Office of Advocacy A Voice for Small Business Small Business Profile: ALABAMA Small businesses make a significant contribution to the U.S. economy, and in 2003, they were the engine of Alabama’s economic performance. Nationally, half of U.S. non-farm private output and employment is generated by small firms with 500 or fewer employees; in Alabama, small business owners-including women, minorities, and home based individuals-were leaders in the state’s economy in 2003. The Office of Advocacy’s Small Business Profile reports on small businesses in the state using the most currently available data. Number of Businesses. The estimated total number of small businesses in Alabama in 2003 was 313,100. Of the 85,768 employer firms in 2003, 97.2 percent or an estimated 83,400 were small firms. The estimated number of employer businesses decreased by 0.1 percent in 2003. The most recent data available show that non-employer businesses numbered 229,687 in 2001. Self-employment increased by 17.5 percent, from 118,490 in 2002 to 139,208 in 2003. (Source: 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. Self-employment by women increased by 18.2 percent, from 42,882 in 2002 to 50,687 in 2003 and represented 37.3 percent of self-employed persons in the state. Women-owned businesses generated $10.2 billion in revenues, employed 97,966 workers, and constituted 69,500 firms or 24.4 percent of all firms in 1997. (Sources: U.S. Dept. of Labor, Bureau of Labor Statistics; U.S. Dept. of Commerce, Census Bureau.) Minority-Owned Businesses. In 1997, 16.6 percent or 4,700 of the minority-owned businesses in the state were employer firms, and they generated 85.5 percent of the total minority-owned business revenue of $3.2 billion. There were 2,900 Hispanic-owned businesses; 19,100 Black-owned businesses; 3,300 Asian and Pacific Islander-owned businesses; and 3,500 American Indian and Alaskan Native-owned businesses in 1997. (Source: U.S. Dept. of Commerce, Census Bureau.) Business Turnover. The estimated number of new employer businesses was 9,014 in 2003, which is 5.5 percent less than the previous year. Business bankruptcies decreased by 24.7 percent, and totaled 287 in 2003. Business terminations decreased by 9.4 percent and numbered 10,927 in 2003. (Source: 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 businesses with fewer than 500 employees numbered 76,554 in 2001 and employed 794,200 people or 49 percent of the state’s non-farm private workforce (Table 1). Total net employment loss in the state amounted to 32,555 between 2000 and 2001. Of that number, 15,933 are attributable to MSAs (metropolitan statistical areas). During the same time period, firms with fewer than 20 employees gained 6,264 jobs. (Source: U.S. Dept. of Commerce, Census Bureau, Statistics of U.S. Businesses. Note: Urban (MSA) and rural (non-MSA) employment data is available at: www.sba.gov/advo/stats/data.html .) Small Business Income. Small business proprietors’ income in 2003 increased by 7.4 percent, from $9.1 billion in 2002 to $9.7 billion in 2003. (Source: U.S. Dept. of Commerce.) Finance. Small firms typically use commercial bank lenders and rely on local bank services. Over the last five years there has been a gradual decline in the number of banks in Alabama (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 available at www.sba.gov/advo/stats . To learn more about the Office of Advocacy’s research, data, and analyses of small businesses, visit www.sba.gov/advo , call (202) 205-6533 or email advocacy@sba.gov . Sign up at for email delivery of: · Advocacy Communications · Advocacy Newsletter · Advocacy Press · Advocacy Research