House Econ State Of Small Business
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- House Econ State Of Small Business
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- House Econ State Of Small Business
Summary
A slide presentation titled State of Small Business by the National Federation of Independent Business (NFIB) to the House Economic Competitiveness Committee, dated September 4, 2025, with contact details for NFIB's Michigan State Director. It describes NFIB, discusses how small businesses are defined, and reports that non-employer firms generated $1.7 trillion in economic activity in 2022. It presents Michigan data on firms and employment by size, stating that 47.7 % of Michigan employment is in firms under 500 employees, and lists the ten most severe problems from the 2024 NFIB Problems & Priorities survey. The final slides describe reforms from 2011-2018 and NFIB's proposals on taxes, regulation, labor and legal issues, including making an income tax cut to 4.05% permanent.
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STATE OF SMALL BUSINESS
House Economic Competitiveness Committee
September 4, 2025
ABOUT NFIB
National Federation of Independent Business
REPRESENTSMALL
REPRSENT SMALL&&IND
INDBUSINESSES
BUSINESSESSINCE
SINCE1943
1943
REPRESENTATION IN DC AND STATE CAPITOLS
KEY POINT
MEMBERS SET POLICIES/ONE MEMBER – ONE VOTE
OVER 11,350 MEMBERS IN MICHIGAN/300,000 NATIONWIDE
JOIN FOR FREE ENTERPRICE
FOUNDED IN 1943ADVOCACY
MEMBERS IN ALL INDUSTRIES THROUGOUT THE STATE
@NFIB @NFIB @NFIB @NFIBdotcom 2
ABOUT NFIB
Mission Statement
REPRSENT SMALL & IND BUSINESSES SINCE 1943
To promote and protect the rights
of our members to own, operate
KEY POINT
and grow their businesses.
FOUNDED IN 1943
@NFIB @NFIB @NFIB @NFIBdotcom 3
HOW DO YOU DEFINE SMALL BUSINESS?
It Depends on Who you Ask!
The Small Business Act states that a small business
Small Business Administration (SBA) typically
concern is "one that is independently owned and defines as less than 500 employees
operated and which is not dominant in its field of
operation." Title 13, Code of Federal Regulations,
part 121 (13 CFR 121).
State and Federal Statutes and Regulations
Over the years SBA has established and revised have various defined definitions, normally
numerical definitions for all for-profit industries, defined by number of employees eg: FMLA is
and this numerical definition is called a "size
50 employees, ESTA is 10
standard." It is almost always stated either as the
number of employees or average annual receipts
of a business concern.
@NFIB @NFIB @NFIB @NFIBdotcom 4
NON-EMPLOYER FIRMS
Sole Proprietors, Independent
Contractors, Etc
The "non-employer" category (essentially self- Non-employer firms generated $1.7 trillion in
employed people). A non-employer firm is economic activity in 2022, representing
defined as one that has no paid employees,
approximately 6.8% of the U.S. economy,
according to the U.S. Census Bureau. These
has annual business receipts of $1,000 or more
businesses are a growing segment of the
($1 or more in the construction industries), and
overall economy, with their number growing
is subject to federal income taxes. at a faster rate than employer businesses
between 2012 and 2023.
See the U.S. Census Bureau, Non-employer Statistics for more
detailed information.
@NFIB @NFIB @NFIB @NFIBdotcom 5
MICHIGAN FIRMS
BY NUMBER OF EMPLOYEES
Enterprise Size Firms %
Less than 100 employees 169,713 95.8%
100-499 employees 3,940 2.2%
500+ employees 3,587 2.0%
@NFIB @NFIB @NFIB @NFIBdotcom 6
MICHIGAN EMPLOYMENT
BREAKDOWN BY EMPLOYEES
@NFIB @NFIB @NFIB @NFIBdotcom 7
MICHIGAN EMPLOYMENT
47.7 % EMPLOYED BY FIRMS UNDER 500 EMPLOYEES
Enterprise Size Employment %
Less than 100
1,316,961 33.4%
employees
100-499 employees 562,283 14.3%
500+ employees 2,059,832 52.3%
@NFIB @NFIB @NFIB @NFIBdotcom 8
MICHIGAN EMPLOYMENT BY SECTOR
ALL EMPLOYMENT
TOP INDUSTRIES:
• MANUFACTURING
• RETAIL/TRADE
• ACCOMODATIONS/HOSPITALITY
• PROFESSIONAL SERVICES
• CONSTRUCTION
@NFIB @NFIB @NFIB @NFIBdotcom 9
MICHIGAN EMPLOYMENT BY SECTOR
1-19 EMPLOYEES
TOP INDUSTRIES:
• MANUFACTURING
• RETAIL/TRADE
• ACCOMODATIONS/HOSPITALITY
• PROFESSIONAL SERVICES
• CONSTRUCTION
@NFIB @NFIB @NFIB @NFIBdotcom 10
MI EMPLOYMENT WITH NON-EMPLOYERS
56.6 % EMPLOYED BY FIRMS UNDER 500 EMPLOYEES
@NFIB @NFIB @NFIB @NFIBdotcom 11
DO SMALL BUSINESSES PAY TAXES?
