Oregon has long been known as a small business state — and that’s only becoming a bigger part of its identity.
Meemaw's Hometown Kitchen, a family-owned, pay-what-you-can restaurant in Union, Ore., on Aug. 30, 2024.
Francisca Benitez / OPB
Today the state’s economy is fueled by nearly 400,000 small businesses, which account for more than 99% of all Oregon firms and employ more than half of the state’s workers.
Federal figures suggest more small companies are set to open in the coming year, according to Isabel Guzman, head of the federal Small Business Administration. She says that’s a reversal from the years leading up to the COVID-19 pandemic when entrepreneurs across the country were having a hard time getting businesses off the ground.
“Before COVID, we were seeing a decline in what they call business dynamism, where that’s whether births are outpacing deaths of small businesses,” Guzman told OPB while visiting Oregon recently. “And that decline was really alarming to the economists who know that, of course, small businesses create two-thirds of net new jobs. They employ half the workforce, they produce 40% of our country’s output.”
The SBA defines a small business based on a number of factors. In general, manufacturing companies with up to 500 employees, and non-manufacturing firms with average annual receipts under $7.5 million qualify, according to the agency.
In Oregon, Guzman said 180,000 new business applications have been filed in the last year. On top of that, federal data shows in 2023 Oregon had a net gain of 3,000 small businesses.
“What’s behind these huge numbers is that we’re seeing women continue to start businesses at incredible high rates,” Guzman said. “It’s double the rate of men.”
Overall, women owned a little more than 47% of Oregon business in 2023. At the same time, Guzman says Black and Latino entrepreneurship levels are growing at record rates across the country. Federal numbers from last year show the state had more than 34,000 businesses owned by Black or Hispanic Oregonians.
Right now that’s less than 10% of Oregon companies, but Guzman expects the number to increase in the coming years. She said one reason is more resources and capital — from her agency and others — are now available to Americans who have historically been shut out of business ownership.
Guzman said the SBA provides more than $500 million in loans and investments through state partners. Additionally, small firms get about $1.5 billion in federal contracts in Oregon.
Still, Guzman acknowledges that it’s gotten harder to run a small company in recent years. She points to inflation and supply chain snags, which can deal a larger blow to local shops than large corporations. Another is the struggle to stay up to date on increasingly sophisticated digital tools.
“The small businesses that have been the most successful are the ones that are constantly ready to take advantage of the opportunities that are in the marketplace,” Guzman said. “Whether that’s pursuing contracts with the federal government or going after those consumers who are spending, by increasing their digital marketing.”