Small Businesses Are Great For The Economy
If you are thinking about establishing a small business, you have everything to gain by doing so, and so does the community around you. As jobs that offer stability and generous benefits packages become harder to find among large employers, many industrious, enterprising people have been taking matters into their own hands and forming small companies to provide sought-after products and services. The Small Business Association (SBA) defines a small business as one that employs 500 employees or fewer, but different institutions may use different definitions of a small business. For example, some small business grants are available only to businesses that employ far fewer than 500 employees, and government agencies may use a different metric when deciding what constitutes a small business for purposes of eligibility for government contracts. You can create a lucrative small business using the resources you currently have, but you should beware of costly mistakes. A Washington DC small business lawyer can help you ensure that you are not unnecessarily leaving yourself vulnerable to liability and disputes.
The SBA Office of Advocacy Report
This month, the Small Business Administration Office of Advocacy released a report about the role of small business in the U.S. economy. More than 99 percent of businesses in the United States fit the SBA’s definition of small business, and more than 46 percent of employees work in small businesses. This category includes everything from businesses that do not have any employees besides the owner, all the way up to businesses with 499 employees. 81 percent of small businesses are very small indeed, having no employees except the business owner; the SBA calls these non-employer firms. Women own 42 percent of non-employer firms but only 20 percent of the small businesses that have more than one person on the payroll. Of small businesses with multiple employees, more than half have an S corporation business structure. Most non-employer firms are sole proprietorships.
The number of new small businesses has rapidly increased since 2015, with only a brief dip in the establishment of new small businesses at the beginning of the COVID-19 pandemic. Small businesses create 60 percent of all new job openings, but there is even better news. The survival rate for small businesses is much higher than some figures you have probably heard in the past. Two thirds of small businesses with multiple employees are still open two years after their establishment. One half are still going at the end of five years, and the ten-year and fifteen-year survival rate is one third and one quarter, respectively. Not all small businesses close because of financial losses. Some are dissolved because of mergers with other businesses, the sale of startup companies, or the retirement of the business owner.
Contact Us Today for Help
Starting a small business is a great way to be productive and to achieve financial stability. A small business lawyer can help you incorporate your small business and draft and conclude business contracts. Contact Tobin, O’Connor & Ewing for a consultation.