According to surveys, a staggering 86% of Americans hold a favorable view of small businesses, celebrating their vital contributions to both their local communities and the broader economy. These businesses offer a level of personal connection and high-quality service that often can’t be matched by larger corporations, which has garnered them a special place in the hearts of consumers.
But beyond just personal touch and high-quality customer service, small businesses with less than 500 employees also play a critical role in job creation and contribute to an impressive 44% of the U.S. economic activity. Indeed, small businesses, despite being labeled as ‘small’, aren’t so small after all – they make up almost 99.9% of all American firms.
Interestingly, of these businesses, around 6 million maintain a payroll. This not only implies their significance in driving national employment, but also echoes the importance of such small businesses in supporting the livelihood of the private-sector workforce.
In terms of distribution, half of these 6 million small firms employ between one to four individuals, and a quarter employ between five and 19 workers. Collectively, in 2021, these firms created jobs for around 56.4 million people and generated a whopping $16.2 trillion in revenue. Truly remarkable figures, indeed!
Ownership structures of these small businesses are also quite diverse.
Small businesses: Pillars of U.S. economic growth
Not all are family-owned as often assumed. They can be sole proprietorships, partnerships, or even cooperatives. An increasing number of small businesses are structured as limited liability companies (LLCs) or corporations.
All these diverse small enterprises form the backbone of the U.S. economy. Their contributions go beyond local communities, extending into international trade, fostering global connections, and relationships. They’re also dynamic engines of innovation, pioneering groundbreaking technologies, products, and services.
Given their significance, we shouldn’t just acknowledge their contributions, but actively support these enterprises. As they face hurdles like access to capital and operations management, initiatives and policies must be established to help them navigate these challenges. After all, supporting these businesses is a strategic investment in the long-term prosperity and diversity of our national economy.
