business starts and stops · business starts, it appears tied to the strong economy and declining...

BUSINESS

AND

STOPS

STARTS

William J. Dennis, Jr.

NOVEMBER, 1999

Wells Fargo/NFIB Series on

NFIBEducationFoundation

2

Wells Fargo/NFIB Series on

The Wells Fargo\NFIB Series onBusiness Starts and Stops is aunique effort to quantify and profile

business formations and terminations inthe United States. The Series offers a novelview of both phenomena, a view often atodds with the most strongly held biasesabout the creation and dissolution ofbusiness entities in this country.

The Wells Fargo\NFIB Seriesprovides the first reliable estimate of totalbusiness starts, not just a proxy estimatefor starts such as “new employers” or“new incorporations.” The principalconsequence is that the Series findssignificantly greater start activity thanheretofore thought. In fact, the totalnumber of starts is a multiple ofcommonly available numbers.

The larger estimates stem primarilyfrom the inclusive nature of the Series.This data set simply measures differentphenomena than other data sets andtherefore should introduce a differentperspective. Greater detail on therelationship between Series estimates andother data sources can be found in WilliamJ. Dennis, Jr., “More Than You Think: AnInclusive Estimate of Business Entries,”Journal of Business Venturing, May, 1997.

The Series also reports business startactivity over time. In fact, an originalintent of this research was to quantifychange in business starts from quarter toquarter and year to year. The initialmeasurements in the Series spannedcalendar year 1995. The most recentcover calendar year 1998.

In addition, the Series quantifies and profiles significant numbers ofbusiness stops or terminations. Previouslypublished data focus on stops withfinancial losses to creditors. Knowledgeableobservers recognize that that type oftermination is relatively uncommon. Moretypical are terminations where the businesshas produced losses only for the investorsor where various factors, e.g., retirement,

other opportunities, cause an owner to enda profitable endeavor. Documenting thosewho stop without financial loss to creditorstherefore multiplies the numbers of stopscounted through traditional measures.

For many reasons, the Series stopsdata — the most inclusive to date — stillappear to seriously underestimateterminations. The missing firms appear tobe among the very smallest. The result is aprofile of more substantive terminations.But even with this limitation, the Seriesoffers notably more detailed insights intothe termination process than otherwiseavailable. An examination of therepresentativeness issues involved can befound in “A Private Sector Initiative toMeasure Business Births and Deaths: TheProblem of Deaths,” October, 1998 —available from the author.

The data for the Wells Fargo\NFIBSeries are collected by The GallupOrganization of Princeton, N.J. Gallupinterviews 3,000 households monthly(annual rate of 36,000 households). Duringthe interviews, it screens households forbusiness start\stop activity within the lastsix months and then poses additionalquestions of those screening positively. Thesubsequent estimates of starts and stopsare calculated by the author from datacollected on the incidence of householdstart\stop activity, households with morethan one start\stop, and the number ofpeople outside the household activelyparticipating in the processes. Where morethan one start\stop occurs in a household,the reported profile of people andbusinesses use the most recent.

The previously cited article in theJournal of Business Venturing provides a more detailed description of theprocedures used to collect the data and to make the start, and by implication, the stop estimates.

The author wishes to thankNilesh Sutaria for his valuable datamanagement support.

BUSINESS STARTS AND STOPS

3B u s i n e s s S t a r t s a n d S t o p s

• Over four and one-half million Americansformed three million businesses in 1998.Seventy-five percent were started fromscratch (de novo) while the remainderconsisted of purchases, inheritances, etc.

• The number of starts in 1998 fell by 600,000from the previous year. The number ofpeople actively participating in those startsfell by 400,000. Both have fallen every yearsince the Series began in 1995 (the firstcomparative measure was 1996). While thedata provide no reason for the trend inbusiness starts, it appears tied to the strongeconomy and declining unemployment.Potential business owners have had agrowing number of attractive employmentand investment options in the last half of the 1990s.

