18 Amazing Facts About Small Businesses In America

Liliha Bakery, Hawaii

Photo: Ryan Ozawa via flickr

Every major company was once a small business. Consider the garage days for the founders of Microsoft and Apple.”You need a lot of passion for what you’re doing because it’s so hard,” Steve Jobs once said. “Without passion, any rational person would give up.”

After all, bootstrapping a startup is one of the quintessential elements of the American dream.

A small business is defined broadly — as a company with 500 or fewer employees, but it varies by industry; the Small Business Association breaks it down here.

Chances are you — and most people you know — work for one.

There are 28 million small businesses in the U.S. -- which outnumber corporations 1162 to 1

70% of small businesses are owned and operated by a single person

Small businesses employ 57% of the country's private workforce

Small businesses pay 44% of U.S. payroll

Northwestern states like Montana & Wyoming rely more heavily on small businesses

Source: Fee Fighters

The 77 million people that make up the US small business workforce would rank as the 17th most populous country in the world, just ahead of Iran

It takes just 6 days to start a business in the US, compared to a whopping 38 days in China

Here's how long it takes in some other countries around the world:

New Zealand -- 1 day
Singapore -- 3 days
Saudi Arabia -- 5 days
US -- 6 days
UK & Ireland -- 13 days
India -- 30 days
China -- 38 days

Source: Get Busy Media

And it costs 6x as much to start a business in India than in the US

Only 50% of businesses survive five years -- though most (70%) hit the two-year mark

Immigrants make up 12.5% of small business owners nationwide

If a small business can't resume operations within 10 days following a natural disaster, it probably won't survive

Source: Bolt

Small businesses create 13x more patents per employee than large patenting companies

A small business went bankrupt every 8 minutes in 2009

Small business bankruptcies 2005-2009:

2009 -- 60,837
2008 -- 43,546
2007 -- 28,332
2006 -- 19,696
2005 -- 39,201

Source: United States Small Business Association Office of Advocacy

Small business bankruptcies (in red) peaked in '09, but are now lower than consumer bankruptcies (grey) on the Equifax index

Source: Equifax

One third of small businesses rely on credit for financing

This figure used to be closer to 50% of small businesses. The number declined in this past year, as 'credit cards have dropped from first to third place on the list of most commonly-used sources of small business financing,' according to the Los Angeles Times.

This likely has to do with the recent credit card legislation; as well as a different economic landscape where businesses are more cautious about financing from credit cards.

Only 2% of small businesses are franchises -- most (54%) are home-based

60 to 80% of all new jobs come from small businesses

'This number fluctuates when some small businesses grow enough to become classified as large businesses, and when new small businesses are created. From 1999 to 2000, small businesses accounted for 75 per cent of all new jobs created. By 2010, small businesses account for three quarters of net new jobs in the United States.'

Source: U.S. Small Business Administration

In New York City, immigrants make up 46% of the incorporated self-employed

Source: U.S. Census Bureau, American Community Survey

If you decide to launch a business, you could be one of the lucky few ...

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