Encouraging Small Business Success in New York City and Northern New Jersey
What Firms Value Most
Small businesses are a vital component of the regional economy. In New York City, more than 200,000 firms qualify as small businesses, and together they account for two-thirds of the city’s private sector jobs. Although small businesses by definition employ fewer than 500 employees, 96 percent of New York’s small firms have fewer than 50 employees. Northern New Jersey has roughly the same number of small firms and a similar distribution of employment.
This survey of small businesses in New York City and Northern New Jersey finds that these businesses broadly agree on the three most important factors to success:
- Overall cost of business;
- Proximity to clients and markets;
- Access to a skilled labor force.
The survey also reveals that about one in seven business leaders would move for a cost savings of less than 10 percent, and about four in 10 business leaders would relocate for a cost savings of greater than 20 percent. Finally, the share of firms that have obtained bank credit is notably larger in northern New Jersey than in New York City.
This report features findings of a study sponsored by the Citizens Budget Commission and the Federal Reserve Bank of New York.
In December 2004, ORC MACRO conducted a statistically representative survey with a sample pool limited to firms in New York City and northern New Jersey that have fewer than 500 employees and annual sales greater than $5 million. In New York City, 6,785 firms fit these criteria, whereas in northern New Jersey, 6,396 firms (in the Bergen-Passaic, Jersey City, Newark, Monmouth-Ocean, and Middlesex-Somerset-Hunterdon metropolitan areas) fit these criteria. In all, 801 interviews were conducted—400 in New York City and 401 in northern New Jersey. Eighty percent of the interviews were conducted with the CEO, CFO, president, or owner. Rae D. Rosen, Assistant Vice President, Federal Reserve Bank of New York, and Marcia Van Wagner, Deputy Director of Research, Citizens Budget Commission, developed the survey and directed the study.