Small business importance noted by federal agency report

The Arkansas Small Business Profile released Friday (Jan. 23) by the U.S. Small Business Administration shows that the state in 2006 had 51,886 small employers who employ 48.8% of the state’s workforce.

The SBA defines a small business as having 500 employees or less.

“Arkansas depends on small business for jobs and economic growth,” said Shawne McGibbon, acting chief counsel for advocacy. “During this time of financial stress and economic instability, policymakers need to remember that the state’s small businesses provide the economic base for its families and communities.”

SBA stats indicate there were 4,812 small businesses in the Fort Smith metro area in 2006 that generated annual payroll of $1.632 billion. The 2006 figures also show there were 419 businesses employing more than 500 that generated an annual payroll of $2.09 billion.

The profile also shows that small businesses created 29% of the state’s net new jobs from 2004 to 2005 (latest available data).

Oklahoma has 70,973 small employers who employ 54% of the state’s workforce. Small businesses in Oklahoma created 75.8% of the state’s net new jobs from 2004 to 2005.

The U.S. has slightly more than 6 million small employers, or 99.7% of all employer firms, and they provide 50.4% of its private sector employment. These firms created 78.9% of the nation’s net new jobs from 2004 to 2005, and they generated more than half of the private non-farm gross domestic product, according to SBA figures.

SBA figures show that in 2007 there were an estimated 637,100 new small business starts and 560,300 small business closures.