Small Business Profile: INDIANA
In Indiana, small businesses are vital to the financial wellbeing of the state’s economy. Their contribution is essential for economic growth since they make up almost all employer firms in the state. As entrepreneurs and innovators, small business owners represented a diverse group in 2004 and continued to keep the state’s economy productive. The Small Business Profile provides information on the performance of small businesses in the state using the most current federal data available. Number of Businesses. There were an estimated 451,437 small businesses in Indiana in 2004.1 Of the 125,746 firms with employees, an estimated 97.6 percent, or 122,716, were small firms. In 2004, the estimated number of employer businesses increased by 0.5 percent. The number of selfemployed persons (including incorporated) decreased overall by 7.2 percent, from 287,665 in 2003 to 267,017 in 2004. Non-employer businesses numbered 328,721 in 2002, an increase of 1.7 percent since 2001, based on the most recent data available. (Sources: U.S. Dept. of Labor, Employment and Training Administration; U.S. Dept. of Commerce, Census Bureau; U.S. Dept of Labor, Bureau of Labor Statistics.) Women-Owned Businesses. In 2002 women-owned firms totaled 118,950, an increase of 11 percent from 1997, and generated $16.6 billion in revenues. Firms owned jointly by women and men numbered 57,546 with revenues of $13.3 billion. Women represented 38.8 percent of the selfemployed persons in the state. (Sources: U.S. Dept. of Labor, Bureau of Labor Statistics; U.S. Dept. of Commerce, Census Bureau.) Minority-Owned Businesses. In 2002, Hispanic-owned firms numbered 5,487, an increase of 28 percent from 1997. Black-owned firms numbered 14,062, an increase of 27 percent; Asian-owned firms numbered 6,088, an increase of 30 percent; American Indian and Alaska Native-owned firms numbered 1,974, a decrease of 32 percent; and there were 127 Native Hawaiian and other Pacific Islander-owned businesses.2 (Source: U.S. Dept. of Commerce, Census Bureau.)
1 The Office of Advocacy’s estimate of the total number of state small businesses is based on the percent of small businesses (2002 Census Bureau firm size data) multiplied by the total number of employer businesses in 2004 (Employment and Training Administration). To this total is added the 2002 number of non-employer firms (Census Bureau). See Business Estimates from the Office of Advocacy, www.sba.gov/advo/research/rs258tot.pdf. 2 Minority owners may be in more than one minority group.
Business Turnover. There were an estimated 13,906 new employer businesses in 2004, 3.4 percent more than the previous year. Business terminations numbered 15,282 in 2004, an increase of 1 percent. Business bankruptcies decreased by 18.1 percent and totaled 524 in 2004. (Sources: U.S. Dept. of Labor, Employment and Training Administration; Administrative Office of the U.S. Courts; U.S. Dept. of Commerce, Census Bureau.) Employment. Small firms with fewer than 500 employees numbered 113,234 in 2002 and employed 1,253,842 individuals, or 49.8 percent of the state’s non-farm private sector (Table 1).3 Net job gains among firms with fewer than 20 employees totaled 13,352, while large firms with 500 or more employees lost 64,889 jobs between 2001 and 2002 (Table 2). (Source: U.S. Dept. of Commerce, Census Bureau, Statistics of U.S. Businesses.) Small Business Income. Non-farm proprietors’ income, a partial measure of small business income, increased by 11.5 percent, from $11.8 billion in 2002 to $13.2 billion in 2003. (Source: U.S. Dept. of Commerce.) Finance. Commercial bank lenders are an important source of small business loans, and small firms usually rely on them for financing. Over the last 10 years the number of banks in Indiana has declined (Table 3). The Office of Advocacy has identified banks in each state that make the most loans to small businesses. This information is available in its banking studies at www.sba.gov/advo/research/lending.html.
_______________________________________________ To learn more about the Office of Advocacy’s data and analyses of small business, visit www.sba.gov/advo/research, call (202) 205-6533 or email advocacy@sba.gov. Sign up at http://web.sba.gov/list for email delivery of: • Advocacy Newsletter • Advocacy Press • Advocacy Regulatory News • Advocacy Research For Really Simply Syndicated (RSS) feeds, visit www.sba.gov/advo/rsslibrary.html.
