Measure Your Economy: Establishments by Type, Size, and Activity

If your feet are wet in any realm of community and economic development, you probably already understand the importance of small business employment as a measure of economic vitality.[1] If not, here’s an overview of small businesses and their impact across the country, as outlined by the U.S. Small Businesses Administration’s (SBA) 2018 Small Business Profile:[2]

  • The 30.2 million small businesses in the U.S. employ a total of 58.9 million workers. This is about 48% of the private workforce.
  • These 30.2 million small businesses account for 99.9% of all businesses.
  • Service industries account for 8.6 million small businesses, or 28.4% of all small businesses.
  • Small businesses created 1.9 million new jobs accounting for approximately 70% of all new jobs.
  • 1.1 million of those small business jobs were created by businesses with fewer than 20 employees, about 60% of all small business jobs.

It’s clear - small business employment is a mainstay of the Nation’s economy. But how can you drill down and measure small business employment in your region? We regularly recommend tracking metrics that are tied to your organization’s goals, and measuring small business employment ranks high on a range of initiatives such as BR&E (business retention & expansion) or the effectiveness of small business development programs localized to your region.

Enter a free, robust data source: YourEconomy.org (YE). YE provides information at the state, metro, and county level going back to 2003 through 2018. Created and maintained by University of Wisconsin’s Institute for Business & Entrepreneurship, the easy-to-use web interface is based on the Your-Economy Time Series, a database used by analysts and academics to follow company growth on all establishments, including their jobs and sales, across the U.S.[3]

Your Economy With this data a user can understand the proportion and number of businesses by stages, be it a self-employed business (1 employee), stage one businesses (2-9 employees), stage two businesses (10-99 employees), stage three businesses (100-499 employees), or stage four businesses (500+ employees). The user can also see the breakdown of sales by business stage and jobs change by business stage (between any two comparison years). In addition, ranking tables are provided allowing the user to see how their geography matches up against other states, metro areas, or counties.

This data will help you indicate how businesses are growing, which are hiring the most people, and what sales they are generating in your area. They can help you understand how small business employment has changed over time, and what size businesses may be important to target as part of a suite of economic development attraction initiatives.

While tracking metrics requires time, it helps quantify the effectiveness of the changes you wish to see in your community. We hope you can utilize this great resource!

 

 

[1] The definition of a “small businesses” varies depending on the industry, funding source, and organization providing support and can range from one employee to 1,500. The U.S. Small Business Administration (SBA) generally defines small businesses as those with fewer than 500 employees.

[2] https://www.sba.gov/sites/default/files/advocacy/2018-Small-Business-Pro...

[3] https://wisconsinbdrc.org/data/

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