That’s largely because most employers aren’t interested in growing past a certain point. A study by the Kauffman Foundation, an entrepreneurship research organization, showed that existing firms actually lost about a million more jobs than they added every year between 19.
Related: How do you build a business in the digital age?įurthermore, employing a large number of workers doesn’t necessarily translate into creating a large number of new jobs. The SBA considers firms with fewer than 500 employees small, placing nearly every business in the country (99.7 percent of firms that have employees) under that umbrella term - thus, it is no surprise they employ the most workers.Ī more strict definition of small business, using a limit of 50 employees, would still include the vast majority of the country’s businesses, but it would trim their share of the workforce to less than a third. However, the definition of “small business” provides important context for those statistics. Small Business Administration that show small firms employ just over half of the private-sector workforce and created nearly two-thirds of nation’s net new jobs over the past decade and a half. In support of that title, many have cited studies from the U.S.
President Obama has used that line on several occasions to describe the importance of small businesses, as have scores of other politicians.