“This webinar is going to be focusing on businesses with less than five people, so really small ones,” Lisa Grigg, labor economist of the Idaho Department of Labor (IDOL), said at the start of the Oct. 8 webinar. “I hope [listeners] take away how much [small businesses] produce in our economy, but also there are a lot of blind spots in trying to see these businesses.”
The Small Business Administration defines a small business as 500 or less employees, with wide variation based on the industry sector, though Grigg said she would focus on five or less employees for Idaho.
Grigg explained one issue with measuring the number of small businesses in Idaho is because the IDOL records only include businesses covered under unemployment insurance, so this does not include all small businesses.
However, according to data IDOL does have, the percentage of employers with less than five employees increased by about 5% between 2018 to 2023, and about 10% of the overall Idaho workforce works for these businesses. The highest amount of employment was found in Idaho businesses that had a workforce between five to 99 workers at 41% in 2023, even though the number of employers who had these workers dropped from 30% in 2018 to 26% in 2023.
Some small businesses (averaging five employees) fluctuate during the year, with more or less workers during the first and third quarters of the year, according to Grigg. A few industries that experience these seasonal changes in Idaho are construction, agriculture, food services, entertainment and recreation.
In Idaho, from 2018 to 2023, employees working for a small business grew from 60,746 to 81,075 people.
How are the employers of small businesses doing from 2018 to 2023? Those with one to four workers reported 58% were still active and 65% saw no change or an increase in employment.
Where are these small businesses concentrated?
“[In 2023], we were beginning to see more employers opening up in rural areas as opposed to metropolitan after the pandemic,” said Grigg, pointing to a chart showing about 64% of small businesses were in rural areas.
“Urban still makes up most of your total employment, whether it’s small employment or not,” Grigg said.
How do the Idaho employer rates compare with the United States average? According to statistics, per 1,000 population, 35 people are private employers whereas 46 are in Idaho. Private employers with five or less employees are 32 out of 1,000 people, and the U.S. is about 23 out of 1,000 people.