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How many small (physical) businesses are in the USA?(note - "small (physical) business" for the purpose of this request means any business with <=30 employees and with <=5 physical location(s), be it a store, an office, or otherwise, where customers are served)
Hello! Thanks for your question about small businesses in the USA that have a physical presence. The short answer is that there are 4,648,529 employers with 1-19 employees and 5,059,795 with 1-49 employees. If we also include non-employers (but continue to exclude home business) and hold strictly to 1-29 than we get 14,717,670 businesses.
Below you will find a deep dive of my findings.
METHODOLOGY
To answer this question I conducted a general media survey to identify whether such data currently existed. I found that the US Census Bureau does provide enough data to triangulate your request, so I have done so below.
Based on the sources that I found, I can triangulate the exact answer that you're looking for based on a number of assumptions (however, this will likely be less accurate). Alternatively, there is hard data that provides useful information for you, but which is not exactly within the parameters you were looking for. I will provide both sets of data before and label the sections (COMPLEX/SIMPLE).
SIMPLE CALCULATION
The US Census Bureau provides comprehensive statistics on businesses by size, which we can use to determine your desired information. Unfortunately, though, businesses are divided according to 1-4 employees, 5-9, 10-19 or 20-49, and not 1-30. These figures also do not include businesses that only employ the owner (known as non-employers).
That said, based on your purpose, I think this data should be sufficient so I will give you some information below based on the basic US Census Data. As mentioned, I have also conducted some more extensive calculations in order to provide a more exact answer to your question; however, these require a number of estimates, so may be less accurate (see below, marked COMPLEX).
The US Census Bureau divides firms into 8 categories: Agriculture, Forestry, and Fishing; Mining; Construction; Manufacturing; Transportation, Communication, and Public Utilities; Wholesale Trade; Retail Trade; Finance, Insurance, and Real Estate; and Services. The latter four categories, are those that I think are most likely to fit your interests (i.e. needing security cameras).
Based on 2014 data (the most recent available), there are the following total number of small businesses, with the number in brackets representing those that fall under the latter four categories:
Below you will see my more extensive calculations.
NON-EMPLOYERS (COMPLEX)
The US Census Bureau makes a definition for non-employers (firms that have a single owner/operator and no employees), and these companies are excluded from other types of business statistics (such as that used above). While many of these non-employer businesses likely operate from home, there are also some that do have physical locations.
According to Forbes, some 52% of small businesses are home-based, and in 2014 (the latest available data) the US Census Bureau reported that there were a total of 23,836,937 non-employer businesses. This means that there are a total of 11,441,730 non-employers that do have physical locations other than their home.
EMPLOYERS (COMPLEX)
In terms of firms that employ at least one employee, the US Census Bureau divides these into the following employee categories (1-4, 5-9, 10-19, 20-49), as mentioned above. Within the 1-4 category, it is possible that there are still some home-based businesses here, so we will apply the same calculation as above: 2,901,041 firms x 48% = 1,392,500 of businesses with 1-4 employees are not home based.
We can add this total to the number 5-9 employees (1,086,089) and 10-19 employees (661,399); however, we need to split the 20-49 employee grouping. Unfortunately there is no way to know how many of the firms within this group fall into each category, so I will split the total into thirds (20-29, 30-39 and 40-49), so 411,266 * 33.3% = 136,952 firms that have 20-29 employees.
This gives us a grand total of firms with <=30 employees and a physical location as 11,441,730 +1,391,500 + 1,086,089 + 661,399 + 136,952 = 14,717,670.
SMALL BUSINESSES LIKELY TO BUY SECURITY CAMERAS (COMPLEX)
In order to further narrow this total to identify those businesses likely to buy security cameras, I will divide this total by sector.
Unfortunately sector data for non-employers is not available, so I will need to make a rough breakdown by sector according to the employers data, and then apply this to the overall total as calculated above. As mentioned, employer data is divided into the following categories: Agriculture, Forestry, and Fishing; Mining; Construction; Manufacturing; Transportation, Communication, and Public Utilities; Wholesale Trade; Retail Trade; Finance, Insurance, and Real Estate; and Services.
For the purposes of this calculation, I will use the final four categories as those that are likely to require security cameras. Because the employer data, only includes 20-49 as mention before, I will only include a third of this in my calculations.
Of employers with 1-30 employees, there are a total of 292,327 wholesale small businesses, 842,478 retail small businesses, 449,313 financial businesses, and 2,275,129 services businesses, for a grand total of 3,859,247 small businesses that could potentially require security cameras. This represents 84.2% of all small employers (1-30 employees).
If we apply this figure to our total business number above (which included the non-employers), this gives us a total of 12,392,278 small businesses potentially in need of security cameras.
CONCLUSION
To wrap it up, depending on whether you include non-employers or not in your market sizing estimate will have a major impact on the total number of potential customers. I personally would be inclined to exclude these, and go with the simple calculations that I've done above that are more directly based on US Census Bureau data, as it is more concrete and relies on fewer estimates. That said, hopefully the other data can also provide some use to you.
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