A Look at the State of Small Business in the U.S.

Small businesses have been the backbone of the United States. But it seems as if they’ve been beaten down and treated with disrespect in recent decades. With a little luck, the new economy may pave the way for bigger and better opportunities.

The State of Small Business

According to TD Bank’s annual Small Business Survey, they are doing better than they have in a while. More than half of those surveyed (53 percent) said they had plans to grow in 2018 (up from 46 percent in 2017).

Over that same period, the number of small business owners expecting to recruit and hire more staff increased from 9 percent to 22 percent. The TD Bank survey also found that 71 percent of the owners were confident they would be approved for credit, and just 16 percent reported that they had been declined for credit in the past because of their revenue stream.

According to the federal Small Business Administration (SBA), employment by modest firms is up to 58.94 million people, which represents roughly 47.5 percent of total private employment in the country.

All of these data points support the notion that small businesses in this country are headed in a positive direction, but a closer look suggests even more exciting details. Here are a few trends worth watching:

1. Funding Abounds

Because of the flourishing economy, banks, private investors, and other lenders are more willing to open their wallets and support startups and small firms that seek funding. This has created ample opportunities for companies to obtain the financial resources they need to expand.

In particular, there’s been an uptick in the willingness of banks to supply SBA loans for startups. According to Seek Business Capital, these startup business loans range in size between $25,000 to $350,000, but must be spend on approved expenses only.

Traditional bank loans, business lines of credit, and even short-term loans have enjoyed greater volume and approval rates as well.

2. Startups Are Thriving

As the ready availability of funding would imply, startups are thriving right now, and entrepreneurs have more opportunities than in the past to bring their idea to fruition in the form of a well-financed business venture.

Time will tell whether the widespread availability of funding was ultimately a good or bad thing for the business arena. It’s possible that it may have set up inexperienced entrepreneurs up for failure, for instance. But for now, it appears to be a positive.

3. Minority Small Business Ownership is Up

According to a study of more than 2,600 small business owners and entrepreneurs, minority ethnic groups now own 45 percent of small companies. This is a dramatic increase from the measly 15 percent stake that minority entrepreneurs held in 2015.

Most noteworthy has been the rise in African-American business ownership, which has seen a remarkable 400 percent year-over-year increase. The most business-friendly states for African-American business owners are Texas, Georgia, California, Florida, and North Carolina.

Though slightly less confident than the average survey respondent, African-American entrepreneurs rate their confidence in the state of small business a 7 out of 10.

4. Non-College Educated Business Owners On the Rise

Though Facebook co-founder and CEO Mark Zuckerberg may be an exception to the rule, he’s more closely connected to entrepreneurs than many of us realize. Most people have swallowed the notion that a college degree is necessary in order to be successful, but the reality is that fewer than half of small-business owners possess a college degree.

According to a CNBC/Survey Monkey survey on small businesses, just 44 percent of small business owners have a college or postgraduate degree. Exactly one-quarter of respondents have advanced no further than a high school diploma or G.E.D.

“Business owners who skipped out on education all shared some common threads: self-reliance, a good idea and a willingness to take risks,” CNBC explains.

Small Business is Alive and Well

In a pro-business political climate, a relatively stable economy, and with significant advances in technology and innovation appearing steadily on the horizon, it’s safe to say the small business world is healthier than it’s been in a couple of decades. No matter who you are or what sort of interest you have in business, that’s a reason to celebrate.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes