Policy Matters
It Only Works When It’s Easy
Small business policy that is good for microbusinesses is hard.
During a Microbusiness Conversation last month, when the issue of sound public policy to help microbusinesses came up, here is how they described the essential policy challenge:
“What do you need? And can somebody afford to give that sort of help and can somebody pay for it?”
Those insightful words fell from the lips of Dr. Zolten Acs, chief economist for the SBA Office of Advocacy, and he’s right. This is the essential policy challenge for microbusinesses.
It’s harder to answer these questions than you might think.
Microbusiness Fact Sheet
Definitions
"Microbusiness" is a term generally used to refer to firms with fewer than five paid employees. Some (such as the National Association for the Self-Employed) use the term to refer to firms with fewer than ten employees.
Because microbusinesses are better defined not by their size but by how their size effects their operations, The MicroEnterprise Journal uses a more accurate qualitative definition: a microbusiness is any firm that is so small that there is no one working in the business that does only one job or task for the business.
Numbers
> Of a total 27.8 million U.S. firms, approximately 25.4 million, or 91.6%, are microbusinesses (2007; U.S. SBA, Office of Advocacy)
> Approximately 95.4% of U.S. firms have fewer than ten employees (2006)
> Nonemployer businesses — defined as firms with no paid employees outside the business owner(s) — comprise the lion's share of the microbusiness population. There are approximately 21.4 million nonemployer firms in the U.S. (2008; U.S. Census Bureau)
> Nonemployer businesses make up 78.2% of all U.S. firms (2007)
> During the period from 1997 through 2007, the percentage of microbusinesses among U.S. firms increased from 87% to 91.6%, while the percentage of non-micro small businesses decreased from 13% to 8.4%. Firms with more than 500 employees have remained fairly constant at less than one percent of U.S. businesses.
> Each new nonemployer firm represents one new self-created job. In 2007, new nonemployer firms created an average of 78,289 new jobs per month. Job creation through nonemployer firm births are not included in monthly employment data released by the U.S. Department of Labor
> Nonemployer firms generated $992 billion in receipts in 2007. This represents 7% of gross domestic product for 2007. Average annual receipts for nonemployer firms in 2007 was $45,688 per firm.
"In the real world, the smallest atom in the universe is the helium atom. And yet, helium is the fuel that powers suns. There's a lesson in that -- or, at least, there should be." -- Dawn Rivers Baker
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