Before we begin this discussion, I need to get something off my chest. I find it ridiculously presumptuous when someone starts a program and calls it the “First Annual” Anything. Really? First- ok. Annual- ok. First Annual? How about waiting until you show up again to come up with such a moniker. I’ve seen a slew of things that promised to be annual that never recurred.
Now, I am not saying this one is among those baloney claims. But, let’s be real. Let’s talk about the First or the Annual. Or, maybe the “Inaugural”. So, I don’t wonder why you waited until now to start.
Because the US Census Bureau is finally getting around to publishing the results from the “First Annual Survey of Entrepreneurs“. And, they are reporting results from the survey they performed in 2014. (Begin to see the problem with calling something the First Annual Survey? Data that comes in nearly two years late…)
The Census Bureau surveyed some 5.4 million firms that had employees. You know, the kind of firms where the people working for a firm are paid a salary. These companies accrued some $ 33 trillion in receipts, with a total employment of 115.1 million folks. Their payroll averaged almost $50K each (actually, $ 48997, for a total payroll of $ 5.6 trillion.)
If you consider these data more carefully, you can see most of the firms in the US are small. After all, they indicate that there were only 20 employees per firm on average. And, that some 17% of total receipts went directly to payroll. A shade more than a quarter of the firms (26%, or 1.4 million) had an annual turnover exceeding $ 1 KK- and 106,438 (about 2 %) had receipts of less than 10K. (Hmm- and they still had employees? Must have been service industries where they paid 100% of the receipts as payroll.)
Firms that had 500 or more staff (normally NOT considered small enterprises) were but a sliver of those surveyed- only 0.3% of the total firms (17982). Of this small number, 2/3 (ok, 64.4%) were public entities.
Almost 10% (481981) of the firms surveryed began their operations in 2012 or after. Some- more than 3%- have been around for 16 years or more (167,917 of the firms). The biggest collection of firms (about 40%) have existed for 11 to 15 years (2.4 million of them).
These numbers were pretty surprising to me. I knew the failure rate for companies was pretty high, but realizing that only 47% of the all the firms to be around for more than a decade was a much lower number than obtained back in the 70s, when we were starting our companies. (Maybe now’s the time to tell you only 62.4% of all the firms surveyed eked out a profit!)
It was interesting to see that 17.5% of the firms were minority owned- but, even so, these entities only accounted for 3.3% of the total receipts for all firms ($1.1 trillion). And, there was a higher percentage of minority owned startups (12.9 v. 8.9% for all firms) that were in business for two years or less- but only 1.4% were 16 years or older (that’s half as many for all firms).
Women owned entities comprised almost 20% of the firms (1.1 million or 19.4%), with gross receipts of some $ 1.3 trillion (4% of total receipts for all firms). And, if the firm operated in the health care/social assistance sector or educational sector, they were the ones most likely to be headed by women (28% of these sectors).
But, these are only some of the interesting facts about new firms. Tomorrow, we’ll continue the discussion.