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Q: SMB Market Size ( Answered 4 out of 5 stars,   0 Comments )
Subject: SMB Market Size
Category: Business and Money
Asked by: celestial-ga
List Price: $50.00
Posted: 19 Jul 2004 11:09 PDT
Expires: 18 Aug 2004 11:09 PDT
Question ID: 376212
I'm seeking information on the number of businesses in the United
States that are characterized as SMB businesses - small & mid-size
business. I need an aggregate figure and if possible a further
breakdown on the sub-segments that make up that aggregate figure and
the number of businesses in each of those sub-segments. Please provide
documentation on source/date of data.

Request for Question Clarification by pafalafa-ga on 19 Jul 2004 12:51 PDT
The United States does not have any "official" definition that I know
of either a small business or a medium-sized business.

The term SME is often used to refer to "Small and Medium-sized
Enterprises", and is given a formal definition in some countries, but
not in the US.

The US Small Business Administration generally uses 500 employees as a
convenient size cut-off to distinguish "small businesses" from their
larger brethren.  If you would like your question answered using the
500-employee mark as a cutoff, then I can probably assist you.

If that doesn't work for you, though, please let me know how you would
like "small" and "medium" defined for US businesses.



Clarification of Question by celestial-ga on 19 Jul 2004 18:48 PDT
Hi - herer's some clarification. I need figures for the small business
market and mid-markets; any definition of them that clarifies the
situation will work. Not sure how to break the definition apart -
agree that there are multiple ways to look at it and sub-segment it. I
am not interested in Fortune 500 companies but am interested in almost
everything else and with as much subsegmentation as possible - either
by number of employees or revenue.

Hope that helps,
Subject: Re: SMB Market Size
Answered By: pafalafa-ga on 19 Jul 2004 20:22 PDT
Rated:4 out of 5 stars
Hello celestial-ga,

Thanks for your clarification.

I think you'll find most of the information you're looking for at this
Census Bureau site on the size of businesses in the US in 2001:

Starting from the first table:

U.S. - All industries by Employment Size of Enterprise 

you can see that there were 5,657,774 firms in the US in 2001 (click
on the word "Firms" -- or on other underlined terms in the table -- to
get definitions).

The vast majority of these are undeniably "small" businesses, no
matter what definition one uses.  There were 703,837 firms with no
employees, 2.7 million firms with 1-4 employees, and so on, down the
table.  In sharp contrast, there were only 930 firms in the entire
country with 10,000 or more employees  -- these pretty much overlap
with the Fortune 1000 type of companies.

On the right hand side of the table, is a column with "Annual payroll"
figures.  Here, the trends are reversed.  Even though there are
millions of businesses with 1-4 employees, the total payroll they
payout is fairly small -- $34.29 billion dollars.

The 930 largest firms at the bottom of this first table, in contrast,
have a total payroll of $1.248 trillion!


An industry-by-industry breakout is presented in the last table on
this page, in a somewhat different format.

For each listing, the table shows the total number of firms in that
category, followed by the percent of employment accounted for by firms
of different sizes.  Similar data is presented for total number of
employees in the sector.

An example will (hopefully) make this clear.

In the "Manufacturing" sector, the table tells us that:

--there are 305,160 manufacturing firms overall

--27.2% of the firms employ 20 or more people 
(conversely, 100-27.2 = 62.8% of manufacturing firms employ fewer than
20 people).

--Only 6.6% of manufacturers employs 100 or more people, and

--only 1.5% employs 500 or more. 

Therefore, if you want to consider 500 employees as a cut-off between
smaller and larger firms, you can see that only 1.5% of manufacturing
firms would be classified as "large" while the vast majority are

Shifting over to the next set of columns, you can see that:

--Manufacturers employ a total of 15,950,424 people

--92.1% of workers are employed at firms with 20 or more workers

--75.8% at firms of 100 or more workers

--58.4% work for "large" firms that employ 500 or more people.

Thus, in the manufacturing sector, somehwat more than half the workers
(58.4%) work for "large" firms, while the rest work for smaller

Interestingly, if you look at the top line in this table for "All
industries", you can see that almost exactly half (50.1%) of all
workers are employed for firms of 500 or more people, while the other
half work for SME's.


I threw a lot of numbers at you, and I hope this is all clear.

But before rating this answer, please let me know if you need any
additional explanations, or any additional information at all.  Just
post a Request for Clarification and let me how I can be of help.



search strategy:  Used bookmarked sites for the Census Bureau
celestial-ga rated this answer:4 out of 5 stars
Thanks so much for both the information, the clarification and the
sourcing guidance. Very helpful.

There are no comments at this time.

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