• Starts fell in all four regions of the countrybetween 1997 and 1998. The Mid-westernregion registered the smallest decline bothin absolute number (60,000) and relativesize (eight percent). The South registeredthe largest (266,000 and 21 percent). TheWest produced the greatest number ofstarts per capita, just as it has since 1995.

• The number of active owners per businessstart rose to just over 1.5. Seventy (70)percent started without “partners” in 1998,down from 75 percent in 1997. “Startteams” in lieu of a single individual usuallyindicate larger, more sophisticatedorganizational efforts.

• Most business starts are quite small. Fewerthan one in four (23 percent) began with anemployee other than the owner(s). One inthree (34 percent) were part-time ventures,defined as a non-employer, working lessthan 40 hours per week in the first month,and operating out of the home. Thesefigures have remained stable in the Seriesfirst four years.

• The median investment in a business start was $3,900. The average was a little over $18,000. The median time required to accumulate the necessary capital was one month, the average about six. Morethan one in four (28 percent) report that accumulating capital was the mostdifficult problem encountered whenforming the business.

• Just over one in ten (12 percent) startedwith the active involvement of a familymember (blood or in-laws). The mostfrequently involved members were spousesand siblings (brothers and sisters).

• Most people who start businesses have notdone so before. But of the 16 percent whohave, one-third can be termed “serialentrepreneurs.” They have started threeor more businesses.

• Nearly two million people were involved in 1.3 million businesses which ceasedoperation in 1998. The 1998 figures areslightly higher than 1997’s. However, they remain about 20 percent lower thanreported in 1995 and 1996.

• Most businesses simply fade-away. Duringthe last month of operation, a largemajority (59 percent) worked less than 40hours per week and almost 30 percentworked less than 10.

• Terminating a business is not tantamount tofinancial disaster. Half of ownersterminating businesses reported that theirbusiness was profitable over its lifetime, tenpercentage points higher in 1998 than in1997. Furthermore, ten percentage pointsmore owners claimed they were better offfinancially (65 percent) after terminatingthe business than beforethey started it.

TEXT SUMMARY

4


People

Purchased22.1%

Other N/A 1.6%

Businesses

Other, N/A 49Total 3,060

Purchased 676

In Thousands

Started (de novo) 2,335

Started (de novo)76.3%

Purchased24.3%

Other N/A 1.9%


Purchased 1,123

In Thousands

Started (de novo) 3,409

Started (de novo)73.8%

Businesses Started and People Who Started Them–1998

3,000

5,000

7,000

1995 1996

People

1997 1998

6,366

4,483

5,580

3,930

5,027

3,643

4,621

3,060

Businesses

thousands

Businesses Started and People Who Started Them–1995-1998


Two Starts7.1%

Three+ Starts2.8%

One Start90.1%

Four Owners8.6%

Three Owners5.6%

Two Owners15.3%

N/A0.6%

One Active Owner69.9%

Starts* Per Household‡ “Active” Owners Per Start*

Starts* by Geographic Region

828

1,297

694

1.20

.93

.86

StartsIncidence†

.97

507

(000’s)

6

THE PEOPLE

Started PurchasedCharacteristic Business Business Total Incidence†

Age (Years)

<25 8.8% 13.5% 9.8% 0.8%

25-29 16.5 15.2 16.7 1.7

30-34 16.7 16.2 16.6 1.6

35-39 16.1 14.9 15.8 1.4

40-44 15.2 16.1 15.2 1.4

45-49 9.6 7.8 9.3 1.0

50-54 8.7 8.4 8.5 1.1

55-59 3.8 4.6 3.9 0.6

60-64 2.7 0.0 2.2 0.4

65+ 1.5 2.7 1.7 0.1

N/A 0.4 0.5 0.4 –

Total 100.0 100.0 100.0 1.0

Sex

Male 64.9% 64.0% 64.1% 1.3

Female 35.1 36.0 35.9 0.7

Total 100.0 100.0 100.0 1.0

Race

Black 10.0% 9.1% 9.7% 0.8

White 83.8 83.9 83.7 1.0

Other 5.3 6.3 5.9 1.3

N/A 0.9 0.7 0.7 –

Total 100.0 100.0 100.0 1.0

Hispanic

Yes 4.2% 7.4% 5.1% 0.5

No 95.4 91.6 94.4 1.1

N/A 0.4 1.0 0.5 –

Total 100.0 100.0 100.0 1.0

Age, Sex and Ethnicity of People Starting Businesses


Education, Household Income, Marital Status, and EmploymentStatus of People Starting Businesses

