Las Vegas small-business creation outpaces nation

Michelle Swafford

Friday, Aug. 5, 2005 | 10:57 a.m.

Entrepreneurship increased in Nevada faster than the national average in 2004, a federal agency said Thursday.

The Small Business Administration's Office of Advocacy reported there were an estimated 177,282 employer and nonemployer small businesses in Nevada in 2004, up nearly 7 percent from an estimated 166,000 small firms in 2003.

Nationally, the number of small businesses increased 5.8 percent to an estimated 23.9 million firms in 2004 from 22.6 million in 2003.

The SBA defines small firms as those with 500 or fewer employees for most manufacturing and mining industries, 100 or fewer employees for wholesale trades, while other industries are measured by their average annual revenue.

"It looks like Nevada has been doing very well compared to all the national averages," said Michael Hull, SBA regional advocate for Nevada, Arizona, California, Hawaii and Guam. "Nevada's doing great."

Nearly 96 percent of Nevada's estimated 51,424 employer firms were considered small businesses. The overall increase in employer firms, large and small, increased 5.1 percent in 2004.

Nationally, 99.7 percent of the 5.7 million employer firms were small businesses.

Nevada's self-employed businesses increased 26.8 percent to an estimated 115,896 firms in 2004 from an estimated 91,377 firms in 2003. Self-employed firms include companies with and without employees and the owner could have more than one business or the business could have more than one owner, said Brian Headd, Office of Advocacy economist.

In the United States, self-employed businesses increased 2.2 percent to 15.6 million firms.

There were an estimated 10,483 new employer firms in Nevada in 2004, which is a 7.5 percent increase from the previous year. Nationally, employer firms increased 4.9 percent to 580,900 in 2004 from the previous year.

"That's the sign of innovation," Hull said. "Employer-based firms are more viable than non-employer-based firms."

Nevada's steady population growth is contributing to the increase in entrepreneurship, said Michael Graham, deputy state director of the Nevada Small Business Development Center.

Graham's center receives SBA funding and provides counseling and education to small-business owners, primarily existing owners. "2004 was our best year," Graham said. "We did over $5.5 million through economic impact and capital formation (and) 200 jobs were created."

That means the center helped small-business owners to obtain that much in loans, investments or contracts, he said. From Jan. 1 to July 30, the Nevada Small Business Development Center has created 122 jobs and provided $12 million in capital formation and economic impact, Graham said.

"This economy is still unpredictable in the sense that everyone believes they can predict growth," he said. "They've all been wrong and underestimated the growth in this community. The only thing I can see on the horizon that could affect that is the cost of housing."