These funds are collected through the personal
income tax for pass-through entities and do not
appear in any fiscal analysis as “business taxes”,
despite the fact that they are.
YES!
$843 MILLION in 2016
@NFIB @NFIB @NFIB @NFIBdotcom 12
MICHIGAN SMALL BUSINESS
FIRMS
81%
OF SMALL BUSINESSES ARE
ORGANIZED AS PASS-THROUGH
ENTITIES
According to 2020 US Census Data
@NFIB @NFIB @NFIB @NFIBdotcom 13
WHO ARE NFIB MEMBERS?
65%
NON-EMPLOYERS 18%
11-50 EMPLOYEES 14%
51-100 EMPLOYEES 1%
100+ EMPLOYEES 1%
OF NFIB MEMBERS HAVE BETWEEN
1-10 EMPLOYEES
@NFIB @NFIB @NFIB @NFIBdotcom 14
2024 NFIB PROBLEMS & PRIORITIES
10 MOST SEVERE PROBLEMS FOR SMALL BUSINESS OWNERS
1. Cost of Health Insurance 6. Cost of Natural Gas, Propane, Gasoline,
2. Cost of Supplies/Inventories Diesel, Fuel Oil
3. Uncertainty over Economic 7. Unreasonable Government
Conditions Regulations
4. Federal Taxes on Business Income 8. Uncertainty over Government Actions
5. Locating Qualified Employees 9. State Taxes on Business Income and
Electricity Cost (tied)
@NFIB @NFIB @NFIB @NFIBdotcom 15
2024 NFIB PROBLEMS & PRIORITIES
10 MOST SEVERE PROBLEMS FOR SMALL BUSINESS OWNERS
1. Cost of Health Insurance 6. Cost of Natural Gas, Propane, Gasoline,
2. Cost of Supplies/Inventories Diesel, Fuel Oil
3. Uncertainty over Economic 7. Unreasonable Government
Conditions Regulations
4. Federal Taxes on Business Income 8. Uncertainty over Government Actions
5. Locating Qualified Employees 9. State Taxes on Business Income and
Electricity Cost (tied)
@NFIB @NFIB @NFIB @NFIBdotcom 16
SMALL BUSINESSES
Benefits and Challenges
BENEFITS
CHALLENGES
• Employment is spread among many small
• Have smaller margins to weather economic downturns
businesses – less impact if business fails
• Due to cash flow and costs, struggle to provide similar
• Smaller employers/entrepreneurs are often benefits as large corporations
nimbler and more creative
• Have less resources to be aware and adapt to new
• Give back and are more intimately involved in regulations and labor mandates
their community
• Unable to easily move their business if the state or local area
is unfavorable
@NFIB @NFIB @NFIB @NFIBdotcom 17
MICHIGAN’S SMALL BUSINESS CLIMATE
INTANGIBLES
FEDERAL ACTIONS
REGULATORY
BALLOT PROPSALS
JUDICIAL DECISIONS
OTHER OUTSIDE FACTORS
@NFIB @NFIB @NFIB @NFIBdotcom 18
MICHIGAN’S SMALL BUSINESS
CLIMATE
TAXES
REGULATORY
REGULATORY
LABOR
LEGAL
@NFIB @NFIB @NFIB @NFIBdotcom 19
REFORMS THAT GOT RESULTS
2011-2018
TAX/SPENDING LABOR
▪ Eliminated the Michigan Business Tax and ▪ Eliminated prevailing wage on state projects
replaced it with the Corporate Tax ▪ Allowed for Workplace Freedom in private
▪ Reined in unnecessary spending industry
▪ Eliminated economic development “hand outs” ▪ Preempted locals from creating a patchwork of
▪ Eliminated personal property tax on labor laws
manufacturing ▪ Passed common sense paid leave law
▪ Bonded $4 Billion in UI debt to eliminate ▪ Workers Compensation reform
federal penalties ▪ Unemployment Insurance reform
LEGAL
REGULATORY
▪ Trespasser Liability
▪ Office of Regulatory Reform/Legislative ▪ Wage Garnishment reform
Initiative to remove outdated statutes
▪ Include limits to rule making authority in
statute to limit power of unelected bureaucrats
@NFIB @NFIB @NFIB @NFIBdotcom 20
HOW DO WE MOVE MICHIGAN
FORWARD?
