According to the US Census Bureau, there are nearly 28 million small businesses operating in the US. The government defines a “small business” as having fewer than 500 employees. Unfortunately, it’s not uncommon for small businesses to fail within the first few years of launching. In fact, studies have shown that more than half of all small businesses will close up whop within five years — and the numbers continue to decline from there.
But Intuit’s data paints a different picture of US small businesses. According to the company, employment within the small business sector increased 0.05% in the month July, creating approximately 10,000 new jobs for Americans. Granted, that’s slower than the growth rate of 1% from July of last year, but it’s still a positive gain, and any gain is good.
Intuit also revealed that small business workers experienced a wage increase, with the average worker receiving approximately $2,825 in July, which is up $3 from June. Again, $3 isn’t a huge amount by any means, but it signals positive growth for US small businesses. Assuming this trend continues, small business workers will likely receive even higher pay/compensation.
The average small business worker clocked 109.7 hours in July, which translates into about 25 hours per week. This was just slightly more than the average amount of time worked in June, which was 24 hours and some change.
So, what’s causing the uptick in small business revenue? This is something that Intuit did not elaborate on in its report. However, there are several plausible factors that are likely playing a role in this trend. For starters, unemployment numbers have dropped to one of the lowest levels in nearly a decade, attesting to a positive turnaround for the once-struggling US job market. With more Americans now able to find work, small businesses have an easier time turning a profit.
Another factor that’s playing a role in the US small business market is the recent emphasis on reshoring jobs. “Reshoring” refers to the action of bringing jobs from overseas back to the US. Rather than opening new factories in foreign countries, manufacturers are creating factories here in the US; thus, improving the job market in the process.