MotionMedia - Sample Digital Agency Business Plan

34 © BPlanExperts.com INDUSTRY ANALYSIS In the United States there are nearly 27 million small & medium businesses. Small & Medium business for this purpose is usually defined as a business with fewer than 500 employees. However, of those small businesses, over 20 million are solo players. Of the remaining 5.9 million, the vast majority have fewer than 20 employees. The needs of businesses within that range -- from 1 person to 500 employees -- differ dramatically. Among large corporations that have exhausted their growth in the enterprise market, small businesses are seen as fertile ground for new prospects. Among smaller businesses, often their initial strategy is to serve other small and midsize businesses. Smaller customers are easier to come by because there are more of them. But understanding the small business market can be tricky. That's because it covers a wide range of business needs, and those needs are often (although not always) related to business size. In the United States alone there are nearly 27 million small businesses, according to statistics from the Small Business Administration (SBA). The generally accepted definition of "small business" is under 500 employees. (Although for lending, contracting and other purposes the SBA actually has a variety of size standards depending on the industry). Of those ~27 million small businesses, approximately 20.4 million are solo players. That is, they are single-person businesses. These are what are called "nonemployer" businesses in government terminology, because they have no employees (assuming you do not count the owner). Of businesses considered "employer" businesses, there are 5.9 million as of the 2005 U.S. Census -- the latest figures available. Of these, the vast majority, or 5.3 million, has fewer than 20 employees. For the full breakdown, visit this chart from the SBA's Office of Advocacy for employer business statistics. When you add the totals of the nonemployer (single person) businesses and those businesses that have employees, that's how you get to nearly 27 million small businesses in the United States.