Issue 18-175 Small Business Profile 2018
October 15, 2018
The Small Business Profile explores the role of small business in B.C. and the sector’s contribution to the economy by examining trends in growth, as well as cross-provincial comparisons for 2016/17.
There were a total of 501,300 businesses in B.C. in 2017: Of these, 493,100 (98 per cent) were small businesses with fewer than 50 employees. Further, 414,300 (83 per cent) businesses in B.C. employed fewer than five employees, and 302,700 (60 per cent) were self-employed individuals with no paid help (zero employees).
Between 2014 and 2017, the number of small businesses in B.C. climbed 7.7 per cent, more than double the national average rate of growth of 3.2 per cent. Much of this growth has been concentrated in urban areas as it is no surprise that the most populous regions are also the ones with the most businesses. The Mainland/Southwest region of B.C. is home to about 64 per cent of small businesses, while Vancouver Island/Coast accounts for 16 per cent of the small business total.
Small businesses in B.C. employed nearly 1.1 million people in 2017, accounting for 54 per cent of private-sector employment. Conversely, the two per cent of larger B.C. businesses employed close to 937,500 people, or 46 per cent of total private employment. Larger firms tend to be more productive due to economies of scale, which supports greater capacity to invest in capital and technology, and also to pay higher salaries. In 2017, the average small business employee earned an annual salary of $43,038, compared to $52,412 for employees of large businesses.
Overall, small business in B.C. accounts for 35 per cent of overall gross domestic product (GDP). Taken together, GDP and employment estimates present a broad measure of productivity, that is labour productivity, or GDP per job.
In 2016, close to 6,900 B.C. businesses exported goods to destinations outside of Canada. Of these, over 5,900 (or 86 per cent) were small businesses that shipped around $18 billion worth of goods to international destinations (43 per cent of the total value of goods exported from the province), with an average export value per business of just over $3 million. The remaining 979 large business exporters accounted for over $24 billion of shipments, worth an average $25 million per business, more than eight times the average for small business.
The complete Small Business Profile 2018 report is available for download.