COMMENT: Planning for the future is something that every successful business owner has to constantly do, be it for weekly issues or larger picture multi-year strategic plans. There are many variables that determine the success or failure of a venture, some within the control of the decision makers at the firm, others outside their immediate influence. Political uncertainty, in a time of increasing government involvement with the economy, is something that small businesses are trying to plan for and may put stress on small businesses in the coming years. According to the Small Business Advocacy (www.sba.gov) “firms with fewer than 20 employees annually spend 45% more per employee than larger firms to comply with federal regulations.” Additional regulations concerning healthcare, taxation and environmental issues could further complicate small business planning.
Small businesses are a vital and integral part of the United States economy. Small firms (less than 500 employees) represent 99.7% of all employer firms, employ just over half of all private sector employees and contribute to more than half of the nonfarm gross domestic product (GDP). Of the 119.9 million nonfarm private sector workers in 2006, small firms with fewer than 500 workers employed 60.2 million. Of this 59.7 million, 21.6 million employees work for an employer that has less than 20 employees. Ultimately, around 18% of firms have fewer than 20 employees, and 32% of firms employ between 20 and 500 individuals.
Further Reading: Small Business Association Statistics about Small Businesses