The Market Structure Analyzer: Business Size Distribution by Industry (2022)

What if you could see that Florida’s accommodation and food services sector has 20.8 employees per establishment while New York has 13.5—revealing exactly how business size distribution varies by location? This Market Structure Analyzer reveals business size distribution by industry—and how you can position yourself in markets with the business size structure that matches your competitive strategy.

The data shows dramatic differences: accommodation and food services (NAICS 72) average employees per establishment ranges from 20.8 in Florida to 13.5 in New York—a 1.5x difference. This isn’t just about geography—it’s about understanding market structure, size distribution, and industry structure that directly impact your competitive positioning and market entry strategy.

Note: Full size category breakdown (1-4, 5-9, 10-19 employees, etc.) requires EMPSZ-filtered data. This analysis uses average employees per establishment (EMP/ESTAB) to indicate size distribution patterns, acknowledging that full category breakdown would require EMPSZ data.

Key Takeaways

• Market structure varies dramatically by location—Accommodation and food services average employees per establishment ranges from 37.7 in Nevada to 13.5 in New York (2.8x difference), revealing clear size distribution patterns
• Size distribution reveals industry structure—Markets with higher average employees per establishment (18+ per establishment) indicate larger average business sizes with different competitive dynamics
• Location strategy must account for market structure—Choosing markets where business size distribution matches your competitive strategy provides access to appropriate market structures
• Larger average business sizes offer different competitive dynamics—Markets with larger average business sizes (18+ per establishment) offer different competitive dynamics and market structures than those with smaller average sizes
• Balanced approach often offers best opportunity—Markets with moderate average business sizes (14-18 employees per establishment) offer balanced size distribution with mix of small and large businesses

Note: Full size category breakdown requires EMPSZ-filtered data. This analysis uses average employees per establishment to indicate size distribution patterns.

Analyze market structure to see business size distribution by industry. This tool reveals industry structure patterns that

This analysis examines County Business Patterns (CBP) data from the U.S. Census Bureau to analyze market structure—business size distribution by industry, revealing how businesses are distributed by size across all U.S. states. You’ll discover which states have larger vs. smaller average business sizes, how size distribution varies by industry, and where opportunities exist for businesses in different size categories.

What You’ll Discover:

• State rankings by average employees per establishment (size distribution indicators)
• Industry-specific size distribution patterns revealing business size structure by location
• Location-specific structure indicators impacting competitive strategy
• Market structure analysis by industry and location
• Size distribution indicators for strategic business decisions

Why This Matters: Understanding market structure helps you identify where business size distribution matches your competitive strategy, assess market structure differences, and make strategic location decisions. Markets with different size distributions offer different competitive dynamics and market structures.

Note: Full size category breakdown (1-4, 5-9, 10-19 employees, etc.) requires EMPSZ-filtered data. This analysis uses average employees per establishment (EMP/ESTAB) to indicate size distribution patterns.

Market Structure Varies Dramatically by Location

The Numbers: Accommodation and food services average employees per establishment ranges from 37.7 in Nevada to 13.5 in New York—a 2.8x difference. This means Nevada has 2.8x larger average business sizes than New York, indicating very different market structures.

So What? Different locations show dramatically different market structures, indicating vastly different business size distributions and competitive dynamics. Understanding these patterns helps you identify where business size structure matches your competitive strategy.

How to Use This: If you’re targeting markets with larger average business sizes, markets with high average employees per establishment (18+ per establishment) like Nevada (37.7), Florida (20.8), and Texas (19.5) indicate larger average business sizes. Target these markets for access to different competitive dynamics.

Size Distribution Reveals Industry Structure

The Numbers: States like Nevada (37.7 employees per establishment), Florida (20.8), and Texas (19.5) have the largest average business sizes in accommodation and food services, indicating different market structures and competitive dynamics.

So What? Market structure indicates industry structure. Markets with higher average business sizes typically have different competitive dynamics, potentially more established businesses, and different market structures than those with smaller average sizes.

How to Use This: Target markets where business size distribution matches your competitive strategy. Markets with larger average business sizes (18+ per establishment) offer different competitive dynamics than those with smaller average sizes (<14 per establishment).

Location Strategy Must Account for Market Structure

The Numbers: The difference between the largest average business size state (Nevada, 37.7 employees per establishment) and smallest average business size states (New York, 13.5) is 2.8x, meaning dramatically different market structures and competitive dynamics.

So What? Market structure directly impacts your competitive position. Markets where business size distribution matches your competitive strategy offer appropriate market structures. Your location choice should prioritize markets with size distributions that match your business model.

How to Use This: For businesses requiring specific competitive dynamics, target markets where business size distribution matches your competitive strategy. Markets with larger average business sizes (18+ per establishment) offer different competitive dynamics than those with smaller average sizes.