Started PurchasedCharacteristic Business Business Total Incidence†

Education (Highest Level)< Grade 12 6.3% 4.5% 6.3% 0.4High School Graduate 20.1 28.2 22.0 0.6Some College 30.3 28.5 29.8 1.4Trade/Vocational School 4.9 7.4 5.4 1.5College Graduate 25.2 20.1 23.9 1.4Post-Graduate/Professional Degree 12.8 7.9 11.6 1.4N/A 0.4 3.3 1.0 –Total 100.0 100.0 100.0 1.0

Household Income ($000)<10 2.1% 1.2% 1.9% 0.210-19 4.1 9.7 5.4 0.320-29 11.9 10.0 11.3 0.830-39 10.9 11.5 11.0 0.940-59 22.6 25.3 23.0 1.360-74 11.6 11.6 11.6 1.175-99 10.6 8.1 10.0 1.2100+ 15.1 14.1 14.7 1.8N/A 11.1 8.5 11.1 –Total 100.0 100.0 100.0 1.0

Marital StatusSingle 24.3% 19.4% 23.1% 1.0Married 60.6 69.5 62.5 1.1Separated 2.2 1.8 2.3 1.0Divorced 11.4 7.9 10.7 1.1Widowed 0.4 0.6 0.5 0.1N/A 1.0 0.8 1.0 –Total 100.0 100.0 100.0 1.0

Employment Status (30 days before start)Employed 76.8% 76.3% 76.7% 1.2Unemployed 5.2 2.5 4.6 1.5Not in Labor Force 17.4 20.6 18.2 0.6N/A 0.6 0.6 0.5 –Total 100.0 100.0 100.0 1.0

8

0%

10%

20%

30%

40%

50%

60%

70%

11.98.99.8

48.1

7.4

12.511.5 10.7

7.6

<10 10-19 20-29 30-39 40-49 50-59 60-69 70+ N/A

Hours Per Week

<40§ 40+§

13.4

44.3

Hours/Week Worked in Business DuringFirst Month of Business Operation

Started PurchasedCharacteristic Business Business Total

ObjectivesGrow to be Large Business 28.6% 14.3% 26.0%Provide Decent Living 35.5 42.1 36.6Supplement Income 27.1 35.6 28.7Carry Over Until Locate Good Job 4.6 3.7 4.4N/A 5.3 4.2 4.4Total 100.0 100.00 100.0

Started Due to Lost Job or Fear of Lost JobYes 14.5% 18.1% 15.0%No 83.6 80.1 83.1N/A 1.9 1.8 1.9Total 100.0 100.0 100.0

Purpose of Start


0%

5%

10%

15%

20%

25%

10.9

Started Purchased Total

16.8

12.0

Family Member’s Active Involvement

Child11.2%

Other BloodRelative 10.2%

N/A6.4%

In-Law7.8%

Spouse 29.9%

Parent14.5%

Sibling 20.0%

Family Member Involved

10

THE BUSINESSES

0%

5%

10%

15%

20%

25%

30%

35%

Employer/Home Based

9.4

Employer/Not HomeBased

13.4

>40 Hrs/WkHome Based

26.4

>40 Hrs/WkNot HomeBased

Part Time

34.0

19.2

Percent of Businesses StartingWith Selected Size Characteristics

°


Employ OthersYes 19.2% 37.4% 23.1%No 80.2 61.3 76.1N/A 0.6 1.3 0.8Total 100.0 100.0 100.0

Home-BasedYes 71.2% 50.3% 66.8%No 28.0 48.3 32.3N/A 0.8 1.4 0.9Total 100.0 100.0 100.0

