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Chart of the Week: Most S-Corps are Micro Businesses
Jul 19th
Most people think that Subchapter S Corporations tend to be larger small businesses. However data from a study of small business tax compliance led by Donald DeLuca of IBM Global Services show that the vast majority of Subchapter S Corporations are micro-businesses – companies with fewer than 10 employees.
As the figure below indicates, 77 percent of S corporations have five or fewer empoyees and 87 percent have fewer than 10. In fact, counter to the common notion that virtually all self-employed people without employees operate their businesses as sole proprietorships, the data show that 44 percent of Subchapter S corporations have zero employees.
Source: Created from data from “Estimates of U.S. Federal Income Tax Compliance for Small Businesses,” http://www.ntanet.org/images/stories/pdf/proceedings/07/010.pdf
Chart of the Week: Most S-Corps are Micro Businesses
View full post on Small Business News, Tips, Advice – Small Business Trends
Chart of the Week: Job Loss in the Smallest Businesses
Jul 5th
While they don’t get the attention of layoffs at giant corporations, job losses at the smallest businesses are a problem for policy makers. Each lost job is one that the economy needs to replace, regardless of the size of the businesses where people once worked.
This makes recent data from Intuit troubling. The Intuit Small Business Employment Index, which measures the number of people working at businesses with 19 or fewer positions that use Intuit’s payroll service, indicates that 1,362,000 fewer people work in companies of this size now than did so in the month before the recession began.
The good news is that these businesses are now creating jobs. Since February 2010, when the low point in post 2007 employment was reached, companies with fewer than 20 employees have added 624,000 positions.
The bad news is that these companies are less than a third of the way toward replacing the 1,986,000 jobs lost between November of 2007 and February of last year. Moreover, at the current pace of job creation, it will be January of 2014 before businesses with fewer than 20 workers again employ the number of people working for them in November 2007, just before the recession began.
To me this means that job creation is still a problem at the smallest companies.
Chart of the Week: Job Loss in the Smallest Businesses
View full post on Small Business News, Tips, Advice – Small Business Trends
Chart of the Week: Job Loss in the Smallest Businesses
Jul 5th
While they don’t get the attention of layoffs at giant corporations, job losses at the smallest businesses are a problem for policy makers. Each lost job is one that the economy needs to replace, regardless of the size of the businesses where people once worked.
This makes recent data from Intuit troubling. The Intuit Small Business Employment Index, which measures the number of people working at businesses with 19 or fewer positions that use Intuit’s payroll service, indicates that 1,362,000 fewer people work in companies of this size now than did so in the month before the recession began.
The good news is that these businesses are now creating jobs. Since February 2010, when the low point in post 2007 employment was reached, companies with fewer than 20 employees have added 624,000 positions.
The bad news is that these companies are less than a third of the way toward replacing the 1,986,000 jobs lost between November of 2007 and February of last year. Moreover, at the current pace of job creation, it will be January of 2014 before businesses with fewer than 20 workers again employ the number of people working for them in November 2007, just before the recession began.
To me this means that job creation is still a problem at the smallest companies.
Chart of the Week: Job Loss in the Smallest Businesses
View full post on Small Business News, Tips, Advice – Small Business Trends
Chart of the Week: Smaller Businesses Tend to Pay Late
Jun 28th
Data reported in the Business Benchmark Report by credit bureau Experian shows that smaller businesses were more likely than their larger counterparts to be severely delinquent in paying their bills in fourth quarter of 2010 .
While non-employer firms have a relatively small share of payment dollars that are 90 or more days late – 5.6% – the share of severely delinquent payment dollars declines with firm size for businesses with employees. As the figure below indicates, the proportion shrinks from 9.8% for businesses with 1 to 4 employees to 1.8% for businesses with 1000 or more workers. The sharpest decline is between businesses with 1-4 employees and those with 100-249 employees. While the share of payment dollars that are severely delinquent continues to decline for businesses with at least 250 employees, the rate of decline is very slight above that firm size.
Source: Created from data from the Experian Business Benchmark Report, Q4, 2010
Chart of the Week: Smaller Businesses Tend to Pay Late
View full post on Small Business News, Tips, Advice – Small Business Trends
Chart of the Week: The Health of the Jobs Market
Jun 21st
The unemployment rate is a much watched, reported, and discussed measure of what’s happening to the jobs market. Last month, many pundits noted, the unemployment rate went back up to 9.1 percent.