3
The number of employers in Table 1 is not directly comparable to the figures in the Number of Businesses section due to different data sources.
Small Business Profile: Indiana, Page 1 of 2
Published in 2005 by the U.S. Small Business Administration, Office of Advocacy
Table 1. Firms and Employment in Indiana by Industry and Firm Size, 2002 (Thousands)
Industry Non-employer firms Employer firms Total < 100 110.32 0.25 0.19 0.19 15.43 6.71 6.15 14.52 3.95 1.01 4.72 4.35 10.99 0.22 5.27 1.09 9.57 1.85 8.17 15.82 0.03 0.31 < 500 113.23 0.25 0.20 0.19 15.58 7.36 6.53 14.84 4.07 1.07 4.87 4.44 11.15 0.44 5.45 1.15 9.94 1.89 8.41 15.97 0.06 0.31 Total 2,517.18 1.88 5.69 15.32 137.09 551.56 113.49 344.67 86.77 46.16 106.64 35.54 93.52 45.66 136.59 50.18 332.09 39.35 222.57 132.29 19.70 0.43 Employment < 100 876.74 * * 2.29 100.27 104.95 53.19 119.57 28.13 9.25 26.62 19.3 58.07 1.95 36.33 11.66 83.95 17.5 100.4 100.23 * * < 500 1,253.84 * * 3.26 121.02 194.16 71.91 146.31 37.44 15.22 42.55 25.57 70.51 10.27 58.65 20.84 154.33 22.92 138.08 114.62 1.04 0.43
Total 328.72 116.03 Agriculture, forestry, fishing, and hunting 2.98 0.26 Mining 0.71 0.23 Utilities 0.28 0.21 Construction 43.88 15.65 Manufacturing 5.76 8.03 Wholesale trade 3.17 7.01 Retail trade 43.94 15.32 Transportation and warehousing 17.83 4.25 Information 9.14 1.20 Finance and insurance 11.51 5.12 Real estate; rental and leasing 34.18 4.54 Professional, scientific, and technical services 36.64 11.35 Management of companies and enterprises N/A 0.70 Admin., support, waste mgmt. and remed. svces. 22.63 5.69 Educational services 6.07 1.19 Health care and social assistance 24.42 10.15 Arts, entertainment, and recreation 13.46 1.92 Accommodation and food services 3.42 8.61 Other services 51.69 16.09 Auxiliary, except corp., subsidiary, and regional managing offices N/A 0.18 Unclassified N/A 0.31 *Data suppressed to protect the confidentiality of individual firms. N/A= not available Source: U.S. Department of Commerce, Census Bureau, Statistics of U.S. Businesses.
Table 2. Non-farm Establishment Job Gains and Losses by Firm Size in Indiana, 2001–2002 (Thousands)
Firm size (number of employees) Total Job gains: New establishments Expanding establishments Job losses: Downsized establishments Closed establishments Net change in employment 151.24 219.39 -323.45 -130.04 -82.87 1–19 34.09 60.73 -46.66 -34.81 13.35 1–499 85.3 127.85 -157.97 -73.16 -17.98 500+ 65.94 91.54 -165.48 -56.89 -64.89
Source: U.S. Department of Commerce, Census Bureau, Statistics of U.S. Businesses.
Table 3. Number of Banks in Indiana by Asset Size, 1995–2004, Selected Years
Number of banks per year 1995 215 2001 155 2002 154 2003 149 2004 145 Below $100M 46 Number of banks by asset size, 2004 $100M–$500M 73 $500M–$1B 14 $1B–$10B 11 Over $10B 1
Source: U.S. Small Business Administration, Office of Advocacy, from data collected by the Federal Reserve Board. The full list of small-business-friendly banks can be found on the Office of Advocacy website, www.sba.gov/advo/research/lending.
Small Business Profile: Indiana, Page 2 of 2 Published in 2005 by the U.S. Small Business Administration, Office of Advocacy