Small businesses: Who we are, what we do
Some of the numbers are a tad dated, but data in the 2017 Illinois Small Business Profile released earlier this month by the U.S. Small Business Administration provide some interesting reading.
One bit of information, buried in the small type, should even help answer the perpetual, and sometimes confusing question: Just what is a small business? Sales volume doesn't matter. Well, sales do matter if you're the owner of a small (or large) business, but, according to the SBA, "Small businesses are defined as those employing fewer than 500 employees."
With that as a start:
• There are 1.2 million small businesses in Illinois, 99.6 percent of the state's total businesses.
• We employ slightly more than 2.4 million people, 46 percent of all Illinois employees.
• In pure numbers, 350,892 small business employees work in health care and social assistance -- a good number but just 45 percent of that sector's total employees.
Second in small business employment is accommodation and food services (303,329), followed by manufacturing (265,564) and professional, scientific and technical services (217,579). There are -- or were; the data are from 2014 -- slightly more than 156,600 small business employees in construction, 86 percent of total private employment in that field.
It apparently makes a difference whether our businesses are incorporated or not. In 2015, the median income for individuals self-employed at their own incorporated businesses was $51,161. Those self-employed at their own unincorporated businesses had a median income of $23,481.
• Demographically, the SBA profile sorts its data by a formula that in some fashion matches the number of small businesses per 100 people of working age -- apparently those in each demographic unit who are 16 years old or older. Without digging very far into the SBA approach, there seem to be no demographic surprises: More men than women own businesses; fewer veterans than nonveterans do; fewer minorities own businesses than what the SBA data classify as non-minorities. Demographic data are from 2012 -- and perhaps have changed some. * Startups and closures are a little more even than you might expect. In the second quarter of 2015, there were 9,675 business startups in Illinois; they generated more than 39,000 new jobs. Startups, according to the data explanation, get counted when a business hires its first employee. In the same 2015 quarter, 7,103 businesses closed their doors; 26,767 jobs were lost. According to the U.S. Department of Labor, a business "exits" when it goes from one employee to none -- and stays closed for at least a year.
• Loan money is available, and we're using it. Fresh data covering the first quarter of FY 2018 indicate the SBA guaranteed 600 loans to Illinois businesses in its 7a and 504 loan programs. The dollar total was $381 million, an increase of 13 percent in the number of loans and 22 percent in dollars over FY 2017. SBA 504 loans help fund small business real estate and capital equipment purchases; among the uses for 7a loans are acquisition of a business, and working capital and inventory loans.
• © 2018 Kendall Communications Inc. Follow Jim Kendall on LinkedIn and Twitter. Write him at Jim@kendallcom.com. Read Jim's Business Owners' Blog at www.kendallcom.com.