CALIFORNIA
3.9 million
Small Businesses
7.0 million
Small Business Employees
99.8%
of California Businesses
48.8%
of California Employees
EMPLOYMENT
283,452
net new jobs
DIVERSITY
1.6 million
minority-owned
businesses
TRADE
70,350
small business
exporters
OVERALL CALIFORNIA ECONOMY
In the third quarter of 2017, California grew at an annual rate of 3.4%, which was the same as the overall US growth rate.
California’s 2016 growth rate of 3.3% was down from the 2015 rate of 4.4%. (Source: BEA)
In January 2018, the unemployment rate was 4.4%, down from 5.2% in January 2017. This was above the January 2018
national unemployment rate of 4.1%. (Source: CPS)
EMPLOYMENT
Figure 1: California Employment by Business Size
(Employees)
fewer than 20
20 to 99
100 to 499
more than 500
0
5M
10M
2000 2005 2010 2015
California small businesses employed 7.0 million people, or
48.8% of the private workforce, in 2015. (Source: SUSB)
Firms with fewer than 100 employees have the largest share
of small business employment. Figure 1 provides further
details on firms with employees. (Source: SUSB)
Private-sector employment increased 1.9% during the 12-
month period ending in January 2018. This was above the
increase of 1.5% during the prior 12-month period. (Source:
CPS)
The number of proprietors increased in 2016 by 2.7% rela-
tive to the previous year. (Source: BEA)
Small businesses created 283,452 net jobs in 2015. Firms
employing fewer than 20 employees experienced the largest
gains, adding 174,952 net jobs. The smallest gains were
in firms employing 100 to 499 employees, which added
53,170 net jobs. (Source: SUSB)
The Small Business Profiles are produced by the US Small Business Administration’s Office of Advocacy. Each report incorporates the most up-to-date
government data to present a unique snapshot of small businesses. Small businesses are defined for this profile as firms employing fewer than 500
employees. Net small business job change, minority small business ownership, and exporter share statistics are based on the 2015 Statistics of US
Businesses (SUSB), 2012 Survey of Business Owners (SBO), and 2015 International Trade Administration (ITA) data, respectively.
SBA Office of Advocacy 21 California Small Business Profile, 2018
Male
F
emale
Nonminor
ity
Minor
ity
Non
veteran
V
eteran
Some
other race
Nativ
e American-Alaskan
Hispanic
Ha
waiian-Pacific Islander
Asian
Afr
ican American
All
Firms
0 2 4 6 8 10
INCOME AND FINANCE
The number of banks decreased by 11 between June 2016 and June 2017 to 174 banks. (Source: FDIC)
In 2016, 941,892 loans under $100,000 (valued at $13.5 billion) were issued by California lending institutions reporting
under the Community Reinvestment Act. (Source: FFIEC)
The median income for individuals self-employed at their own incorporated businesses was $57,420 in 2016. For individuals
self-employed at their own unincorporated firms, this figure was $25,034. (Source: ACS)
Median income represents earnings from all sources. Unincorporated self-employment income includes unpaid family workers, a very small percent of
the unincorporated self-employed.
EMPLOYER BUSINESS OWNER DEMOGRAPHICS
Figure 2: California Employees per Business by Owner’s Demographic, 2015
Figure 2 shows the average number of employees per employer business by owner’s demographic group according to the Annual Survey of Entrepreneurs
(ASE).
TURNOVER AMONG ESTABLISHMENTS WITH EMPLOYEES
Figure 3: California Quarterly Startups and Exits
30K
35K
40K
45K
1995 2000 2005 2010 2015
startups exits
In the third quarter of 2016, 47,250 establishments started
up, generating 135,472 new jobs in California. Startups are
counted when business establishments hire at least one
employee for the first time. (Source: BDM)
In the same period, 34,630 establishments exited resulting
in 107,257 jobs lost. Exits occur when establishments go
from having at least one employee to having none, and then
remain closed for at least one year. (Source: BDM)
Figure 3 displays quarterly startups and exits from 1992 to
2016. Each series is smoothed across multiple quarters to
highlight long-run trends. (Source: BDM)
The BLS data covers only business establishments with employees. BLS
refers to startups as births and exits as deaths. These terms are distinct
from the BLS openings and closings categories. Openings include sea-
sonal re-openings and closings include seasonal shutterings. Quarterly
startup and exit values may not align with Figure 3 due to smoothing.