Measures of Business Substance


Production+14.5%Other, N/A

6.0%

Distribution#

27.5%

Started Business

Service52.0%

Production+14.0% Other, N/A

5.5%

Distribution#

30.3%

Total

Service50.2%

Other, N/A 3.4% Distribution#

39.2%

Purchased Business

Service43.2%

Production+13.2%

Industry of Business

Profitability∆

Second Month11.4%After

Second Month35.3%

N/A4.3%

Not Yet Profitable38.2%

First Month10.8%

First Positive Cash Flowor Operating Profit

12

THE FINANCES

Accumulating the Capital


Investment at Business Opening<$500 20.5% 35.4% 23.2%$500-$2,499 15.4 17.1 15.8$2,500-$4,999 6.6 3.1 6.0$5,000-$9,999 17.0 6.4 15.2$10,000-$19,999 9.3 4.1 8.3$20,000-$49,999 9.8 7.7 9.3$50,000-$99,999 5.0 6.7 5.3$100,000+ 7.0 5.1 6.6N/A 9.4 14.5 10.3Total 100.0 100.0 100.0

Median $4,250.00 $950.00 $3,900.00Meanº $18,582.00 $16,505.00 $18,113.00

Time to Accumulate the Investment< One Month 45.3% 46.4% 45.7%1-3 Months 28.2 29.9 28.44-12 Months 16.9 8.1 15.013-48 Months 3.6 6.5 4.248+ Months 1.1 6.2 2.1N/A 4.9 2.9 4.6Total 100.0 100.0 100.0

Median 1 month 1 month 1 monthMean 5 months 11 months 6 months

Accumulating Capital-Biggest Problem?Yes 27.9% 26.6% 27.7%No 71.5 67.5 70.8N/A 0.6 5.9 1.5Total 100.0 100.0 100.0

If Not Capital-What?Locating Customers 23.4% 23.4% 23.2%Locating Supplies/Suppliers 6.9 0.8 6.0Getting Everything Organized 21.0 21.2 20.9Obtaining the Necessary People 5.5 7.7 5.9Finding Right Time to Launch 8.3 6.2 8.1(Accumulating Capital, Above) (27.9) (26.6) (27.7)N/A 7.0 14.1 8.2Total 100.0 100.0 100.0


PRIOR START ACTIVITY


Started Business PreviouslyYes 15.7% 19.1% 16.3%No 84.3 80.3 83.6N/A 0.0 0.6 0.1Total 100.0 100.0 100.0

Owner Experience

3-5 Business23.6%

6+ Businesses 9.5%

N/A 5.2%

Two Businesses26.2%

Number Previously Started

One Business35.5%

Any Still Operating?

No42.1%

N/A 4.0%

10-99 Employees27.5%

Largest of Prior Businesses

100+ Employees1.6%

No Employees15.0%

5-9 Employees21.3%

1-4 Employees30.6%

Yes57.9%

Prior Starts

14


Closed10.9% Other, N/A

2.6%

Sold/Transferred27.2%

Businesses

Became Inactive 791


Sold/Transferred 363

Closed 145

Became Inactive59.3%

Closed12.2% Other, N/A

4.7%

Sold/Transferred27.0%

People

Became Inactive 1,091


Sold/Transferred 526

Closed 237

Became Inactive56.1%

In ThousandsIn Thousands

Two Stops2.4%

Three+ Stops3.0%

N/A0.4%One Stop

94.2%

Four+ Owners6.0%

Three Owners5.4%

Two Owners16.6%

N/A1.3%

One Owner70.7%

Businesses Stopped and People Who Stopped Them- 1998

Stops* Per Household‡ “Active” Owners Per Stop*


THE PEOPLE

Age, Sex and Ethnicity of People Stopping Businesses

Closed Sold DeactivatedCharacteristic Business Business Business Total Incidence†

Age (Years)<25 3.5% 2.4% 4.5% 3.8% 0.325-29 8.9 3.7 8.7 7.3 0.830-34 10.1 10.6 17.1 14.7 1.435-39 9.4 14.4 13.6 13.7 1.240-44 8.2 14.7 15.9 14.6 1.345-49 20.5 9.2 12.0 12.1 1.350-54 21.7 15.0 12.0 13.8 1.855-59 4.1 9.1 5.9 6.5 1.160-64 3.7 3.4 1.5 2.3 0.465+ 8.1 15.2 4.6 7.8 0.6N/A 1.8 2.3 4.2 3.4 –Total 100.0 100.0 100.0 100.0 1.0

