It is difficult for small businesses to survive in general and in New York State that reality is even more stark, yet despite all the difficulties, small business growth in New York slightly outpaces the rest of the nation, as per a new report from State Comptroller Thomas P. DiNapoli. Over the last five years for which there is available data (2011-2016), employment at New York’s small businesses rose by 9.2 percent, besting the national average of 8.9 percent. Small business accounted for almost 40 percent of all private sector payroll in the state, to the tune of $212.6 billion as well as over half of all private sector jobs, to the tune of 4.1 million.
The U.S. Small Business Administration primarily defines a small business as one with fewer than 500 employees. Among the more than 465,000 businesses in New York in 2016, 99 percent were classified as a small business. Of those, about two-thirds had fewer than five employees and 81 percent have fewer than ten. Comptroller DiNapoli refers to these as microbusinesses and they provided over 957,000 jobs with total payroll close to $43 billion. New York also has over 1.7 million non-employer businesses, which are businesses largely composed of self-employed individuals.
Companies with four or fewer employees, provided about 488,000 jobs with total payroll of $23.3. Those with 20 to 49 employees provided more than 809,000 jobs, or 10 percent of all private sector employment. These businesses payroll was over $39 billion in 2016. Small businesses with over 200 employees provided 693,000 jobs with payroll of about $43 billion.
Interestingly, small businesses account for most firms in every industry sector. In 2016, over 95 percent of all the firms in each industry sector were small businesses. The three largest sectors are trade, professional services, and leisure activities (construction is the fifth largest sector and transportation is ninth).
The trade sector, at almost 87,000 firms, includes both retail and wholesale establishments ranging from supermarkets to car dealerships and accounted for about 19 percent of all New York small businesses. At 18 percent of all New York small businesses is the professional service sector, which includes accounting and law firms, as well as firms that specialize in computer design. Rounding out the top three and accounting for about 12.6 percent of New York’s small businesses are firms which provide leisure activities such as restaurants and theaters. However, companies that provide leisure activities also provide the lowest average payroll for employees:
Concluding his report, Comptroller DiNapoli reminds New Yorkers of a critical role that his office plays by investing in New York State small businesses through the New York State Common Retirement Fund (CRF). As of February 28, 2019, the CRF has committed $1.8 billion to private equity investment in New York as of February 28, 2019. With $1.2 billion has been invested in 406 companies, mostly in the high-tech sector. Through its lending partnership with the New York Business Development Corporation (NYBDC) over the last year 1,139 loans totaling $393 million have been made to companies providing over 23,000 jobs, about 40 percent of which go to Minority-and Women-Owned Business Enterprises (MWBEs).
Small businesses are the economic backbone of the State. New York would be lost without them. As such, it is encouraging to see small businesses succeed despite all the regulatory and economic obstacles they face. New York legislators must be mindful of these burdens and seek to reduce them as much as possible in order to maintain competitive nationally.