At UBC Advisors, we view small businesses as the economy’s “early warning system”—the first to detect shifts and the first to signal recovery. When small businesses start hiring, it’s more than just a trend—it’s a sign that the economy is gaining momentum. Right now, that momentum is building.
Small businesses are integral to economic vitality. Here’s why their performance is a key economic indicator:
• Significant Employment Contribution: As of 2023, small businesses employed over 61.6 million individuals, accounting for nearly half of the private-sector workforce. 
• Job Creation Powerhouses: Between 2013 and 2023, small businesses were responsible for 55% of total net job creation, underscoring their role as primary drivers of employment growth. 
• Responsive to Economic Changes: Due to their size and structure, small businesses can quickly adapt to economic fluctuations, making them reliable indicators of broader economic trends.
An uptick in hiring among small businesses signals growing confidence and anticipated expansion. For instance, in 2024, the U.S. averaged 430,000 new business applications per month, a 50% increase from 2019 levels, indicating robust entrepreneurial activity. 
While some sectors, such as government employment, have seen fluctuations—with a notable increase of 709,000 jobs in 2023 —the sustained growth in small business hiring reflects a strengthening private sector.
Economic recoveries often involve a rebalancing between public and private sector employment. Historically, private-sector growth has been a more reliable indicator of sustainable economic health. Here’s why:
• Driving Productivity: Private enterprises directly contribute to economic output through innovation and efficiency.
• Sustainable Growth: Private sector expansions lead to lasting job creation and economic development.
• Multiplier Effect: Success in small businesses stimulates local economies, creating additional employment opportunities and fostering community development.
The current trend of increased small business activity suggests a solid foundation for long-term economic growth. As these enterprises expand, they not only contribute to immediate job creation but also set the stage for sustained economic resilience.
For business owners, this environment presents a prime opportunity to leverage growth, consider strategic acquisitions, or plan for a lucrative exit. Investors may find promising prospects in the burgeoning small business sector, where innovation and agility drive success.
At UBC Advisors, we specialize in helping businesses navigate these dynamic economic landscapes. Whether you’re looking to expand, sell, or acquire, our team offers tailored strategies to maximize your success in today’s market.