Despite the attention it is given, the unemployment rate is not a very good measure of the employment situation. That’s because it depends a lot on what’s going on with labor force participation. If those out of a job give up looking for work because the economic situation is poor, the unemployment rate declines. And if the economy improves and those people re-enter the labor force, the unemployment rate rises.
A better measure of what’s going on in the jobs market is the share of the population that is employed. As the figure below indicates, that measure continues to look horrible. Back in November of 2007, the month before the Great Recession began, 62.9 percent of the U.S. population was employed. In May of 2011, that share was down to 58.4 percent.
To have the same fraction of Americans working as we had before the recession, 10.8 million more Americans would need to be employed. That’s an enormous number of people we have to put to work.
Source: Created from Bureau of Labor Statistics data (http://data.bls.gov/cgi-bin/surveymost?ln)
Chart of the Week: The Health of the Jobs Market
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Jun 20th
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Chart of the Week: Are Small Business Borrowing Needs Being Met?
Jun 14th
The National Federation of Independent Business’s (NFIB) survey of its members has shown an improvement in the satisfaction of small businesses’ need for credit in recent months. In April, the difference between the percent of small business owners who reported that their borrowing needs had been met over the previous three months less the share who reported that their credit needs had not been met hit 20, which is better than the difference of 16 seen last November.
But before anyone gets too excited about this improvement, I want to point out a couple of negatives about the current borrowing situation. First, even though the NFIB small business borrowing needs measure is above the post-2007 nadir of 15 seen last June, it is nowhere near the difference of 35 seen in February of 2007 before the recession and financial crisis hit. So we have a long way to go before we have small business borrowing needs being met the way they once were.
Second, just a couple of weeks ago I pointed out that the NFIB data were suggesting that credit may become tougher for small businesses to get over the next several months. If that happens, small business borrowing needs will be less well satisfied in coming months than they are right now.
Third, and probably most important, we don’t know how much of the satisfaction of small business borrowing needs is coming from weak demand for loans. With sales of many products and services still weak, and relatively few small businesses expanding, many small business owners are asking for smaller loans and lines of credit than they did before the recession. As a result, the decent showing on the satisfaction-of-small-business-borrowing-needs measure might be coming from the weak economy triggering less demand for small business loans, not a greater willingness of creditors to lend.
Source: Created from data from the NFIB's Small Business Economic Trends
Chart of the Week: Are Small Business Borrowing Needs Being Met?
View full post on Small Business News, Tips, Advice – Small Business Trends
Chart of the Week: A Declining Share of U.S. Businesses are New
Jun 7th
Startups account for a much smaller share of U.S. businesses than they used to. Recently released data from the Census Bureau shows that back in 1977, 16 percent of U.S. companies were new. By 2009, that share had fallen to 8 percent.
As the figure below shows, the overall trend in the proportion of startups has been downward, but the new company share had increased for several years prior to the Great Recession. The downturn reversed the increase and was a period of rapid decline in the proportion of start-ups.
Chart: Startups as a Percentage of all Businesses, 1977 to 2009
Chart of the Week: A Declining Share of U.S. Businesses are New
View full post on Small Business News, Tips, Advice – Small Business Trends
156,963/year – 3 EBay(R) Auctions Per Week
Jun 5th
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Is Small Business Access to Credit About to Tighten? [CHART of the Week]
May 30th
The most recent data from the National Federation of Independent Business (NFIB) suggests that small business credit is about to become harder to get once again. Between March and April of 2011 the difference between the fraction of business owners saying that credit will become more available and the fraction saying that it will become less available turned more negative, after improving for nearly a year.
In March, the figure below shows, the share of small business owners who said credit conditions would get better over the next three months was nine percentage points lower than the share that said conditions would get worse. But in April, the gap had risen to 13 percentage points.
Although this measure tends to fluctuate from month to month, it had improved from poor levels seen during the Great Recession. Unfortunately, we are now closer to very negative levels expectations about future credit availability seen at the depths of the recession than we are to the more favorable ones experienced in the summer of 2007 before the recession began.
Is Small Business Access to Credit About to Tighten? [CHART of the Week]
View full post on Small Business News, Tips, Advice – Small Business Trends
