FRANKFORT – Did you know that two-thirds of new jobs in the U.S. each year are created by small businesses, with over half of Americans either owning or working for one of these small (but mighty) companies? It’s true, according to the U.S. Small Business Administration, which helps small businesses be competitive both here in the U.S. and across the globe.
In Kentucky, 96.5 percent of businesses with employees were classified as small businesses — or businesses with fewer than 500 employees — according to a 2015 SBA profile of Kentucky. Most of those small businesses in 2012, or 80 percent, were “non-employers,” meaning the owners also ran the business. Of those with employees, many had fewer than 20.
Let’s look a little bit deeper into this by the numbers, provided by the SBA:
— Around 1.48 million people were employed in the private sector in Kentucky in 2012.
— Kentucky had 340,746 small businesses that year which employed 46.3 percent of private sector workers in the Commonwealth.
— The number of workers employed by small businesses in Kentucky in 2012 totaled 686,517, with most employees working at firms with fewer than 100 employees.
— The retail, health care and social assistance, professional, food service and construction industries were where most workers in small businesses with fewer than 500 employees worked in 2012, according to the SBA. The most active industries for small businesses with fewer than 20 workers were retail trade, professional and technical, and health care and social assistance.
— Construction, administrative support, professional and technical firms and retail trade were the top industries among non-employer firms in 2012, according to the SBA.
— Of all firms and employers in the state, by industry and size, health care and social assistance companies employed the most people at 251,737 in 2012; the second largest employer was manufacturing with 210,479 workers. The third-largest was retail trade with 202,648 workers, followed by accommodation and food service (154,807), administrative support (96,074), and transportation and warehousing (84,076).
As far as government goes, your Kentucky General Assembly has done much in recent years to make starting a business easier in the Commonwealth. Most notably is the 2011 General Assembly’s establishment of the Kentucky One Stop Business Portal — an online checklist and registration system that puts starting a small business literally at your fingertips. The Business Portal, launched in late 2011, is overseen by the Secretary of State’s Office. You can find it at onestop.ky.gov.
Legislation related to the Business Portal that we lawmakers have passed since 2011 include, also notably, 2013 House Bill 343. This is the legislation that requires consolidation of the multiple ID numbers a business uses when filing with state agencies. Businesses registered with the state will be assigned a new single business ID number as a result of the law, with the ID number shared among the Secretary of State’s Office, Finance and Administration Cabinet, the Cabinet for Economic Development, Education and Workforce Development Cabinet, and Office of Technology. It’s a great idea for efficiency in government and in business.
All of this business innovation, and re-innovation, in the Commonwealth is not lost on the larger world of business or government. The SBA announced recently that it is actually rebranding its agency’s acronym to stand for “Smart, Bold and Accessible” to show that it, too, can adapt to changing trends. I believe the innovation we are seeing in Kentucky is working. If you don’t believe me, look at 2014 survey results released by Thumbtack.com and the Kauffman Foundation. Those surveys, according to an article at CNN Money, judged the Bluegrass State as the state with “the most improved environment for small businesses.”
I do see a bright future for Kentucky small businesses and Kentuckians overall. I hope that you do, too.
You’ll be hearing from me next week on legislative issues being considered during the second part of the 2017 session of the Kentucky General Assembly that reconvenes on Tuesday, February 7. If you need to reach me on a particular topic of concern, you may do so by calling the Legislative Message Line toll-free at 1-800-372-7181 or email me at [email protected].
State Rep. Rick Rand represents the state’s 47th House District in Carroll, Gallatin, Henry and Trimble counties.