📊 Small Business Profiles for Major Metropolitan Areas of the West 2025: Economic Summary

The “Small Business Profiles for Major Metropolitan Areas of the West 2025” report, published by the U.S. Small Business Administration’s Office of Advocacy, provides a comprehensive look at the state of small businesses across the largest Western U.S. metro areas.

Overview of Small Business in the Western U.S.

Small businesses are the backbone of the Western metropolitan economies, making up the vast majority of firms and employing a significant share of the workforce. The report defines small businesses as those with fewer than 500 employees and draws on the latest Census and SBA data.

Key Economic Insights by Metro Area

  1. Los Angeles-Long Beach-Anaheim
    • 🏙️ Scale: 1.8 million small businesses (99.8% of all businesses).
    • 👥 Employment: 2.9 million employees (52.6% of metro employment).
    • 📈 Growth: From 2012 to 2022, small employer numbers rose from 284,073 to 352,048; employment grew from 2.5 million to 2.9 million.
    • 💼 Industry Focus: Professional, Scientific, and Technical Services lead in business count; Health Care and Social Assistance is a major employer.
  2. San Francisco-Oakland-Fremont
    • 🏙️ Scale: 535,998 small businesses (99.4%).
    • 👥 Employment: 1.1 million employees (46.7%).
    • 📈 Growth: Small employers increased from 97,730 to 108,341; employment from 945,249 to 1.1 million.
    • 💼 Industry Focus: Professional, Scientific, and Technical Services dominate both in number and employment.
  3. San Jose-Sunnyvale-Santa Clara
    • 🏙️ Scale: 182,052 small businesses (99.0%).
    • 👥 Employment: 424,355 employees (37.0%).
    • 📈 Growth: Employers up from 38,111 to 40,763; employment up from 382,425 to 424,355.
    • 💼 Industry Focus: Professional, Scientific, and Technical Services are the largest sector.
  4. Seattle-Tacoma-Bellevue
    • 🏙️ Scale: 389,468 small businesses (99.3%).
    • 👥 Employment: 810,000 employees (43.9%).
    • 📈 Growth: Employers rose from 78,222 to 89,050; employment from 703,560 to 810,000.
    • 💼 Industry Focus: Professional, Scientific, and Technical Services are prominent.
  5. Portland-Vancouver-Hillsboro
    • 🏙️ Scale: 260,175 small businesses (99.2%).
    • 👥 Employment: 544,855 employees (50.2%).
    • 📈 Growth: Employers up from 50,125 to 58,263; employment from 454,393 to 544,855.
    • 💼 Industry Focus: Professional, Scientific, and Technical Services lead in business count; Health Care and Social Assistance in employment.
  6. Other Notable Metros
    • Salt Lake City-Murray: 139,549 small businesses (98.8%), 283,971 employees (42.0%).
    • Riverside-San Bernardino-Ontario: 444,547 small businesses (99.5%), 629,954 employees (47.2%).
    • Oxnard-Thousand Oaks-Ventura: 89,851 small businesses (98.9%), 156,243 employees (58.1%).

Trends and Economic Implications

  • Dominance of Small Businesses: Across all Western metros, small businesses account for over 95% of all firms and employ between 37% and 58% of the workforce. This underscores their critical role in job creation and economic stability.
  • Sectoral Strengths: The Professional, Scientific, and Technical Services sector is consistently the largest by business count, reflecting the West’s innovation-driven economy.
  • Growth Trajectory: The decade from 2012 to 2022 saw steady increases in both the number of small employers and total small business employment, indicating resilience and expansion despite economic headwinds.
  • Self-Employment: Self-employment rates vary, with some metros like Oxnard-Thousand Oaks-Ventura at 15.4% and San Jose-Sunnyvale-Santa Clara at 10.4%. Median incomes for incorporated self-employed individuals are high in tech hubs, e.g., $97,959 in San Jose, reflecting lucrative opportunities for skilled entrepreneurs.

Economic Considerations for SaaS and Small Business Owners

  • 🧑‍💻 Tech Ecosystem: The concentration of small businesses in professional and technical services suggests a robust ecosystem for startups, with ample networking, partnership, and client opportunities.
  • 💸 Labor Market: High employment shares in small businesses mean competition for talent can be intense, especially in tech-centric metros.
  • 📉 Self-Employment Trends: Slight declines in self-employment rates may reflect rising barriers to entry or consolidation in certain sectors, but high median incomes indicate strong potential for successful ventures.
  • 🏦 Regional Variations: While all metros show strong small business presence, the share of employment and growth rates vary, so local economic conditions should inform business strategies and commentary.

💡 Summary

The 2025 SBA report highlights the Western U.S. as a powerhouse for small business activity, especially in tech and professional services. Small businesses are vital for employment and economic growth, with steady expansion over the past decade. For entrepreneurs and small business commentators, these trends point to a dynamic, opportunity-rich environment—though one that demands attention to local labor markets and sectoral shifts.

References: 

Small Business Profiles for Major Metropolitan Areas of the West 2025, U.S. Small Business Administration

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