[Home](https://stoneforgegroup.com/) · Research 01 – Research # What federal business data says about owner-led services firms Original analysis of federal business data. Every figure is sourced to a named dataset and year, the method is stated in full, and the underlying tables are published so anyone can check them. ## Executive summary This work draws on two federal datasets, the Census Bureau's Annual Business Survey and its Business Dynamics Statistics, and asks a plain question of each: what does the data actually show about owner-led services firms as they get larger and older, once the comparisons are made carefully. [The Leverage Gap](https://stoneforgegroup.com/research/the-leverage-gap/) measures revenue against payroll across seven employment-size bands in four sectors; [Firm Size and Firm Age](https://stoneforgegroup.com/research/firm-size-and-age/) measures firm size against firm age across eleven age bands in five sectors. The two studies point in different directions on the question an owner actually asks. Revenue per dollar of payroll in professional services falls from $3.01 in the 5-to-9-employee band to $2.38 in the 250-to-499 band, about 21% less, while construction holds close to flat across the same range. Firm size, meanwhile, rises only modestly with age: professional services firms average 19.2 employees at age five and 25.0 at age twenty-six or more, about 30% more, once the population is held to firms with five or more employees throughout. The far larger 8.6-times rise visible when every firm is counted, including the smallest, is almost entirely a composition effect – younger age bands are full of one-to-four-employee firms in a way older ones are not – rather than evidence of a growth curve. Read together, these figures say that getting bigger in professional services buys real headcount, slowly and only partway, while returning a smaller multiple of revenue for every payroll dollar spent. Neither pattern says a given firm cannot grow past it; each describes what the federal data show for the population it actually contains, not what any one firm's future holds. Both studies compare different firms at different sizes or ages in the same year, not one firm followed as it grows – so neither can show a trajectory, only a snapshot. Current size is not peak size, and survivors of acquisition or failure are not a random sample of everyone who started. Read the studies themselves for the qualifications each figure carries. ## The studies - [The Leverage Gap](https://stoneforgegroup.com/research/the-leverage-gap/) Professional services firms in the 250 to 499 employee band generate about 21% less revenue per dollar of payroll than firms with 5 to 9 employees. Construction firms generate about 3% more. The difference between a small professional services firm and a large one is not just headcount – revenue per dollar of payroll falls too. - [Firm Size and Firm Age](https://stoneforgegroup.com/research/firm-size-and-age/) Among professional services firms with five or more employees, the share still under 20 employees falls from 79.2% at age 5 to 70.8% at age 26 or more, and mean firm size rises from 19.2 to 25.0 employees – about 30%. Across all firms, including the smallest, the same comparison looks like an 8.6-times rise; that gap is almost entirely a composition effect, not evidence against a plateau. ## Where the data comes from The data comes from two federal sources, both free and public: the **Business Dynamics Statistics** from the Census Bureau counts firms by age, size and industry back to 1978, whilst the **Annual Business Survey** reports revenue, employment and owner characteristics. The computed tables are published here as CSV: [revenue and employment by sector and size, 2022](https://stoneforgegroup.com/assets/data/leverage-by-sector-size-2022.csv) and [firm size by sector and age, 2023](https://stoneforgegroup.com/assets/data/plateau-by-sector-age-2023.csv). The firm-age table is analyzed in full in [Firm Size and Firm Age](https://stoneforgegroup.com/research/firm-size-and-age/), above. ## What this data cannot tell you Stated plainly, because a number without its limits is not evidence. **Current size is not peak size.** The data records where a firm is now, not the largest it ever was. A firm that reached forty people and fell back to eight is counted among the small ones – so these figures show which firms *are not past* a threshold, never that they *never got past* it. **Survivors are not a random sample.** Firms that grow substantially often get acquired, which removes them from the independent-firm counts. Some of the pattern may reflect who is left to count. **These are different firms, not the same firms followed over time.** Comparing a five-year-old firm with a thirty-year-old one in the same year is not the same as watching one firm age. The same applies to comparing a small firm with a large one: it is a snapshot of different firms at different sizes in one year, not one firm growing. **Records begin in 1978.** Firms older than the series cannot have their true age measured, so figures for firms past twenty-six years old are only reliable from about 2004 onward. **These figures are a sample, not a census.** The Annual Business Survey covers roughly 230,000 employer businesses drawn by stratified sample, not every firm in the country, so every figure carries sampling error on top of the limits above. ## Citing this work Stoneforge Consulting Group, *What federal business data says about owner-led services firms*, 2026. Published 7 August 2026. Analysis of US Census Bureau Business Dynamics Statistics (2023) and Annual Business Survey (2022). https://stoneforgegroup.com/research/ ## Related These studies answer *how much*. For *why*, see [why a business feels stuck](https://stoneforgegroup.com/questions/the-plateau/) and [the diagnosis behind a plateau](https://stoneforgegroup.com/questions/why-has-my-business-plateaued/).