Get to Know the Firms: A First Snapshot of Firm and Owner Characteristics

Since our launch of SFD USA in May 2025, we’ve recruited more than 80 firms into the study across our six research sites —Oakland, Chicago, St. Louis, New York City, Atlanta, Baltimore—as well as some rural areas. As we shift our focus from recruitment to data collection and analysis, we’re excited to share a snapshot of the small firms that make up our sample. (Note that these numbers may change slightly as we continue to recruit a few more firms into the study.) This blog post provides an overview of the firms in our study, the characteristics of their owners, and some initial observations on firms’ bookkeeping practices.

Photo taken by a SFD USA Relationship Manager

The firms

Firm age and structure

To be eligible to enrol in the study, firms must have been in operation for at least 2 years. Because of this, our sample includes firms that have typically moved past the startup stage. In fact, 91% of the firms in our sample are at least three years old, and nearly half (48%) have been operating for five years or more. Moreover, the firms are typically owned by one person (73%). The vast majority of firms (83%) are registered as Limited Liability Companies (LLCs).

Sector

Our sample covers a wide range of sectors, with a strong presence of service-based firms (44%), followed by retail trade (23%), accommodation and food services (14%), and food manufacturing (14%).

Many of these are business-to-consumer (B2C) firms (94%), meaning they provide goods or services directly to consumers. 

Number and type of workers

On average, firms in our sample employ 7 workers, split evenly between W2 employees and 1099 independent contractors (5 of each, on average). Although fewer firms report having off-the-books workers, those that do bring the overall average to 3 per firm. Most workers are employed on a part-time basis.

The owners

Demographics

The majority are led by women (72%). The age profile of owners skews toward mid-career entrepreneurs, with 41% between the ages of 36 and 45. 70% of firm owners are Black or African American. While Hispanic/Latino owners make up 17% of the sample, and 14% are White. Over 60% of firm owners in the sample hold a Bachelor’s degree or higher. 

Firm-Household relationship

When examining the relationship between the firm and the owner's household, we see a wide range in how much the firm contributes to household income. For 25% of firms, they provide just 0–20% of total household income, while at the other end of the spectrum, 21% of firms fully sustain their owners, contributing 100% of household income.

Bookkeeping practices: A mix of DIY and software 

Understanding how small firms manage their financial data is a core part of SFD USA. Most firms in the sample handle their own books; 63% of owners prepare their bookkeeping themselves before seeking external support. 

Further, 69% of firm owners use some version of QuickBooks to manage their bookkeeping records while another 9% use alternative bookkeeping software such as Wave or Xero. A majority (64%) have also integrated their bookkeeping tools with other systems such as point-of-sale (POS) platforms and credit card processors, which helps streamline cash flow tracking and transaction management.

Looking ahead

As we continue to collect data, keep an eye out for future blog posts that go deeper into what we’re learning about the day-to-day lives of these firms including how they make key operational decisions, the ways they manage their finances, and how they navigate the changing economic and business landscape.