SBA Office of Advocacy
Sometimes it’s lonely being a small business person. It can seem a daunting task to discover how many business entities exist in your market, how large they are, what they worry about, or how long they have been in business. An office of the SBA can help you discover the answers to these and many other questions. The U.S. Small Business Administration Office of Advocacy is an independent voice for small business within the federal government.
Part of advocacy’s mission is to conduct, sponsor, and promote economic research that provides an environment for small business health and growth. They publish a monthly Small Business Advocate and an annual Small Business Economy, which this year is available in online tables.
There is a wealth of information about small businesses available on their web site. With a little investigation, you can obtain intelligence about the number of firms in your market, how many competitors you have, and their major concerns.
“As the federal office responsible for examining the contributions and challenges of small businesses in the U.S. economy, we are constantly looking for answers to small business questions—those that intrigue researchers, challenge business organizations, enlighten policymakers, and vex small business owners. Reference materials published annually include small business profiles for each of the 50 states and U.S. territories, quarterly small business indicators, and The Small Business Economy report.”
Another function is a responsibility to examine the impact of new federal regulations on small businesses.
In January 2011, President Obama signed Executive Order 13563, which among other provisions, directed departments and agencies throughout government to review existing significant regulations and consider how best to promote retrospective analysis of rules. Advocacy is currently working with OMB and regulatory agencies to identify regulations where regulatory cost savings can be achieved.
Small Business Profiles for the States and Territories supply data on small businesses in each of the 50 states and the District of Columbia, providing great detail about small businesses at the state level. Topics covered are:
- the number of firms
- demographics of business ownership
- small business income
- business turnover
- industry composition, and
- employment gains and losses by size of business.
To go directly to federal government information on firm size go to Firm Size Data (http://www.sba.gov/advocacy/849/12162) which describes the various series of data from the Economic Census and the Bureau of Labor Statistics.
NEW: Small Business Data Resources
The office recently announced a new research tool for small business researchers and policymakers, a hyperlinked listing of Small Business Data Resources. The new tool lists online databases by government or private sector source, hyperlinks the listings to their websites, and keys them to the small business-related topics on which they provide information. The list of research reports is quite extensive, but can be filtered by topic (e.g. healthcare, veterans, environmental, etc.) and searched by keyword.
- Arranged alphabetically by the creating agency or commercial source, the data resources listing is a hyperlinked chart that graphs content by seven categories: demographics, employment, exports, finance, firm size data, firms/establishments, health, income/sales/expenses, pensions, taxes, and training. The wide range of sources includes the Federal Reserve Board, Bureau of Labor Statistics, the SBA Office of Advocacy, American Express, and Visa.
- Some of the databases are indices*, not lists of statistics as in the U.S. Census (which of course is part of the list). Rather they provide a snapshot of the small business climate.
Perusing these data bases may help a small business planner get some idea of the state of her market, trends, and the position of competitors.
Other sources of interest on the list (and examples of their use) include:
Nonemployer statistics: a survey of revenue-producing businesses with no employees. Because these produce only four percent of national sales, they are not included in majority of the Economic Census tables. I used these tables to search for the number of firms in specific metropolitan areas. For example, I found that Asheville, NC, has more than 6,000 nonemployee construction firms and expanded the NAICS category to find the count for specific trades. This information would be invaluable if you have a business that offers a service or product to one of these niches.
The Medical Expenditure Panel Survey: a set of large-scale surveys of families and individuals, their medical providers, and employers. There are reports on very specific topics, such as “Top Five Most Costly Conditions among the Elderly, Age 65 and Older, 2008: Estimates for the U.S. Civilian Noninstitutionalized Adult Population.” If you have a health care service or product you can learn of sources of payment, what needs exist, and how many patients were treated for these conditions.
The NFIB (National Federation of Independent Business www.nfib.com/) Small Business Economic Trends is a monthly assessment of small business optimism, providing detailed information on business owner’s plans, expectations, and capital spending. This report provides insight into what business owners are thinking NOW and what they expect in the near future. (There are some valuable resources on this web site on such topics as car insurance for employees, payment for overtime, how to get online, and workers’ comp laws.)
Visa Small Business Review: A quarterly report that “monitors the economic confidence of U.S. small business owners by analyzing Visa spend data and responses to a quarterly survey. Small businesses and those serving them can benefit from the trends and insights obtained from Visa’s proprietary research.” The very specific data on business concerns can help service providers target their customers perceived needs—things like finding and keeping good employees. There are also some interesting articles, blogs and other resources on this web site.
National Small Business Association Economic Report: another annual survey of business owners that highlights their growth, plans and outlook.
* from Wikipedia. Index (economics) “In economics–finance, an index is a statistical measure of changes in a representative group of individual data points. These data may be derived from any number of sources, including company performance, prices, productivity, and employment. Economic indices track economic health from different perspectives.
Influential global financial indices such as the Global Dow and the NASDAQ Composite track the performance of selected large and powerful companies in order to evaluate and predict economic trends. The Dow Jones Industrial Average and the S&P 500 primarily track U.S. markets, though some legacy international companies are included. The Consumer Price Index tracks the variation in prices for different consumer goods and services over time in a constant geographical location, and is integral to calculations used to adjust salaries, bond interest rates, and tax thresholds for inflation…”
Note: I find that many novices confuse such indices as the Consumer Price Index. They compare the index for two cities and think that the higher one means that it is more expensive to live there. In fact, the higher index shows how much the cost in that city has changed since the base year.