The Wonderland Economy

Source: U.S. Small Business Administration, Office of Advocacy, Small Business Data Base, Washington, D.C.

Nature of Small-Firm Alliances
(sales < $50 million)

Source: The Alliance Analyst, Philadelphia, 1995.

The Growing Number of Franchised Establishments

Sources: Franchising in the Economy , U.S. Department of Commerce, various years; International Franchise Association, Washington, D.C.,1992.

The Riskiest and Safest Businesses
Every month, according to Dun & Bradstreet's records, several thousand companies fail under circumstances in which creditors lose money. Small companies fail more frequently than larger companies do, which means that entrepreneurship can still be hazardous to your financial health. But the aggregate numbers camouflage some remarkable differences among industries, argues Bruce Phillips, the Small Business Administration's Director of the Office of Economic Research at the Office of Advocacy, in Washington, D.C. Phillips studied what the SBA calls small-business-dominated industries for the year 1990 and found that failure rates varied from a whopping 578 per 10,000 companies all the way down to a piddling 13 per 10,000. Here are the businesses that Phillips's study revealed to be the five riskiest and the five safest, based on failure rates:

Growth in Businesses and Population
In 1992 more than 21 million businesses filed tax returns in the United States. And only 14,000 of those businesses employ more than 500 people and are considered by the SBA to be "large" businesses. At the end of 1992, there were 5.7 million businesses with employees in the United States. The net number of companies increases at a rate of between 2% and 3% annually, which is slightly higher than the rate of growth of the general population and of the work force.

Company Counts: Nonfarm Business Tax Returns

Sources: The State of Small Business, Small Business Administration, Washington, D.C., 1993; Statistical Abstract of the United States, U.S. Department of Commerce, Washington, D.C., 1994.

Note: 1992 numbers are projected.

Change in the Number of U.S. Businesses with Employees 1982Ñ1992 (in thousands)

Source: The State of Small Business, A Report to the President, Small Business Administration, Washington, D.C., 1993. * New firms that are taken over by existing businesses

Staying Alive

Percentage of Companies Started in 1985 That Were Still Operating in 1994, by Original Employee Head Counts

Source: The Dun & Bradstreet Corporation, New York City.