Mom and Pop Businesses: Key Contributors to U.S. Economy

U.S. Census Bureau Resources, Data Tools Help Mom and Pop Businesses, Highlight Their Business Impact

March 29, 2022

Author:

Adam Grundy and Shannan Alston

In 1939, Rick and Margie Segel created Mom and Pop Business Owners Day in honor of their parents’ hat shop that opened that year. Eighty-three years later, it’s still celebrated and continues to highlight the valuable contributions small businesses make to the U.S. economy.

The Small Business Administration defines a “small business’’ as an establishment with fewer than 500 employees.

The U.S. Census Bureau recognizes the importance of all small businesses and provides resources and tools to help them.

How Many Small Businesses Exist?

According to County Business Patterns, there were 7,936,977 small businesses establishments in the United States in 2019, up from 7,890,857 in 2018.

The Small Business Administration defines a “small business’’ as an establishment with fewer than 500 employees. An establishment is a single physical location at which business is conducted or services or industrial operations are performed.

These small businesses operate in most sectors of the economy, including retail, manufacturing and health care and social assistance.

The Moms and Pops Who Own These Businesses

Owners of small businesses come from a variety of demographic backgrounds and Census Bureau data show just how diverse they are.

The Annual Business Survey (ABS) produces estimates of employer firms by owner demographics. A firm is a business that consists of one or more domestic establishments the reporting firm specified are under its ownership or control.

In 2019, the most recent ABS data available, among firms with fewer than 500 employees in all sectors of the U.S. economy:

Approximately 1,207,000 were owned by women.
Approximately 3,501,000 were owned by men.
Approximately 1,076,000 were minority-owned: 134,100 had Black or African-American owners; 581,00 had Asian owners; and 347,000 had Hispanic owners.

How Small Businesses Have Fared During the Pandemic

The Small Business Pulse Survey (SBPS) is an experimental data product measuring the effect of changing business conditions amid the coronavirus pandemic. SBPS is classified as experimental because it does not meet the same quality standards as our regular data products, like CBP and ABS.

SBPS data complements existing Census Bureau data collections by providing high-frequency, detailed information on the challenges small businesses have been facing during the Coronavirus pandemic.

We compared SBPS data collected in January 2021 and in January 2022 for two survey questions:

In the last week, did this business have a change in operating revenues/sales/receipts, not including any financial assistance or loans?
In the last week, did this business have a change in the number of paid employees?

The percentage of U.S. small businesses reporting decreases in revenues in the last week decreased from 40.4% in SBPS Phase 3 (1/4/2021 – 1/10/2021) to 33.0% in SBPS Phase 7 (1/3/2022 – 1/9/2022).

Small Business Pulse Survey Screenshot 1

Small Business Pulse Survey Screenshot 2

Also, the percentage of U.S. small businesses reporting decreases in the number of paid employees in the last week increased from 12.4% during that same 1/4-1/10 2021 period to 13.5% during the 1/3-1/9 2022 period.

Small Business Pulse Survey Screenshot 3

Small Business Pulse Survey Screenshot 4

Census Help for Small Businesses

The Census Bureau provides many tools and resources to help small businesses:

Census Business Builder: Small Business Edition V. 4.1 helps entrepreneurs examine competitors and best location(s) to start their business.
Small Business Census Website helps businesses identify customers’ needs.
Census Bureau training for specific needs such as the webinar, Starting a Small Business.

Adam Grundy is a supervisory statistician in the Census Bureau’s Economic Management Division.

Shannan Alston is a survey statistician in the Economic Management Division.