SexMale 56.2% 73.9% 68.0% 68.5% 1.4Female 43.8 26.1 31.2 31.0 0.6N/A 0.0 0.0 0.8 0.5 –Total 100.0 100.0 100.0 100.0 1.0

RaceBlack 6.7% 1.6% 5.1% 4.3% 0.3White 72.3 92.9 89.8 88.8 1.1Other 16.4 4.2 3.8 5.2 1.2N/A 4.6 1.3 1.3 1.7 –Total 100.0 100.0 100.0 100.0 1.0

HispanicYes 10.3% 1.8% 4.7% 4.5% 0.4No 89.7 96.1 94.0 94.1 1.1N/A 0.0 2.1 1.3 1.4 –Total 100.0 100.0 100.0 100.0 1.0

16

Closed Sold DeactivatedCharacteristic Business Business Business Total Incidence†

Education (Highest Level)<Grade 12 13.3% 3.8% 4.7% 5.4% 0.3High School Graduate 35.5 18.4 22.2 22.7 0.7Some College 25.7 20.6 34.3 29.4 1.4Trade/Vocational School 0.0 1.3 2.8 2.1 0.6College Graduate 16.6 36.0 22.4 25.7 1.5Post-Graduate/

Professional Degree 8.9 18.5 13.2 14.0 1.7N/A 0.0 1.4 0.4 0.7 –Total 100.0 100.0 100.0 100.0 1.0

Household Income($000)<10 1.4% 7.4% 3.3% 4.2% 0.410-19 2.1 1.2 3.4 2.6 0.220-29 22.5 10.9 6.8 9.6 0.730-39 10.1 11.1 12.7 12.4 1.040-59 12.0 14.5 24.2 20.0 1.160-74 14.5 13.7 9.7 11.3 1.075-99 12.4 7.1 9.9 9.3 1.1100+ 10.8 19.1 15.8 16.0 1.8N/A 14.2 15.0 14.2 14.6 –Total 100.0 100.0 100.0 100.0 1.0

Marital StatusSingle 9.6% 11.7% 22.4% 18.3% 0.8Married 81.9 70.4 62.0 66.4 1.2Separated 1.6 4.7 2.4 2.9 1.2Divorced 6.9 6.3 10.1 8.6 0.9Widowed 0.0 4.4 2.4 2.6 0.2N/A 0.0 2.5 0.7 1.2 –Total 100.0 100.0 100.0 100.0 1.0

Employment Status (30 days after stop)Employed 57.3% 64.3% 72.0% 68.2% 1.1Unemployed 7.3 9.8 6.5 7.5 2.5Retired 13.4 17.8 5.3 9.6 –Not Employed 22.0 8.1 13.4 12.7 0.4N/A 0.0 0.0 2.8 1.9 –Total 100.0 100.0 100.0 100.0 1.0

Education, Household Income, Marital Status and Employment Status of People Stopping Businesses


0%

10%

20%

30%

40%

50%

60%

1.6

Hours Per Week

58.9

10.18.812.5

7.210.3 9.9 7.3

29.1

39.5

<10 10-19 20-29 30-39 40-49 50-59 60-69 70+ N/A<40§ 40+§

Hours/Week Worked in Business DuringLast Month of Business Operation

18

THE BUSINESSES

0%

5%

10%

15%

20%

25%

30%

35%

20.8

Part Time°

10.2

Employer/HomeBased

18.3

40+Hrs/WkHomeBased

25.4

40+Hrs/WkNot HomeBased

30.1

Employer/Not HomeBased

Percent of Businesses Stopping With Selected Size Characteristics

Closed Sold DeactivatedCharacteristic Business Business Business Total

Employ OthersYes 55.0% 68.8% 27.6% 41.7%No 41.7 29.6 71.8 57.0N/A 3.3 1.6 0.6 1.3Total 100.0 100.0 100.0 100.0

