Kauffman Firm Survey: Results from the Baseline and First Follow-Up Surveys

The Kauffman Firm Survey is a panel study of 4,928 businesses founded in 2004 that are being tracked annually over their first eight years. The survey focuses on the nature of new business formation activity, characteristics of the strategy, offerings, and employment patterns of new businesses. It also looks at the nature of the financial and organizational arrangements of these businesses, as well as the characteristics of their founders. This report highlights findings from the first two years. Nearly 60 percent of the businesses had no employees in their first year. Just under three-fourths had one employee or less, while about one-quarter had two or more employees. Nearly 70 percent of businesses were owned by men and slightly more than 30 percent were owned by women. Slightly fewer than 9 percent of firms closed in calendar year 2005, and the survival rates vary by owner demographics. For example, only 88 percent of black-owned businesses survived, compared with 92 percent of white-owned businesses and 91 percent of Asian-owned businesses.