Small Businesses With 0-9 Employees: 2020 data is out, but reflects first-quarter only

By Scott Richter and Dr. Patrick Jones

It does not require the nose of a data hound to know small businesses across the U.S. have been challenged by the pandemic. While the lockdown allowed some businesses to stay open with new rules such as patron limits, it forced other non-essential businesses to close entirely. Restaurants, for example, could stay open to offer pick-up services, but with Covid-19 initially having many unknowns associated with transmissibility and lethality, legitimate fears of would-be patrons kept many away. This put even more strain on businesses allowed to remain open.

Of course, some businesses thrived and new ones were born during 2020, yet these were probably more exception than rule. While it is too early for these data to show the financial impact of Covid-19 on small businesses, anecdotally our assumptions are likely to be conservatively within the ballpark.

However, looking at Walla Walla Trends Indicator 1.2.6: Total & Share of Small Businesses (0-9 employees), we see that the total number decreased from 1,813 in early 2019 to 1,800 in early 2020. Their share of all businesses decreased from 82.6% to 82.3%. While no one reading this article will think the loss of 13 small businesses (or any, for that matter) is acceptable, another 1,800 were able to survive in arguably one of the toughest years in recent history for local small businesses everywhere. Yet, these data reflect just the first quarter of each year, so it remains to be seen whether there were further losses throughout the year.

From the beginning of the series in 2003 through 2020, the cumulative number of businesses decreased by just 19. This statement overlooks the losses of 259 businesses from 2014 to 2015 and the 372 lost from 2017 to 2018, the latter of which regained the 372 lost and picked up an additional 39 small businesses for a total of 411 by 2019. Since 2003, the share of small businesses out of all businesses has decreased slightly in the county, and Washington State. The share is still a bit higher in Walla Walla County than the state.

We do not know what, if any, government programs helped maintain businesses through 2020, or their financial outlook for 2021. In a normal, non-pandemic year, the first-quarter totals provide a decent baseline for the remaining three-quarters, but 2020 could be a likely anomaly once those data become available.

To be precise, this measures the number of small businesses, or firms. It does not count the number of establishments because a single business can have multiple establishments within their operations. One way to think of the difference is a fast-food business typically will have multiple establishments operating in an area, even within smaller populated areas such and Walla Walla County.

While small businesses across the U.S. account for more than 99% of all businesses with less than 500 employees, according to the Small Business & Entrepreneurship Council, create the majority of new jobs, and are more likely to develop emerging technologies than big businesses.

While businesses with 0-9 employees consistently has a higher share of total businesses in Walla Walla County compared to the state, there is perhaps less to strengthen and buttress small businesses in the county. So as the number of Covid-19 vaccines administered continues to grow and the lockdown subsides, you already know who your favorite small businesses are – make plans to visit them ASAP, if you care about them surviving.

If you would like to see historical business-related data specific to Walla Walla County, check out these links from the U.S. Census Bureau Business Dynamics Statistics for years 1978 to 2018: