67% of all new jobs.

What effect do the unemployed have on the self-employed?

Unemployed people have had a great effect on the self-employed. Instead of seeking similar work after losing a job, many people launch a new business. The trend for this dynamic has increased for many years. In 2001, 3.1% of unemployed people became self-employed; in 2006, 3.6% became self-employed; in 2011, 5.5% became self-employed.

Of all small businesses in the United States, how many are owned by women and various minorities?

As of 2007, women owned approximately 7.8% of all small businesses in the United States, and minorities owned approximately 6.1%.

What is the most widely used legal form of corporate organization for firms that employ people?

The most widely used legal form of corporate organization for firms that employ people are subchapter S corporations, which account for 44% of all small businesses. This is followed by 22% of businesses that are organized as С corporations, and 18% of corporations that are organized as sole proprietorships.

Even today, women only own less than eight percent of all small businesses in the United States.

What is the effective tax rate for a small business?

The effective tax rate for a small business is the amount of tax paid divided by the amount of income made in any tax year. For example, a company that paid $45,000 in taxes on $180,000 in net profits would have an effective tax rate of 25%.