Brian Kelsey's luncheon keynote presentation at the City of Austin's Getting Connected 2014 small business forum.

1. State of Small Business
in Austin
Palmer Events Center
Austin, TX
September 25, 2014

2. Austin rank among U.S. metros since 2000
• Population change (nom) 10
• Population growth (%) #2
• Job change (nom) #8
• Job growth (%) #1
• GRP change (nom) #21
• GRP growth (%) #3
Austin-Round Rock MSA
Source: U.S. Census Bureau, Population Estimates. U.S. Bureau of Labor Statistics, Current Employment Statistics. U.S. Bureauof Economic
Analysis. Jobs are from July 2000 to July 2014. GRP is from 2001 to 2013 (2000 not available). Growth rankings (%) are among large MSAs.
2

3. Economic Impact of Small Businesses
in Austin MSA (< 100 employees)
3
• 31,118 firms 91%
• 228,414 jobs 35%
• $9.2B payroll 29%
• $19.8B gross sales 23%
• $6.4B taxable sales 24%
Austin-Round Rock MSA, 2011
Source: U.S. Census Bureau, Statistics of U.S. Businesses. Includes businesses w/ at least 1 paid employee.
Small business sales estimated from 2007 Economic Census and distribution by industry using data reported by the Texas Comptroller.

4. Most businesses are small businesses
Firms % Total Emp % Total Payroll ($Th) % Total
Small (< 100) 31,118 91% 228,414 35% $9,209,354 29%
Medium (100-499) 1,124 3% 91,998 14% $4,421,564 14%
Large (500+) 1,787 5% 333,205 51% $17,951,654 57%
Total 34,029 100% 653,617 100% $31,582,572 100%
Austin-Round Rock MSA, 2011
Source: U.S. Census Bureau, Statistics of U.S. Businesses.
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Small businesses make up a greater share of total employment in Austin (35%)
than in Houston (31%), Dallas (30%), San Antonio (30%), and U.S. (34%).

5. Majority of businesses in Austin MSA have
≤ 4 employees but only 5% of total jobs
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Firms % Total Employment % Total Payroll ($Th) % Total
≤ 4 19,168 56% 31,340 5% $1,461,576 5%
5-9 5,166 15% 33,602 5% $1,269,385 4%
10-19 3,385 10% 44,470 7% $1,733,185 5%
20-99 3,399 10% 119,002 18% $4,745,208 15%
100-499 1,124 3% 91,998 14% $4,421,564 14%
500+ 1,787 5% 333,205 51% $17,951,654 57%
Total 34,029 100% 653,617 100% $31,582,572 100%
Austin-Round Rock MSA, 2011
Source: U.S. Census Bureau, Statistics of U.S. Businesses.

6. Small businesses are ≥ 25% jobs in 13 of 20
industry sectors in Austin MSA economy
Construction 57%
Prof/Tech Services 48%
Real Estate 48%
Accommod/Food Svcs 47%
Arts & Entertainment 46%
Educational Services 46%
Manufacturing 30%
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Austin-Round Rock MSA, 2011
Source: Census, SUSB. Shows small business employment as share of total employment by industry. Company examples provided by ARMA.

7. Selected industries with majority jobs
in small businesses in Austin MSA
Religious, grant, civic, prof orgs 80%
Fabricated metal product mfg 67%
Performing arts, spect sports 66%
Specialty trade contractors 60%
Construction of buildings 59%
Food manufacturing 54%
Truck transportation 52%
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Austin-Round Rock MSA, 2011
Source: U.S. Census Bureau, Statistics of U.S. Businesses. Shows small business employment as share of total employment by industry.

8. Small business employment in Austin
MSA grew by 21% during 2001-2011
% Change, 2001-2011
Austin-Round Rock MSA
Source: U.S. Census Bureau, Statistics of U.S. Businesses
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27%
1% -4%
21%
30%
25%
20%
15%
10%
5%
0%
-5%
-10%
Firms Employment
U.S.
Austin
Small businesses grow,
on average, by about
650 firms and 4,000
employees in Austin
MSA every year.
Dal 45%
Aus 21%
Hou 19%
SA 17%

9. Austin MSA accelerated quickly out of the
recession—thanks to small businesses
Employment Change by Business Size
2009-2011
9
8,415
3,297
-4,177
10,000
8,000
6,000
4,000
2,000
0
-2,000
-4,000
-6,000
Small (< 100) Medium (100-499) Large (500+)
Austin-Round Rock MSA Source: U.S. Census Bureau, Statistics of U.S. Businesses

10. Top industries ranked by job growth (%)
in small businesses in Austin MSA
10
Job Change
2009-11
Job Growth
2009-11
Chemical manufacturing 184 144%
Support activities for mining 211 46%
Nursing and residential care facilities 479 24%
Computer and electronic product manufacturing 247 21%
Machinery manufacturing 119 20%
Food services and drinking places 4,668 15%
Performing arts, spectator sports, related industries 140 13%
Personal and laundry services 488 9%
Ambulatory health care services 1,414 9%
Nonstore retailers 132 9%
Austin-Round Rock MSA
Source: U.S. Census Bureau, Statistics of U.S. Businesses. Includes top 10 industries adding 100 or more jobs during 2009-2011.

11. Disparity in business performance by
ownership in Austin MSA—concern?
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Ownership
Avg Sales
Per Firm
Comparison
to U.S.
Avg Emp
Per Firm
Avg Pay
Per Emp
Productivity
(Sales Per Emp)
Asian $2,592,720 +127% 7 $27,334 $359,886
White $2,046,578 +1% 11 $35,216 $181,631
Black $1,259,555 +38% 8 $26,197 $152,624
Non-Hispanic $2,185,225 +10% 11 $35,231 $194,313
Hispanic $739,713 -34% 7 $27,237 $101,354
Male-owned $2,741,314 +12% 13 $36,665 $212,837
Female-owned $966,209 -13% 8 $33,115 $123,594
All firms $6,347,112 +25% 20 $42,943 $311,415
Austin-Round Rock MSA, 2007
Source: U.S. Census Bureau, Survey of Business Owners. Includes only firms with paid employees.

12. How can small business development be
leveraged to promote inclusive growth?
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Employment
2013Q2 ATX
Average Wage
2013Q2 ATX
Affordable Housing
Max Monthly Cost
Average Wage
2013Q2 TX
Asian 40,044 $69,096 $1,727 $62,808
White 509,218 $61,284 $1,532 $53,496
Black 83,811 $38,904 $973 $37,848
Hispanic 226,050 $38,388 $960 $37,212
Austin-Round Rock MSA
Source: U.S. Census Bureau, Quarterly Workforce Indicators. Maximum monthly
cost for affordable housing is calculated at 30% average wage.

13. Where do we go from here?
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• Data availability is a challenge—locally
produced data would improve ability to
evaluate efforts, measure progress, and
quickly identify new opportunities.
• Small businesses are significant portion
of economy but often are overlooked in
economic development—City of Austin
is leading advocate changing debate &
should continue telling this story.

14. 7600 Burnet Road
Suite 108
Austin, TX 78757
866-512-3835
brian@civicanalytics.com
http://civicanalytics.com
@civicanalytics