Small business survivors: Where employers weathered the recession


The SBA Office of Advocacy recently released reams of new state-by-state small business data. Here are some of the interesting takeaways. (J.D. Harrison / The Washington Post)

Hundreds of thousands of entrepreneurs started a new company in 2007, not knowing that the economy was on the verge of collapse. Not surprisingly, more than half of them have already gone out of business.

In a select few states, though, companies defied the odds, with more of them still running than shuttered. So, where are these survivors?

The Dakotas.

In North Dakota, 56 percent of small companies started the year before the recession were still operating in 2012, more than any other state, according to new state-by-state data recently published by the Small Business Administration’s Office of Advocacy. In South Dakota, the survival rate was 55 percent.

Nebraska’s small employers were similarly resilient, with 52 percent still going strong, while Hawaii, Wisconsin, Iowa, Pennsylvania and Massachusetts were the only other states in which more half of small firms started in 2007 were still up and running five years later.

By comparison, only 38 percent of businesses started that year in Idaho and Florida have survived, the lowest rate in the country. Nationwide, out of the more than 650,000 small businesses started in 2007, the survival rate was a mere 45 percent.

Here in the Washington region, the rates were about average, with Maryland at 44 percent, the District at 45 percent and Virginia at 46 percent.

The SBA Office of Advocacy compiles these reports every few years to monitor the growth and composition of the nation’s small businesses. The data is compiled mostly from the Departments of Labor and Commerce.

Here are some other interesting findings from the report.

• States where the most small businesses opened last year: Illinois (73,920), Ohio (33,024), Oklahoma (27,903), Hawaii (21,972) and Washington (13,885).

• States where small businesses are responsible for the largest share of employment: Montana (67.4 percent), Wyoming (62.7 percent), South Dakota (60.5 percent), North Dakota (59.6 percent) and Vermont (59.3 percent).

• States where the largest share of exporters are small businesses: California (95.9 percent), Florida (95.4 percent), New York (94.3 percent), Texas (93.1 percent), and New Jersey (92.4 percent).

• States where the largest share of women are self-employed: Oregon (13.7 percent), Vermont (12.3 percent), Montana (12.0 percent), Idaho (11.9 percent) and Colorado (11.7 percent).

• States where the largest share of military veterans are self-employed: Minnesota (23.1 percent), Montana (22.8 percent), Nebraska (19.9 percent), South Dakota (19.8 percent) and Oklahoma (18.0 percent).

Follow J.D. Harrison and On Small Business on Twitter.

J.D. Harrison covers startups, small business and entrepreneurship, with a focus on public policy, and he runs the On Small Business blog.
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