The Annual Business Survey (ABS) provides information on selected economic and demographic characteristics for businesses and business owners by sex, ethnicity, race, and veteran status. Further, the survey measures research and development (for microbusinesses), new business topics such as innovation and technology, as well as other business characteristics. The ABS is conducted jointly by the U.S. Census Bureau and the National Center for Science and Engineering Statistics within the National Science Foundation. The ABS replaces the five-year Survey of Business Owners (SBO) for employer businesses, the Annual Survey of Entrepreneurs (ASE), the Business R&D and Innovation for Microbusinesses survey (BRDI-M), and the innovation section of the Business R&D and Innovation Survey (BRDI-S).

COVERAGE

Included are all nonfarm employer businesses filing the 941, 944, or 1120 tax forms. The ABS is conducted on a company or firm basis rather than an establishment basis. A company or firm is a business consisting of one or more domestic establishments that the reporting firm specified under its ownership or control.

The data are compiled by combining data collected on businesses and business owners in the ABS with data collected on the economic census and administrative records.

Business ownership is defined as having more than 50% of the stock or equity in the business and is categorized by:

Sex: Male; female; or equally male/female
Ethnicity: Hispanic; equally Hispanic/non-Hispanic; non-Hispanic
Race: White; Black or African American; American Indian or Alaska Native; Asian; Native Hawaiian or Other Pacific Islander; minority; equally minority/nonminority; nonminority
Veteran status: Veteran; equally veteran/nonveteran; nonveteran
Publicly held and other firms not classifiable by sex, ethnicity, race, and veteran status

Firms equally male-/female-owned, equally minority-/nonminority-owned, and equally veteran-/nonveteran-owned are counted and tabulated as separate categories.

CONTENT

The ABS is designed to incorporate new content each survey year based on topics of relevance. Each year new questions are submitted to the Office of Management and Budget (OMB) for approval. For the 2023 survey year, content includes Research and Development (R&D); Goods, Services, and Business Processes; Financing; Technology and Intellectual Property; and Sustainability and Climate Impact. The ABS also collects various data regarding the business owners, such as sex, ethnicity, race, veteran status, and other business characteristics.

FREQUENCY

The ABS is planned to be collected annually starting with survey year 2017.

METHODS

The ABS collection is electronic. The ABS samples approximately 850,000 employer businesses every 5 years and approximately 300,000 employer businesses annually. Businesses selected for the survey receive an initial letter informing the respondents of their requirement to complete the survey and provides survey access instructions.

The sample is stratified by state, frame, and industry and is systematically sampled within each stratum. A standard type of estimation for stratified systematic sampling is used.

The Census Bureau selects large companies with certainty based on volume of sales, payroll, or number of paid employees. All certainty cases are sure to be selected and represent only themselves (i.e., have a selection probability of one and a sampling weight of one). The certainty cutoffs vary by sampling stratum, and each stratum is sampled at varying rates, depending on the number of firms in a particular stratum. The remaining universe is subjected to stratified systematic random sampling.

DATA PRODUCTS

Estimates include number of employer firms, sales and receipts, annual payroll, and employment by sex, ethnicity, race, and veteran status. Additionally, the ABS introduces a new module each year to capture information on relevant business components.

Estimates are available at the U.S., state, MSA, county and economic place levels. Estimates will also be available by NAICS sector. The survey also produces annual data on the characteristics of businesses and business owners by demographic category. Additional details on data products are being developed.

USES

Statistics from the ABS will be used by government program officials, industry organization leaders, economic and social analysts, business entrepreneurs, and domestic and foreign researchers in academia, business, and government. Estimates produced on owner demographic data may be used to assess business assistance needs, allocate available program resources, and create a framework for planning, directing, and assessing programs that promote the activities of disadvantaged groups; to assess minority-owned businesses by industry and area and to educate industry associations, corporations, and government entities; to analyze business operations in comparison to similar firms, compute market share, and assess business growth and future prospects. Estimates produced on research and development and innovation may be used to compare R&D costs across industries, determine where R&D activity is conducted geographically, and identify the types of businesses with R&D; to contribute to the Bureau of Economic Analysis (BEA) system of national accounts; to increase investments in research and development, strengthen education, and encourage entrepreneurship; and to compare business innovation in the United States to that of other countries, including those in the European Union.

Historical ASE and SBO data have been widely used by private firms and individuals to evaluate their own businesses and markets. The ABS will be able to provide most of the same continuity as previous statistics, with enhanced content, to provide a more comprehensive view of domestic employer businesses, their owners and corresponding characteristics and activities. Additional examples of data use include:

The Small Business Administration (SBA) and the Minority Business Development Agency (MBDA) to assess business assistance needs and allocate available program resources.
Local government commissions on small and disadvantaged businesses to establish and evaluate contract procurement practices.
Federal, state and local government agencies as a framework for planning, directing and assessing programs that promote the activities of disadvantaged groups.
The National Women’s Business Council to assess the state of women’s business ownership for policymakers, researchers, and the public at large.
Consultants and researchers to analyze long-term economic and demographic shifts, and differences in ownership and performance among geographic areas.
Individual business owners to analyze their operations in comparison to similar firms, compute their market share, and assess their growth and future prospects.