Small Businesses and Hard Facts

Updated: January 18, 2010

Small business is the engine that drives the American economy. Entrepreneurs with a dream combine with those with a desire to be self-sufficient create new companies every day, striving to be successful while making their personal dreams and goals a reality.

Although small businesses are small, their impact on the economy is huge. They, not huge corporations, form the majority of exporters to other countries and they are the employers of more than 50% of all workers in the private sector.

Impressive data on the power of small businesses in the United States should not be emphasized to the point that other data is ignored. For example, about half of all start-ups fail within 5 years. When almost 700,000 business open in a given year, statistics suggest that almost 600,000 will close while bankruptcies number in the tens of thousands. Curiously, business failures are often concentrated in Florida, New England, and in western states.

Small businesses typically employ fewer than 500 people and offer exceptional opportunities to all Americans. Without them and the risks they take, the nation and the economy would be vastly different than it is today.

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