Small Business Saturday
Small Business Saturday is a shopping holiday that’s observed on the Saturday after Thanksgiving annually in the United States. While Black Friday encourages people to do their holiday shopping at big box retail stores or malls, and Cyber Monday encourages people to do their holiday shopping online, Small Business Saturday encourages everyone to shop at local small businesses.
Since this holiday always falls on the last Saturday in November, it occurs anywhere between November 24th and November 30th, depending on the year.
The History Of Small Business Saturday
This holiday was first created by American Express in 2010 as a part of their Shop Small campaign. During that year, the United States was still in the middle of a recession due to the Financial Crisis of 2007-2008, and American Express wanted to do something to encourage people to shop at small businesses, as the majority of the economic pain being felt at that time seemed to be concentrated on small businesses.
These businesses were closing at a record pace during that year, so something had to be done, and this campaign was a small part of a long road to recovery for these businesses. American Express started the first event in 2010 in partnership with Boston Mayor Thomas M. Menino, the non-profit National Trust for Historic Preservation, and Roslindale Village Main Street.
This campaign was originally promoted by American Express through a number of initiatives, including national radio and TV ads. They also purchased advertising on Facebook and then allowed small merchant accounts to use it.
The following year, the U.S. Senate decided to take up the mantle of this holiday by passing a resolution to support the day and to encourage all 50 U.S. states to participate in the holiday. During this year, Barack Obama gave the holiday a much-needed boost by mentioning it in an address and asking consumers to participate in the holiday.
Facts About Small Businesses In The United States
Over the course of researching this holiday, we came across some very fascinating facts about small businesses in the U.S. So many so that we knew we had to list them for our readers. As a result, we’ve gathered together quite a few facts for our readers to enjoy while they’re observing Small Business Saturday.
There Are More Small Businesses Than Corporations
The one thing that we think will surprise most people is that small businesses outnumber corporations in the United States. However, even if you knew that little tidbit of information, then we suspect that you might be surprised to learn that small businesses outnumber corporations by a factor of 1,100+ to 1.
Most Small Businesses Are Owned by A Single Person
Another thing you may (or may not) know is that most small businesses in the U.S. are operated by a single person. According to the U.S. Small Business Association Office of Advocacy, approximately 70% of small businesses consist of just the owner.
Small Businesses Employ Over Half The U.S. Private Workforce
Even though 70% of small businesses only have one person in their employ, small businesses still account for approximately 57% of the private workforce of the United States. That means that most people are employed by small businesses in the U.S.
Small Businesses Pay For Less Than Half Of U.S. Payroll
In the U.S., small businesses pay approximately 44% of the entire country’s payroll. This is surprising considering that some of the largest multinational companies in the world call the U.S. their home.
In Some Parts Of The U.S., Small Businesses Are Especially Important
For most U.S. states, the payroll of small businesses accounts for 30% of the economic activity in that state. However, that’s not true in every state. For example, in Montana, small businesses make up 47.6% of the state’s payroll, in Wyoming, it accounts for 43.8%, and in Idaho, it accounts for 40.6% of the state’s payroll.
The U.S. Small Business Workforce Could Be Its Own Country
According to estimates, over 77 million people make up the U.S. small business workforce. That’s more than the 2021 population of France, the UK, and Italy. That means that there are enough small business workers in the U.S. to start their own country.
It Costs Less To Start A Small Business In The U.S. Than In Other Countries
It costs significantly less to start a small business in the U.S. than it does in some other countries. In the U.S. in 2009, it only cost about $325 to start a business on average. In India, it cost over $2,000, in Saudi Arabia it cost over $1,500, and in Brazil, it cost over $700. However, there are some countries in the world where it’s cheaper to start a small business than it is in the U.S. For example, in Ireland in 2009, it only cost $127 and in the U.K. it only cost $246.
Many Small Businesses Have An Uphill Climb
According to the Bureau of Labor Statistics, 20% of small businesses fail in their first year. That’s a sad statistic, but it only gets worse from there. In the second year, the small business has a 30% chance of failing. By the end of the fifth year, approximately 50% of them will have failed. It’s estimated that by the end of the first ten years, only about 30% of small businesses will have survived.
Immigrants Are An Important Part Of The U.S. Workforce
In the U.S., 12.5% of all small business owners are immigrants. That’s a significant portion and shows why immigrants are so important to the economy of the U.S. In New York City, the number of immigrants who are self-employed is even higher and comes in at almost 50% of all small businesses.
In 2009, Small U.S. Businesses Failed At An Alarming Rate
Although the above statistics of U.S. small business failures represent the average, not every year is equal. Some years there are fewer small business failures and other years there are a lot more. Take 2009, for example. In this year, an average of one small business went bankrupt almost every 8 minutes. In 2009, that resulted in 60,837 small businesses shuttering their doors. This was a 71% increase over the small business failures in 2008.
Approximately A Third Of Small Businesses Are Financed By Credit
Approximately a third of small business owners use their credit cards as a source of business financing. While this might seem high, this is actually a reduction in the amount of credit card debt used to finance small businesses. Historically, it’s been as high as 50% of all businesses using credit cards for business finance.
A Small Business In The U.S. Is Defined By Its Number of Employees
According to the Small Business Administration (SBA), any company that has fewer than 500 employees is considered a small business. This is the same standard that was used to determine small businesses for the Paycheck Protection Program during the COVID-19 pandemic.
There Are Over 30 Million Small Businesses
Just how many small businesses are there in the U.S.? Well, according to the Small Business And Entrepreneurship Council, there are over 30 million small businesses as of 2019. Most of these companies have fewer than 20 employees.
Small Health Care Businesses Employ More Than Small Businesses in Food Service
Most people think that most of the small businesses in the U.S. are in the food service industry, but that’s not the case. Food service small businesses only employ about 8.3 million workers. The small businesses that employ more than those are in the health care industry.
Small businesses in the health care industry employed more than 8.8 million people in 2019. What other industries do small businesses hire a lot of workers? Well, we can think of two right off the top of our heads. In the retail trade, approximately 5.6 million people are employed, and in construction, approximately 5.3 million workers are employed.
Over 8/10ths of Employment in Certain Industries Are Handled By Small Businesses
About 84% of workers working in forestry, fishing, hunting, and agriculture are employed by small businesses. This is followed closely by construction (83%) and real estate (68%).
Married Couples Run Over A Million Small U.S. Businesses
It’s also worth mentioning that husband and wife teams make up approximately 1.2 million of the small businesses in the U.S.
Less Than A Third Of Successful Small Businesses Are Passed To A Second Generation
Although a lot of small businesses fail in the first ten years, if they’re able to survive that period, then they have a chance of being passed down in a family to the next generation. It’s been estimated that approximately 30% of all small businesses will be passed down to the second generation.
Unfortunately, an even smaller percentage of these small businesses will be passed down to the third generation. It’s estimated that about 12% of second-generation businesses will be passed down to third-generation businesses.
Women Own Approximately 45% Of All U.S. Businesses
Even though women make up a majority of the population, it’s been estimated that only about 45% of the small businesses in the U.S. are owned by women. Even with lower than average ownership percentages, women-owned businesses still contribute over $1.7 trillion in sales in the U.S.
Observing Small Business Saturday
To observe this holiday, you’re probably going to want to buy something from a local business or several local businesses. You can also raise the profile of your favorite local small business by posting about them on social media using the hashtag #SmallBusinessSaturday. This is a good day for everyone to get out there and support the small businesses that contribute so much to the U.S. economy.
