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THE ISLANDER, SEPTEMBER 21, 2009, PAGE 15 Q&A from the Small Business Advocate What is a small business? The Office of Advocacy defines a small business for research purposes as an independent business having fewer than 500 employees. Firms wishing to be designated small businesses for government programs such as contracting must meet size standards specified by the U.S. Small Business Administration (SBA) Office of Size Stan dards. These standards vary by industry; see www.sba.gov/size. How important are small businesses to the U.S. economy? Small firms: • Represent 99.7% of all employer firms. • Employ just over half of all private sector employees. • Pay 44% of total U.S. pri vate payroll. • Have generated 64% of net new jobs over the past 15 years. • Create more than half of the nonfarm private gross domestic product (GDP). • Hire 40% of high tech workers (such as scientists, engineers, and computer pro grammers). • Are 52% home-based and 2% franchises. • Made up 97.3% of all iden tified exporters and produced 30.2% of the known export value in FY 2007. • Produce 13 times more pat ents per employee than large patenting firms; these patents are twice as likely as large firm patents to be among the one percent most cited. Source: U.S. Dept, of Com merce, Bureau of the Census and. International Trade Admin.; Advo cacy-funded research by Kathryn Kobe, 2007 (www.sba.gov /advo / research / rs299tot.pdf and CHI Research, 2003 (www.sba.gov/ advo / research / rs225tot.pdf); U.S. ISLAND ANIMAL HOSPITAL Where pets are part of the family Jan Rossiter, DVM Jason Arbo, DVM Brennan McGoldrick, DVM The IAH healthcare team is committed to full service companion animal care. We offer boarding and grooming for your convenience. 2603 Demere Rd, St. Simons Isl 638-2583 • www.iahvets.com Dept, of Labor, Bureau of Labor Statistics. What share of net new jobs do small businesses create? Firms with fewer than 500 employees accounted for 64% (or 14.5 million) of the 22.5 mil lion net new jobs (gains minus losses) between 1993 and the third quarter of 2008. Continu ing firms accounted for 68% of net new jobs, and the other 32% reflect net new jobs from firm births minus those lost in firm closures (1993 to 2007). Source: U.S. Dept, of Labor, Bureau of Labor Statistics, Busi ness Employment Dynamics. Note that the methodology used for the figures above counts job gains or losses in the actual class size where they occurred. How many businesses open and close each year? An estimated 627,200 new employer firms began opera tions in 2008, and 595,600 firms closed that year. This amounts to an annual turnover of about 10% for entry and 10% for exit. Nonemployer firms have turn over rates three times as high as those of employer firms, mostly because of easier entry and exit conditions. Source: U.S. Dept, of Commerce, Bureau of the Census; Administra tive Office of the U.S. Courts; U.S. Dept, of Labor, Employment and Training Administration. What is small firms' share of employment? Small businesses employ just over half of U.S. workers. Of 119.9 million nonfarm pri vate sector workers in 2006, small firms with fewer than 500 workers employed 60.2 mil lion and large firms employed 59.7 million. Firms with fewer than 20 employees employed 21.6 million. While small firms create a majority of the net new jobs, their share of employment remains steady since some firms grow into large firms as they create new jobs. Small firms’ share of part-time work ers (21%) is similar to large firms’ share (18%). Source: U.S. Dept, of Commerce, Bureau of the Census: Statistics of U.S. Businesses, Current Popula tion Survey. How many small businesses are there? In 2008, there were 29.6 mil lion businesses in the United States, according to Office of Advocacy estimates. Census data show that there were 6.0 million firms with employees in 2006 and 21.7 million with out employees in 2007 (the lat est available data). Small firms with fewer than 500 employees represent 99.9% of the 29.6 mil lion businesses (including both employers and nonemployers), as the most recent data show there were about 18,000 large businesses in 2006. Source: Office of Advocacy esti mates based on data from the U.S. Dept, of Commerce, Bureau of the Census, and U.S. Dept, of Labor, Employment and Training Admin istration. What is the survival rate for new firms? Seven out of ten new employer firms last at least two years, and about half survive five years. More specifically, according to new Census data, 69% of new employer estab lishments bom to new firms in 2000 survived at least two years, and 51% survived five or more years. Firms born in 1990 had very similar survival rates. With most firms start ing small, 99.8% of the new employer establishments were started by small firms. Survival rates were similar across states and major industries. Source: U.S Dept, of Commerce, Capture the Memory of a Lifetime. We can help! 15% off the framing of student portraits (Expires 10/31/09) • Gift Certificates Available • lynn Wanvick • Beverly Draivdy 1403 Newcastle Street • Brunswick • 262-0050 Bureau of the Census, Business Dynamics Statistics. Note that the figures could be skewed slightly by the rare occurrence of new firms opening multiple establishments in their first few years. How are small businesses financed? Commercial banks and other depository institutions are the largest lenders of debt capital to small businesses. They account ed for almost 65% of total tra ditional credit to small busi nesses in 2003. (This includes credit lines and loans for non- residential mortgages, vehicles, equipment, and leases.) Credit cards account for much of the growth in small business lend ing over the past few years. For more information, see Advoca cy’s annual publication, Small Business Lending in the Unit ed States (www.sba.gov/advo/ research/lending.html). How do regulations affect small firms? Very small firms with fewer than 20 employees annually spend 45% more per employee than larger firms to comply with federal regulations. These very small firms spend four and a half times as much per employee to comply with envi ronmental regulations and 67% more per employee on tax compliance than their larger counterparts. For data broken out by industry, see www.sba.gov/advo/research/ rs264tot.pdf. Whom do I contact about regulations? To submit comments on pro posed regulations, send email to advocacy@sba.gov or visit Advocacy’s regulatory alerts page atwww.sba.gov/advo/laws/ law_regalerts.html. To inquire about unfair regulatory enforce ment, contact SBA’s Office of the National Ombudsman at ombudsman@sba.gov. How can I get more information? For more information, visit Advocacy’s website: www.sba. gov/advo. Specific points of interest include: • Economic research: www. sba.gov/advo/research. • Firm size data (U.S., state, and metropolitan static and dynamic data): www.sba.gov/ advo/research/data.html. • Small firm lending stud ies: www.sba.gov/advo/research/ lending.html. • Small business profiles by state and territory: www.sba. gov/advo/research/profiles. • The Small Business Advo cate newsletter: www.sba.gov/ advo/newsletter.html. Direct questions to (202) 205- 6533 or advocacy@sba.gov. □ Bruce Kennedy Tire Company Honest, friendly service from a name you can trust! Oil Changes Brakes • Tires A.C. • Alignment 2928 Norwich Street Brunswick, GA 264-6578 phone 264-6580 fax Hours: Mon.-Fri. 8 a.m. - 5 p.m. Save up to 56% on your coo costs while also saving other valuable resources i enmgy-effitisnl Infinity ' yi re yc i j livQ and *Cooling cost savings compared to a 10 SEER air conditioner. CentiffUcL Siectuc, *101. j§™ GA. Reg. 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