Red Flags

• Market Structure-Business Model Mismatch: Markets where business size distribution doesn’t match your business model may create competitive disadvantages
• Very Small Average Business Sizes (<12 employees per establishment): May indicate limited market structure and lack of established businesses
• Declining Average Business Sizes: Markets where average business sizes are decreasing may signal market structure decline

Green Lights

• Larger Average Business Sizes (18+ employees per establishment): Indicates larger average business sizes with different competitive dynamics and market structures
• Market Structure-Business Model Alignment: Markets where business size distribution matches your business model offer appropriate competitive dynamics
• Consistent Market Structure: Markets with consistently appropriate size distributions offer stable competitive dynamics
• Diverse Market Structure: Markets with diverse size distributions offer flexibility and multiple competitive positioning options

How to Use This Data

Follow this step-by-step process to identify market structure and make data-driven location decisions:

Step 1: Identify Market Structure Patterns for Your Industry

Compare average employees per establishment across states for your industry (NAICS code):

• State-level: Get broad market structure identification
• Industry-specific: Use NAICS-filtered data for your specific industry
• Structure Ranking: Rank states by average employees per establishment to identify market structure patterns

Action: Create a spreadsheet with all 50 states. List average employees per establishment for your industry in each. Rank by structure to identify markets with appropriate size distributions.

Step 2: Assess Market Structure Benefits

Market structure indicates industry structure and competitive dynamics:

• Industry Structure: Different size distributions indicate different industry structures
• Competitive Dynamics: Markets with larger average business sizes have different competitive dynamics
• Business Model Fit: Size distribution should match your business model and competitive strategy

Action: For each candidate market, assess market structure benefits. Identify markets with size distributions that match your competitive strategy and business model.

Step 3: Evaluate Market Structure vs. Competitive Strategy

Balance market structure benefits with your competitive strategy:

• Larger Average Business Sizes, Established Competition: May offer different competitive dynamics but also more established competition
• Moderate Average Business Sizes, Balanced Competition: Offers best balance of competitive dynamics
• Smaller Average Business Sizes, Less Competition: May offer less competition but also different market structures

Action: For each candidate market, evaluate market structure vs. competitive strategy. Choose markets that offer size distributions with appropriate competitive dynamics.

Step 4: Choose Your Market Structure Location

Select markets with size distributions that match your business needs.

Action: Create a decision matrix scoring each location on: market structure fit (40%), competitive dynamics (30%), and market structure (30%). Choose the location with highest score.

Step 5: Make Your Location Decision

Combine market structure analysis with other factors (business climate, market size) to choose your location.

Action: Create a final decision matrix scoring each location on: market structure fit (30%), competitive dynamics (30%), business climate (20%), and market size (20%).

Common Use Cases

Scenario 1: Seeking Larger Average Business Sizes → Focus on markets with larger average business sizes (18+ employees per establishment). These markets offer different competitive dynamics and market structures.

Scenario 2: Balanced Market Structure → Target markets with moderate average business sizes (14-18 employees per establishment) that offer balanced size distribution with mix of small and large businesses.

Scenario 3: Smaller Average Business Sizes → Consider markets with smaller average business sizes (<14 employees per establishment) that may offer different competitive dynamics with more small businesses.

Scenario 4: Risk-Averse Strategy → Focus on markets with moderate-to-large average business sizes (14-18+ employees per establishment) that offer proven market structures with stable competitive dynamics.

Questions to Ask Yourself

• How important is market structure vs. competitive dynamics for my business?
• Do I need larger average business sizes (18+ per establishment) or is moderate size distribution (14-18) sufficient?
• What market structure benefits do I need—industry structure, competitive dynamics, or business model fit?
• Am I entering a validated market structure or an emerging one?

Action Items Checklist

• Identify market structure patterns for your industry by ranking states by average employees per establishment
• Assess market structure benefits (industry structure, competitive dynamics) in candidate markets
• Evaluate market structure vs. competitive strategy for each candidate market
• Research market structure dynamics and competitive positioning in candidate markets
• Compare market structure benefits with business climate and market size
• Create a decision matrix scoring each location on market structure fit, competitive dynamics, and market structure
• Consult with Business Initiative for market structure analysis and location strategy guidance

Step 4: Take action. Use the insights to make better decisions.

Industry-Specific Recommendations

Accommodation and Food Services (NAICS 72): Target markets with larger average business sizes (18+ employees per establishment) like Nevada (37.7), Florida (20.8), and Texas (19.5). Accommodation and food services benefit from larger average business sizes with different competitive dynamics.

Professional Services (NAICS 54): Focus on markets with moderate average business sizes (14-18 employees per establishment). Professional services benefit from balanced size distribution with mix of small and large businesses.

Retail Trade (NAICS 44-45): Look for markets with moderate average business sizes (14-18 employees per establishment) for retail. Retail businesses benefit from balanced size distribution.

Manufacturing (NAICS 31-33): Prioritize markets with larger average business sizes (18+ employees per establishment) for manufacturing. Manufacturing businesses benefit from larger average business sizes with different competitive dynamics.

Health Care (NAICS 62): Consider markets with moderate-to-large average business sizes (14-18+ employees per establishment) for health care. Health care businesses benefit from balanced size distribution.

