Despite a concerted effort throughout the city to drum up support for local small businesses, new research shows that Philadelphia is still losing ground compared to similar metropolitan areas.
According to the Philadelphia Business Journal, a new Kauffman report has found that Philadelphia’s small business density is smaller than other major cities. The Kauffman report ranks American cities based on the number of small businesses they have compared to their overall population.
Though Philadelphia fell only one spot to #17, just under 5% of adults in the region are small business owners. In comparable markets such as Portland and Miami, approximately 8% of adults own a small business.
Additionally, Philadelphia has about 1,063 small businesses per 100,000 people, while cities like New York and Boston have more than 1,200.
A primary reason for the city’s disappointing ranking could be the fact that local small businesses are hiring less. Nearly 52% of small businesses in the area have four employees or fewer, which marks a 3.6% increase since 1996.
There are almost 28 million small businesses in the U.S., and the report indicates that this number will continue to grow. In fact, Philadelphia’s small business activity actually increased this year, albeit at a much slower pace than other metropolitan areas.
According to CBS Philadelphia, small businesses in Philadelphia got a major boost this holiday season on the day after Black Friday, which is also known as Small Business Saturday.
Small businesses throughout the region teamed up to deliver Small Business Passports to local shoppers. Consumers who made a purchase at participating small businesses got a stamp, and after getting three stamps, were entered to win one of several prizes.
“This is the first time that we’re doing a collective effort, organizing all the businesses to offer a single program,” said Kevin Moran, member of the Fairmount Community Development Corporation.
The Kauffman report added some other surprising tidbits about the state of small business in Philadelphia. The rate of Asian small business owners in the region has seen a considerable downturn in recent years, dropping from 10% in 2008 to 4% in 2012.
Also, small business owners aged 20-34 are few and far between in Philadelphia, which is consistent with other metropolitan areas. It suggests that mounting student loan debts are prohibiting millennials from obtaining the necessary capital to launch a startup.
Pennsylvania’s general decline in small business mirrored that of Philadelphia, dropping two spots in the statewide rankings.
In the metropolitan area rankings, New York was #1, with Las Vegas earning the dubious distinction of lowest small business density among all major cities.