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Small Businesses Leading Most States’ Economic Recovery
Tuesday, March 12, 2013 8:50 AM

Small businesses are leading most states’ economic recovery, according to a new state-by-state report recently released by the U.S. Small Business Administration (SBA) Office of Advocacy.  According to the report, small businesses significantly impact Texas’s economy. They represent 98.7 percent of all employers and employ 46.4 percent of the private-sector labor force.  The report also finds that small businesses are crucial to the fiscal condition of the state and numbered 2.3 million in 2010.

This profile uses the latest available data to illustrate the status of Texas’s small businesses (Note that a small business is defined as one with fewer than 500 employees).  Here are the highlights:

  • Texas’s economy was strong in 2011, with real gross state product increasing 7.0 percent and private-sector employment increasing 3.1 percent (Bureau of Economic Analysis, Bureau of Labor Statistics).
  • Small businesses employed 4.1 million workers in 2010 with most of the employment coming from firms with 20-499 employees.
  • The employment situation from 2007-2010 was up, and small businesses in Texas represented all of the net new jobs (Table 2). The unemployment rate in 2010-2011 decreased by 0.3 percent.
  • Most of Texas’s small businesses are very small as 83.1 percent of all businesses have no employees, and most employers have fewer than 20 employees.
  • The number of opening establishments is higher than closing establishments.
  • Self-employment in Texas improved over the last decade. Minority self-employment fared the best compared with other demographic groups.

Helpful resources: The Texas Credit Union League’s (TCUL) Member Business Lending Boot Camp.