SBA Office of Advocacy 22 California Small Business Profile, 2018
INTERNATIONAL TRADE
A total of 73,528 companies exported goods from California in 2015. Of these, 70,350, or 95.7%, were small firms; they
generated 43.2% of California’s $152.1 billion in total exports. (Source: ITA)
SMALL BUSINESS EMPLOYMENT BY INDUSTRY AND COUNTY
Table 1: California Employment by Industry, 2015
Industry
Accommodation and Food Services
Health Care and Social Assistance
Professional, Scientific, and Technical Services
Manufacturing
Retail Trade
Construction
Wholesale Trade
Other Services (except Public Administration)
Administrative, Support, and Waste Management
Educational Services
Real Estate and Rental and Leasing
Finance and Insurance
Transportation and Warehousing
Information
Arts, Entertainment, and Recreation
Management of Companies and Enterprises
Agriculture, Forestry, and Fishing and Hunting
Mining, Quarrying, and Oil and Gas Extraction
Utilities
Industries not classified
Total
Small Business
Employment
1,017,850
886,496
689,638
619,509
597,980
569,882
516,385
469,936
422,106
217,156
203,671
195,866
172,203
167,977
167,405
44,915
19,658
8,640
4,871
4,050
6,996,194
Total Private
Employment
1,609,306
1,873,857
1,258,225
1,162,646
1,690,005
686,757
854,203
575,034
1,389,206
414,712
286,606
591,037
486,149
684,853
332,743
315,604
26,336
24,380
59,668
4,050
14,325,377
Small Business
Employment Share
63.2
47.3
54.8
53.3
35.4
83.0
60.5
81.7
30.4
52.4
71.1
33.1
35.4
24.5
50.3
14.2
74.6
35.4
8.2
100.0
48.8
Figure 4: California Small Business Employment by County, 2015
Small Business
Employment (%)
41
to 51
51 to 59
59
to 70
70
to 100
SBA Office of Advocacy 23 California Small Business Profile, 2018
SMALL BUSINESSES BY INDUSTRY
Table 2: California Small Businesses by Industry and Firm Size, 2015
Industry
1-499 Employees
1-20 Employees Nonemployer
Total Small Firms
Firms
Professional, Scientific, and Technical Services 112,446 104,922 548,841 661,287
Health Care and Social Assistance 90,191 82,057 270,162 360,353
Retail Trade 69,266 63,031 236,204 305,470
Construction 68,623 62,392 222,031 290,654
Other Services (except Public Administration) 66,292 61,262 489,079 555,371
Accommodation and Food Services 63,456 49,241 46,460 109,916
Wholesale Trade 50,495 43,661 62,926 113,421
Real Estate and Rental and Leasing 41,346 39,350 324,150 365,496
Administrative, Support, and Waste Management 36,101 31,524 251,710 287,811
Manufacturing 35,088 27,151 47,837 82,925
Finance and Insurance 28,170 26,195 87,348 115,518
Arts, Entertainment, and Recreation 22,276 20,434 210,277 232,553
Transportation and Warehousing 18,373 16,102 241,833 260,206
Information 15,903 13,989 61,246 77,149
Educational Services 12,112 9,498 88,655 100,767
Agriculture, Forestry, and Fishing and Hunting 1,815 1,587 12,994 14,809
Mining, Quarrying, and Oil and Gas Extraction 540 436 3,616 4,156
Utilities 477 419 1,589 2,066
Total 734,243 656,542 3,206,958 3,941,201
Figure 4 and Tables 1 and 2 display data from the 2015 SUSB. Table 2 includes additional data from the 2015 Nonemployer Statistics (NES).
REFERENCES
The Small Business Profiles, source data, and methodology are available at https://go.usa.gov/xQT4w.
ASE Annual Survey of Entrepreneurs, US Census Bureau
BEA Bureau of Economic Analysis, US Department of Commerce
BDM Business Employment Dynamics, BLS
BLS Bureau of Labor Statistics, US Department of Labor
CPS Current Population Survey, BLS
FDIC Call Reports, Federal Deposit Insurance Corporation
FFIEC Federal Financial Institutions Examination Council
ITA International Trade Administration, US Department of Commerce
NES Nonemployer Statistics, US Census Bureau
SBO Survey of Business Owners, US Census Bureau
SUSB Statistics of US Businesses, US Census Bureau
SBA Office of Advocacy 24 California Small Business Profile, 2018