• DO NO HARM
• REDUCE UNCERTAINTY
@NFIB @NFIB @NFIB @NFIBdotcom 21
TAX
FAIR AND LEVEL PLAYING FIELD
ELIMINATE PERSONAL PROPERTY TAX ON COMMERCIAL AND INDUSTRIAL
REPRSENT SMALL & PROPERTY
IND BUSINESSES SINCE 1943
MAKE INCOME TAXKEY POINT
CUT TO 4.05% PERMANENT
STOP GIVING BILLIONS TO CORPORATIONS
REVIEW STATE OPERATIONS AND ELIMINATE UNNECESSARY AND DUPLICATIVE
AGENCIES/POSTITIONS
FOUNDED IN 1943
SHRINK STATE SPENDING TO PREVENT THE NEED FOR FURTHER TAX
INCREASES
@NFIB @NFIB @NFIB @NFIBdotcom 22
REGULATORY
BALANCED AND THOUGHTFUL REGULATIONS
CONTINUE TO REIN IN
REPRSENT DEPARTMENT
SMALL RULE MAKING
& IND BUSINESSES SINCEAUTHORITY
1943 AND
PROVIDE LEGISLATIVE OVERSIGHT
KEY POINT
PREVENT REGULATIONS FROM BEING STRICTER THAN FEDERAL WITHOUT
PROPER REASONING
OVERTURN HARMFUL AND COSTLY ENERGY LEGISLATION FROM 2023
FOUNDED IN 1943
@NFIB @NFIB @NFIB @NFIBdotcom 23
LABOR
DON’T MAKE IT HARDER TO HIRE
REPRSENT SMALL &WORKPLACE
REINSTATE IND BUSINESSES SINCE 1943
FREEDOM
HOLD UIA ACCOUNTABLE FORKEY POINT STATUTE AND SLOW DOWN
FOLLOWING
BENEFIT INCREASES
STOP ADDITONAL LABOR MANDATES AND PROVIDE A FULL EXMPTION FOR
FOUNDED IN 1943
SMALL BUSINESS FOR ESTA
@NFIB @NFIB @NFIB @NFIBdotcom 24
LABOR
DON’T MAKE IT HARDER TO HIRE
REPRSENT SMALL &COMP
KEEP WORKERS IND BUSINESSES
REFORMS INSINCE 1943
PLACE
REASONABLE REGS THAT PROMOTE YOUTH HIRES
KEY POINT
STOP PASSING HEALTHCARE MANDATES
FOUNDED IN 1943
@NFIB @NFIB @NFIB @NFIBdotcom 25
LEGAL
FIX WHAT THE COURT BROKE
REINSTATE SOME FORMSMALL
REPRSENT OF “OPEN AND
& IND OBVIOUS”SINCE
BUSINESSES FOR PREMISES
1943 LIABILITY
KEY POINT
PASS “LOSER PAYS” LEGISLATION FOR STATE DEPARTMENTS
PROVIDE CLEAR LANGUAGEFOUNDED
OF LEGISLATIVE INTENT TO PREVENT COURT
IN 1943
MISINTERPRETATION
@NFIB @NFIB @NFIB @NFIBdotcom 26
Amanda Fisher, Michigan State Director
Amanda.fisher@NFIB.org
Data used in this presentation comes from the following sources
Small Business Administration Date Resources
US Census Bureau BDS (Business Dynamics Statistics)
NFIB Research Foundation Problems & Priorities
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