Common Mistakes to Avoid

Mistake 1: Using Only Average Employees per Establishment Without EMPSZ Data Average employees per establishment shows market structure patterns but doesn’t reveal full size category breakdown. Always use EMPSZ-filtered data when available for full size category analysis.

Mistake 2: Ignoring Competitive Dynamics in Market Structure Analysis Market structure shows industry structure but doesn’t reveal competitive dynamics. Don’t ignore competitive dynamics—different market structures have different competitive implications.

Mistake 3: Not Considering Industry-Specific Market Structures Overall market structure doesn’t reflect your industry’s specific structure patterns. Always use NAICS-filtered data for your specific industry to assess market structure.

Mistake 4: Overlooking Business Model Fit Market structure shows industry structure but doesn’t reveal business model fit. Don’t overlook business model fit—your business model should align with market structure.

Mistake 5: Not Validating with Market Research Market structure data shows patterns but doesn’t reveal competitive positioning, market dynamics, or business model fit. Always validate with market research and local analysis.

Optimization Strategies

For Maximum Market Structure Benefits: Target markets with larger average business sizes (18+ employees per establishment) that offer different competitive dynamics and market structures.

For Balanced Approach: Focus on markets with moderate average business sizes (14-18 employees per establishment) that offer balanced size distribution with mix of small and large businesses.

For Smaller Average Business Sizes: Consider markets with smaller average business sizes (<14 employees per establishment) that may offer different competitive dynamics with more small businesses.

For Risk-Averse Strategy: Prioritize markets with moderate-to-large average business sizes (14-18+ employees per establishment) that offer proven market structures with stable competitive dynamics.

Timing Considerations

Best Time to Enter Larger Average Business Size Markets: When you have resources ready and competitive positioning complete. Larger average business size markets reward businesses that can leverage different competitive dynamics.

Best Time to Enter Smaller Average Business Size Markets: When you have small business positioning and can serve smaller market structures. Smaller average business size markets reward businesses that can leverage different competitive dynamics.

When to Reassess: Review market structure data annually when new CBP releases become available. Market positions change, and what was appropriate market structure 2-3 years ago may not be today.

Resource Recommendations

For Market Structure Analysis:

• Census Bureau County Business Patterns (official CBP data source)
• NAICS code lookup tools (identify your industry classification)
• EMPSZ-filtered data (full size category breakdown when available)
• State economic development websites (local market structure insights)

For Location Support:

• Business Initiative location strategy services
• Local chamber of commerce (county-level market structure information)
• State Secretary of State websites (business registration requirements)

For Market Structure Research:

• Combine CBP establishment and employment data to assess market structure
• Research local market structure dynamics and competitive positioning

• Consult with Business Initiative for personalized market structure analysis and location guidance

• Consider your specific situation: What works for others might not work for you. You can make mistakes by copying without thinking.

FAQs - Frequently Asked Questions About The Market Structure Analyzer: Business Size

In Summary

Our comprehensive exploration of market structure analysis (2022) has revealed critical insights into business size patterns, industry structure, and location opportunities that can inform strategic business decisions.

Key Findings:

• Market structure varies dramatically by location—accommodation and food services average employees per establishment ranges from 37.7 in Nevada to 13.5 in New York (2.8x difference)
• Size distribution reveals industry structure—markets with higher average employees per establishment (18+ per establishment) indicate larger average business sizes with different competitive dynamics
• Location strategy must account for market structure—choosing markets where business size distribution matches your competitive strategy provides access to appropriate market structures
• Larger average business sizes offer different competitive dynamics—markets with larger average business sizes (18+ per establishment) offer different competitive dynamics and market structures
• Balanced approach often offers best opportunity—markets with moderate average business sizes (14-18 employees per establishment) offer balanced size distribution with mix of small and large businesses

What This Means for Your Business: Understanding market structure helps you identify where business size distribution matches your competitive strategy, assess industry structure differences, and make strategic location decisions. Markets with different size distributions offer different competitive dynamics and market structures. The best approach balances market structure fit (appropriate industry structure) with competitive dynamics and business climate.

Practical Applications:

• Location Strategy: Use market structure data to identify markets where business size distribution matches your competitive strategy (larger average sizes for established competition, smaller for less competition)
• Market Analysis: Compare market structure across locations to understand industry structure and competitive dynamics
• Competitive Positioning: Target markets with size distributions that match your business model for appropriate competitive dynamics
• Strategic Planning: Prioritize markets with appropriate size distributions (14-18+ employees per establishment) for balanced market structures

Next Steps:

1. Identify market structure patterns for your industry by ranking states by average employees per establishment
2. Assess market structure benefits (industry structure, competitive dynamics) in candidate markets
3. Evaluate market structure vs. competitive strategy for each candidate market
4. Compare market structure benefits with business climate and market size
5. Consult with Business Initiative for market structure analysis and location strategy guidance

Business Initiative offers expert services to help you leverage this information:

• Explore Profit Margin
• Explore Break Even Analysis
• Explore Break Even

For personalized advice, schedule a consultation with Business Initiative or reach out through our contact form.

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