State of Small Business in Austin

Palmer Events CenterAustin, TX

September 25, 2014

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• Population change (nom) 10

• Population growth (%) #2• Job change (nom)

#8• Job growth (%)

#1• GRP change (nom) #21• GRP growth (%)

#3

Austin rank among U.S. metros since 2000

Austin-Round Rock MSASource: U.S. Census Bureau, Population Estimates. U.S. Bureau of Labor Statistics, Current Employment Statistics. U.S. Bureau of Economic Analysis. Jobs are from July 2000 to July 2014. GRP is from 2001 to 2013 (2000 not available). Growth rankings (%) are among large MSAs.

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• 31,118 firms 91%• 228,414 jobs

35% • $9.2B payroll 29%• $19.8B gross sales 23% • $6.4B taxable sales 24%

Economic Impact of Small Businesses in Austin MSA (< 100 employees)

Austin-Round Rock MSA, 2011Source: U.S. Census Bureau, Statistics of U.S. Businesses. Includes businesses w/ at least 1 paid employee.

Small business sales estimated from 2007 Economic Census and distribution by industry using data reported by the Texas Comptroller.

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Firms % Total Emp % Total Payroll ($Th) % Total

Small (< 100) 31,118 91% 228,414 35% $9,209,354 29%

Medium (100-499) 1,124 3% 91,998 14% $4,421,564 14%

Large (500+) 1,787 5% 333,205 51% $17,951,654 57%

Total 34,029 100% 653,617 100% $31,582,572 100%

Most businesses are small businesses

Austin-Round Rock MSA, 2011Source: U.S. Census Bureau, Statistics of U.S. Businesses.

Small businesses make up a greater share of total employment in Austin (35%) than in Houston (31%), Dallas (30%), San Antonio (30%), and U.S. (34%).

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Firms % Total Employment % Total Payroll ($Th) % Total

≤ 4 19,168 56% 31,340 5% $1,461,576 5%

5-9 5,166 15% 33,602 5% $1,269,385 4%

10-19 3,385 10% 44,470 7% $1,733,185 5%

20-99 3,399 10% 119,002 18% $4,745,208 15%

100-499 1,124 3% 91,998 14% $4,421,564 14%

500+ 1,787 5% 333,205 51% $17,951,654 57%

Total 34,029 100% 653,617 100% $31,582,572 100%

Majority of businesses in Austin MSA have ≤ 4 employees but only 5% of total jobs

Austin-Round Rock MSA, 2011Source: U.S. Census Bureau, Statistics of U.S. Businesses.

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Construction 57%Prof/Tech Services 48%

Real Estate 48%Accommod/Food Svcs 47%Arts & Entertainment 46%

Educational Services 46%Manufacturing 30%

Small businesses are ≥ 25% jobs in 13 of 20 industry sectors in Austin MSA economy

Austin-Round Rock MSA, 2011Source: Census, SUSB. Shows small business employment as share of total employment by industry. Company examples provided by ARMA.

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Religious, grant, civic, prof orgs 80%Fabricated metal product mfg 67%Performing arts, spect sports 66%

Specialty trade contractors 60%Construction of buildings 59%

Food manufacturing 54%Truck transportation 52%

Selected industries with majority jobs in small businesses in Austin MSA

Austin-Round Rock MSA, 2011Source: U.S. Census Bureau, Statistics of U.S. Businesses. Shows small business employment as share of total employment by

industry.

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Small business employment in Austin MSA grew by 21% during 2001-2011

Austin-Round Rock MSASource: U.S. Census Bureau, Statistics of U.S. Businesses

Firms Employment

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

1%

-4%

27%

21%

% Change, 2001-2011U.S.Austin Small businesses grow,

on average, by about 650 firms and 4,000 employees in Austin

MSA every year.

Dal 45%Aus 21%Hou 19%SA 17%

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Austin MSA accelerated quickly out of the recession—thanks to small businesses

Small (< 100) Medium (100-499) Large (500+)-6,000

-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,0008,415

3,297

-4,177

Employment Change by Business Size2009-2011

Austin-Round Rock MSA Source: U.S. Census Bureau, Statistics of U.S. Businesses

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Job Change2009-11

Job Growth2009-11

Chemical manufacturing 184 144%

Support activities for mining 211 46%

Nursing and residential care facilities 479 24%

Computer and electronic product manufacturing 247 21%

Machinery manufacturing 119 20%

Food services and drinking places 4,668 15%

Performing arts, spectator sports, related industries 140 13%

Personal and laundry services 488 9%

Ambulatory health care services 1,414 9%

Nonstore retailers 132 9%

Top industries ranked by job growth (%)in small businesses in Austin MSA

Austin-Round Rock MSASource: U.S. Census Bureau, Statistics of U.S. Businesses. Includes top 10 industries adding 100 or more jobs during 2009-2011.

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OwnershipAvg SalesPer Firm

Comparisonto U.S.

Avg EmpPer Firm

Avg PayPer Emp

Productivity(Sales Per Emp)

Asian $2,592,720 +127% 7 $27,334 $359,886

White $2,046,578 +1% 11 $35,216 $181,631

Black $1,259,555 +38% 8 $26,197 $152,624

Non-Hispanic $2,185,225 +10% 11 $35,231 $194,313

Hispanic $739,713 -34% 7 $27,237 $101,354

Male-owned $2,741,314 +12% 13 $36,665 $212,837

Female-owned $966,209 -13% 8 $33,115 $123,594

All firms $6,347,112 +25% 20 $42,943 $311,415

Austin-Round Rock MSA, 2007Source: U.S. Census Bureau, Survey of Business Owners. Includes only firms with paid employees.

Disparity in business performance by ownership in Austin MSA—concern?

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Employment2013Q2 ATX

Average Wage2013Q2 ATX

Affordable HousingMax Monthly Cost

Average Wage2013Q2 TX

Asian 40,044 $69,096 $1,727 $62,808

White 509,218 $61,284 $1,532 $53,496

Black 83,811 $38,904 $973 $37,848

Hispanic 226,050 $38,388 $960 $37,212

How can small business development be leveraged to promote inclusive growth?

Austin-Round Rock MSASource: U.S. Census Bureau, Quarterly Workforce Indicators. Maximum monthly

cost for affordable housing is calculated at 30% average wage.

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Where do we go from here?

• Data availability is a challenge—locally produced data would improve ability to evaluate efforts, measure progress, and quickly identify new opportunities.

• Small businesses are significant portion of economy but often are overlooked in economic development—City of Austin is leading advocate changing debate & should continue telling this story.

@civicanalytics

http://civicanalytics.com

866-512-3835

brian@civicanalytics.com

7600 Burnet RoadSuite 108Austin, TX 78757