FACT CHECK: Do Small Businesses Make Up 99 Percent Of Companies In North Dakota?

Brad Sylvester | Fact Check Reporter

Democratic Sen. Heidi Heitkamp claimed on Twitter that 99 percent of employers in North Dakota are small businesses.

“Small business are critical to ND’s economy & make up 99% of employers in ND,” she said.

Verdict: True

Heitkamp is referring to private sector employers. North Dakota small businesses make up 98.8 percent of all companies in the state and employ 57.7 percent of the private workforce, according to the Small Business Administration (SBA).

Fact Check:

The SBA determines whether or not a company qualifies as a small business based on the number of people it employs and its annual revenues. Small businesses can, in some cases, have hundreds of employees and millions of dollars in revenue. Companies that extract petroleum and natural gas, for example, can have as many as 1,250 employees and food service contractors can make as much as $38.5 million in revenue a year and still be considered small businesses.

Approximately 99 percent of all companies in North Dakota are small businesses, and they employ 57.7 percent of the state’s private sector employees, according to data from the SBA. This equates to 210,948 people working at 72,723 small businesses.

And this isn’t unique to North Dakota – 99.9 percent of companies in the U.S. are small businesses.

Being classified as a small business can be advantageous as it allows for certain benefits, including access to small business loans, government contracts and research grants.

The median annual income in 2016 for incorporated small business owners was $50,347 in the U.S. and $55,127 in North Dakota. For unincorporated small business owners, the median annual income was $23,060 in the U.S. and $36,377 in North Dakota.

Seventy-three percent of all small businesses in North Dakota are nonemployer firms, meaning they have no paid employees and generally earn more than $1,000 a year in revenues. Another 23 percent have between one and 20 employees.

As of 2016, North Dakota’s top industries were oil and natural gas, agriculture, tourism, manufacturing and coal.

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Brad Sylvester

Fact Check Reporter

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