Home-BasedYes 24.3% 22.7% 62.0% 45.5%No 73.1 75.7 36.3 52.3N/A 2.6 1.6 1.7 2.2Total 100.0 100.0 100.0 100.0

Measures of Business Substance


Production+17.8% Other, N/A

14.9%

Distribution#

28.7%

Closed Business

Service38.6%


5.1%

Distribution#

28.4%

Deactivated Business

Service50.8%


8.7%

Distribution#

31.0%

Total

Service45.4%

Other, N/A 11.1%

Distribution#

38.8%

Sold Business

Service40.1%

Production+10.0%

Industry of Business

Duration of Business


Years Operating Prior to Termination<1 Year 17.9% 3.6% 12.9% 10.6%1-2 Years 7.7 21.3 30.2 25.23-5 Years 24.8 15.3 21.9 20.26-10 Years 7.2 17.7 12.8 13.711-20 Years 19.6 12.9 13.3 13.821+ Years 4.1 27.1 7.2 13.0N/A 18.7 2.1 1.7 3.5Total 100.0 100.0 100.0 100.0

20

THE FINANCES

Profitability at Termination


Positive Cash Flow in Last MonthYes 48.1% 79.0% 45.0% 54.6%No 46.0 20.4 53.8 43.2N/A 5.9 0.6 1.2 2.2Total 100.0 100.0 100.0 100.0

Profitability Over Business Life-TimeProfitable 49.3% 61.6% 44.2% 48.9%Break-Even 3.4 23.6 26.7 23.6Losing 47.3 14.4 28.3 26.9N/A 0.0 0.4 0.8 0.6Total 100.0 100.0 100.0 100.0

Primary Reason to TerminatePerformance

of Business 52.0% 34.5% 38.4% 38.9%Opportunities

Elsewhere 26.3 41.7 41.5 40.0N/A 21.7 23.8 20.1 21.1Total 100.0 100.0 100.0 100.0

Financially “Better Off” Than When Business StartedYes 50.5% 74.8% 64.1% 65.2%No 36.1 20.2 26.0 25.6(No Difference) 9.2 5.0 8.5 7.4N/A 4.2 0.0 1.4 1.8Total 100.0 100.0 100.0 100.0

0%

30%

60%

51.8

1.9

NoBetter-off

Yes N/A N/AYes NoWorse-off

46.3

39.1

4.2

56.7

Business

Not to Business

N/A

Financial Status Change Due Primarily to Business


Notes: Pages 5-13

*Starts include de novo starts and purchases

†Incidence means the actual occurrence in the group compared to its expected occurrence

‡Among households with at least one start

§Includes those who could not provide hours, but could report < > than 40 hours per week

°Defined as a non-employer, based in the home, and working 40 or fewer hours per weekduring first month of operation

∆Average sample firm is three months old

ºAssumes $100,000+ = $125,000

+Production industries include agriculture, construction, manufacturing and mining.#Distribution industries include wholesale and retail

Notes: Pages 14-21

*Stops include all forms of termination

†Incidence means the actual occurrence in the group compared to its expected occurrence

‡Among households with at least one stop

§Includes those who could not provide hours, but could report < > than 40 hours per week

°Defined as a non-employer, based in the home, and working 40 or fewer hours per weekduring first month of operation

+Production industries include agriculture, construction, manufacturing and mining#Distribution industries include wholesale and retail

The Business Experience


Would Go Into Business AgainYes 55.4% 62.8% 74.8% 67.9%

(Definitely) (20.6) (28.4) (38.1) (32.5)(Probably) (13.0) (15.8) (12.1) (13.4)(Possibly) (21.8) (18.6) (24.6) (22.0)

No 44.6 35.3 23.0 30.0(Possibly) (4.7) (3.9) (1.6) (3.4)(Probably) (11.2) (7.9) (6.3) (7.6)(Definitely) (28.7) (23.5) (15.1) (19.0)

N/A 0.0 1.9 2.2 2.1Total 100.0 100.0 100.0 100.0

RETROSPECTIVE

22


Today’s Wells Fargo stands asone of the premier banking andfinancial service institutions

in the nation. With a proud 150 yearlegacy of helping customers reach theirgoals, a firm commitment to continueproviding value and leadership in all of our endeavors, and a clearunderstanding of the new opportunitiesfacing our customers and our industry,Wells Fargo is uniquely poised to meetthe diverse banking and financial needsof America’s business community in the21st Century.

