Business Facts and Information

What is a small business?

The Small Business Administration’s Office of Advocacy defines a small business as an independent business having fewer than 500 employees. The definition of "small business" used in government programs and contracting varies by industry (

How important are small businesses to the U.S. economy?

Small firms:

  • Represent 99.7 percent of all employer firm
  • Employ half of all private sector employees.
  • Pay 44 percent of total U.S. private payroll.
  • Generated 65 percent of net new jobs over the past 17 years.
  • Create more than half of the nonfarm private GDP.
  • Are 52 percent home-based and 2 percent franchises.
  • Made up 97.5 percent of all identified exporters and produced 31 percent of export value in FY 2008.
  • Produce 13 times more patents per employee than large patenting firms.
Source: U.S. Dept. of Commerce, Census Bureau and Intl. Trade Admin.;
Advocacy-funded research by Kathryn Kobe, 2007
( and CHI Research, 2003
(;U.S. Dept. of Labor, Bureau of Labor Statistics