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What kinds of small businesses are doing the best?

Zack Newman, Data Work By Zack Newman on

Published in Slideshow World

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What kinds of small businesses are doing the best?

Small businesses are mighty. They're considered the backbone of the American economy and the heartbeat of many communities.

While they're particularly vulnerable to market headwinds—think the economic fallout from the COVID-19 pandemic, rising inflation, and the impact of tariffs on parts and labor—small businesses are also more nimble than their behemoth counterparts.

And unlike corporate giants like Target and Walmart, which sell the same products from coast to coast, small businesses can curate inventory to their communities and utilize local resources—whether that's a cafe in the Catskills featuring fresh, local ingredients; a gift shop in Austin, Texas, featuring products from local artisans; or a renewable energy startup in Midland harnessing wind power.

Small businesses, defined by the Small Business Administration as establishments with fewer than 500 employees, are responsible for almost 44% of the nation's gross domestic product and employ roughly half of the private sector jobs. They're also major drivers of job creation: Since 2019, small businesses have accounted for more than 70% of net job creation, according to a 2024 Treasury Department report.

Although the SBA deems businesses small if they have fewer than 500 employees, about half of small businesses have only one to four employees, according to a Pew Research Center report based on the Census Bureau's Annual Business Survey. These smaller businesses, sometimes known as microenterprises, have an advantage: As industries evolve and grow, they can pivot or launch quickly, sometimes with little overhead. That can fuel productivity and innovation, prompting bigger companies to keep pace, according to the U.S. Chamber of Commerce.

CheapInsurance.com used the Census' Business Trends and Outlook Survey to determine which industries are seeing the most growth among businesses with 20 employees or fewer. The survey sampled approximately 1.2 million businesses biweekly and collected responses from March 10 through March 23.

Visit thestacker.com for similar lists and stories.


 

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