Founded in 1852, during the heartof the California Gold Rush, WellsFargo & Co. provided the criticalbanking and express services needed ina booming new transcontinentaleconomy. During one of America’sgreatest periods of expansion,opportunity and speculation, WellsFargo established its reputation for“coming through” for its customers, andproved itself one of the nations mostinnovative and dependable companies.

Today Wells Fargo continues to“come through” for its customers inways very similar to those establishedby Henry Wells and William Fargo allthose years ago. The fundamentalsremain the same. Speed, convenience,innovation, integrity and reliabilitycontinue as hallmark traits of WellsFargo in the year 2000, just as theywere in 1852. Adherence to thesefundamentals has helped ourcustomers achieve great successthroughout all of the ups and downs ofthe last century and a half.

As the new century begins, WellsFargo provides significant advantages

for our customers in managing all oftheir banking and financial serviceneeds. Whatever our business customersrequire to reach important goals, weoffer a broad range of products andservices to help them get there.

In 1999 Wells Fargo ranked firstin the nation in small business lendingas measured by number of loansmade. We also ranked first in thecountry in other important areas:farm lending, student loans,commercial real estate lending,supermarket banking, insuranceagency sales by a bankingorganization, and in total number ofbanking locations across NorthAmerica, and along the Canadian andMexican borders. We’re also amongthe top five in middle-market lending,correspondent banking, auto finance,mutual funds under management anddebit card transactions.

Wells Fargo continues crossingfrontiers to deliver the servicesrequired in this new era of expansionand opportunity. Today’s Wells Fargocovers 22 states with over 5,800staffed banking locations and 6,000ATMs, 24 hour telephone bankingservices and more than one millioncustomers banking on-line.

From all of us at Wells Fargo, wewould like to thank and congratulatethe National Federation ofIndependent Business for their hardwork and success in producing thisunique and important study. It hasonce again been our pleasure andprivilege to partner with NFIB indelivering insightful information toAmerica’s small business community.

Wells Fargo – The Bank for Small Business


NFIB Education Foundation

The NFIB EducationFoundation is a smallbusiness-oriented research

and education organization affiliatedwith the National Federation ofIndependent Business (NFIB). The Foundation is located inWashington, DC. It was established in 1980 as a vehicle to explore thepolicy-related problems smallbusiness encounters, a mission itretains twenty years later.

The Foundation has sponsoredor conducted a number of smallbusiness-oriented research andinformational projects. In 1999, for example, it published two reportsin the four part series, SmallBusiness and the Y2K Problem. It also published research reports on health insurance in smallbusiness, small business owner use of the Internet, and the effect ofSocial Security on small businessowner retirement income. Monthlyupdates on the state of the smallbusiness economy have been

produced since 1986; quarterlyupdates were published prior. The Foundation is currentlyconstructing a regulatory model toestimate the direct and indirectimpacts of proposed regulations onsmaller firms. And, it is preparing to conduct its quadrennial SmallBusiness Problems and Prioritiessurvey early next year.

NFIB was founded in 1943 by C. Wilson Harder in Burlingame,California. The organization’spurpose was to represent smallbusinessman and women before the Federal government, a missionsubsequently expanded to includethe state capitals. From the outset,NFIB has had one fundamental tenet that separates it from virtuallyall other advocacy organizations. Its policy positions are establishedby membership vote rather than by committee or staff. NFIB’smembership has grown to over one-half million members scatteredacross the United States.

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For additional copies write:

NFIB Education Foundation

600 Maryland Avenue, SW

Suite 700

Washington, DC 20024

$25.00

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