Small Business Firms Decline Again in the United States

The number of non-employer small businesses declined by more than 260,000 between 2008 and 2009 in the United States, according to the U.S. Census Bureau. These are businesses without paid employees but nonetheless are firms paying income taxes needed to balance the budget. Real estate agents, beauticians and construction contractors are examples of non-employer businesses – ones that buy cars and light trucks as U.S. auto sales remain depressed. Overall, U.S. non-employer businesses generated approximately $837.8 billion in receipts during 2009.

The new statistics released today show in 2009 there were 21.1 million non-employer firms, a decrease of about 1.2% from 2008. This continues a decline that started in 2008 — following the beginning of the ongoing Great Recession at the end of 2007 — when the total number fell by more than 350,000 from a peak of 21.7 million firms in 2007. 

These new figures come from Non-employer Statistics: 2009, an annual report on businesses without paid employees that includes more than 450 separate categories. Data are provided at the national, state, county and metropolitan area levels. Most non-employers are self-employed and operate businesses that may or may not be their primary source of income.

“Non-employer firms generate a small percentage of total U.S. business receipts, but they constitute the majority of U.S. businesses,” said William G. Bostic Jr., associate director for economic programs at the U.S. Census Bureau. “The decline we have seen since 2008 reflects the change in economic conditions during that time.”

Non-employer businesses grew in relatively few industries between 2008 and 2009, coinciding with the ongoing calamity in the U.S. economy. The personal care services industry, which includes barber shops and beauty salons, added close to 72,000 firms. Child day care services also showed an increase in non-employer businesses, adding nearly 27,000 locations.

Real estate-related industries showed the largest decline, no surprise given the housing market collapse, with lessors of real estate, offices of real estate agents and brokers, and activities related to real estate (such as those who appraise real estate or manage it for others) losing about 145,000 firms.

Although the number of non-employer businesses declined in most states from 2008 to 2009, small businesses grew in three states and the District of Columbia during this period. Texas added the most firms (8,260), followed by Georgia (3,336), Louisiana (1,871) and the District of Columbia (462).

About Ken Zino

Ken Zino is an auto industry veteran with global experience in print, broadcast and electronic media. He has auto testing, marketing, public relations and communications expertise garnered while working in Asia, Europe and the U.S.
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