Small businesses are the lifeblood of many communities. In fact, there are over 11.5 million businesses in the United States, and 99.8 percent of them are considered small based on a threshold of fewer than 500 employees. Those small businesses employ more than 106 million private-sector workers, or 82.1 percent of private jobs nationwide. Businesses with fewer than 50 employees account for an impressive 11.1 million businesses, or 96.2 percent of all business establishments, and employ 57 million people, or 44.1 percent of all positions.
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It is important to note that even today’s big businesses started small. The largest company in the nation based on revenue is Walmart, which boasts annual revenues approaching $650 billion across more than 10,500 stores; however, it began as a single store in Rogers, Arkansas, in 1962. Amazon, the second-largest company by revenue, reported nearly $575 billion in revenue last year – not bad for the original online marketplace for books founded in a garage in Bellevue, Washington, in 1994.
Nevada is no different. Of the nearly 104,000 businesses in the Silver State, approximately 99.8 percent comprise businesses with fewer than 500 employees. And, when considering a narrower view of small businesses, companies with less than 50 employees still account for 95.9 percent of the state’s businesses. The overall share of jobs sourced to small businesses also tracks closely with national averages.
While small businesses’ economic contributions are immense, their views about where the market stands, expectations for the future, and areas of concern and optimism are critically insightful. Each year, Applied Analysis has the privilege of surveying Nevada small businesses on behalf of Nevada State Bank to gauge owners’ and executives’ perceptions and evaluate the pulse of business trends. While the official results will be released in the coming days, several insightful trends demonstrate that the business community is optimistic about the future.
This year, optimism about the direction of the state of Nevada reached a four-year high, with 71 percent of small business owners indicating that the Nevada economy is headed in the right direction. This reflects a jump from the past several years, when the fall-out of a global health pandemic and response and inflation rates not seen since the 1980s negatively impacted sentiment. The most recent measure approached the 82-percent positivity measure last posted in January 2020.
Small businesses have also reported that revenues and profits increased from the prior year and they remain optimistic that these trends will continue going forward. Approximately 53 percent of small businesses reported rising revenues, while two-thirds (66 percent) believe their revenues will increase again in 2024. Expectations for overall profitability followed suit.
Improvements at the top and bottom line for businesses are also translating into increased investments in people. Nearly half (46 percent) of small businesses reported an increase in their workforce over the last year. This is higher than what survey respondents expected would happen when asked a year ago; at that time, only 37 percent planned to increase their employee base over the next year. This trend will likely continue, as more than half (55 percent) of business respondents anticipate increasing their employee headcounts during the next 12 months.
While many businesses still face day-to-day challenges associated with the cost of goods and services or employee retention, Nevada’s business community appears focused on brighter days ahead. Absent the ingenuity and determination of business owners continuing to invest in themselves and their employees, the economic climate in Nevada would look much different than it does today.
Members of the editorial and news staff of the Las Vegas Review-Journal were not involved in the creation of this content.