Transforming your vision into a lucrative small business is empowering yet challenging. Still, this is possible if you know the ins and outs of what makes a small business succeed. If you are a small business owner—or plan to become one—you need to familiarize yourself with the most recent trends. Check out these small business statistics to learn how you can create your own success story.
It turns out that you can have your business up and running in less than a business week. The UK follows closely with 5 days needed to start a business there. This is significantly shorter compared to many other countries worldwide. For instance, starting a business takes 9 days in China, 11 in Ireland, and 18 days in India.
(The World Bank)
As US small business statistics show, 31.7 million businesses have fewer than 500 employees. 98.2% of them have less than 100 employees, and firms with less than 20 employees make up 89% of all businesses in the US.
Small businesses are very important to the economy. They create 1.6 million new jobs annually and are responsible for 60.6 million jobs across the US, which accounts for 47.1% of the total US workforce.
When observing small business statistics by state, it’s evident that California leads the pack with 4,203,260 small businesses. Texas comes next with 2,679,964, followed by Florida with 2,494,279, and New York with 2,168,799 small businesses.
(Small Biz Trends)
Close to 6 million of all UK businesses are small companies. As shown by recent small business statistics, UK sees nearly a fifth of small companies operating in the construction industry. Professional, scientific, and technical activities make up for 15% of all small businesses, whereas the wholesale and retail trade and repair sector accounts for 9% of SMBs. Only 1% is in the mining sector.
Accounting for 99.3% of all businesses, small companies employ the majority of the UK workforce (48%). At the same time, UK SMBs note a 36.3% turnover.
Small businesses are the leading force of the Australian economy. Nearly all businesses are considered to be small or medium-sized companies. As seen in the recent small business statistics, Australia has 62% are non-employing and 98% are employing less than 20 people.
Retail and business services rank second with 11% each. The health, beauty, and fitness services industry ranks third with 9%, followed by residential and commercial services accounting for 7% of small businesses.
More than half of small business owners struggle with finding the right employee. On top of it, 35% of the respondents noted they find it harder to find employees now than five years ago, while 24% of them said it's harder than it was ten years ago.
(Small Biz Trends)
Small businesses face challenges when it comes to finances. However, small business employment statistics show that 37% of surveyed business owners offer higher salaries to make their businesses more appealing to candidates. The lucrative salaries along with other benefits like considerate vacation policies and providing opportunities to advance give SMBs a clear advantage over big companies.
The majority of business owners are dropouts or never went to college. Only 17% of small business owners have a BA. Moreover, 30% graduated from high school but didn’t go to college, while 31% have an associate degree.
Small business owners work harder but don’t make as much as the traditional CEOs. The average small business income for 90% of them is $69,73 a year. For comparison, the average salary of a traditional CEO is $155,000.
17% did so because they were dissatisfied with corporate USA, closely followed by 16% who wanted to follow their passion. Surprisingly, 12% became small business owners because the opportunity presented itself.
While being an owner of a small business offers great flexibility, research shows that 81% of them are working nights with 45% doing so frequently. As small business statistics show, 89% said they work weekends with 57% doing so frequently.
While small business owners work harder than the average business owner and are paid less than traditional CEOs, they don’t regret diving into their venture.
In 2010, the number of new business applications was 2.46 million. In 2020, 4.41 million applications were submitted. This notes a 78.9% growth over the decade. Comparing 2019 and 2020, we can note a 26.9% YoY increase which is also the biggest increase of the past decade.
Only a few years ago, working from home seemed like an impossible dream. But, with the advancements in technology, operating a business from the comfort of your home became perfectly manageable. According to home-based business statistics, 50% of small businesses are home-based, including 60.1% of firms without paid employees.
The percentage of small businesses that fail varies by year. The SBA small business failure statistics indicate that only 30% of newly founded businesses are likely to fail within the first two years. Additionally, 50% of small businesses are bound to survive five or more years, and the small business success rate of those that would endure throughout the first ten years is 66%. Only 25% make it to 15 or more years. The success of a small business depends on the right planning, flexibility, and funding. percentage of small businesses that fail
Gen-Xers account for the largest portion of small businesses and Boomers follow with 41%. Millennials come in third, accounting for 13% of small businesses. Only 1% of small business leaders are Gen-Zers.
Small business owners statistics show that men dominate the scene. Only 31% of small business owners identify as women, while the rest are undefined.
The number of businesses owned by women continues to grow and the gender gap in the US is closing. As of 2020, men own 54.98% of American businesses which is a significant drop from 2018 when they accounted for 60% of business owners.
Women are more likely to have a sole proprietorship than running a business with employees. In fact, studies show that the number of female founders is less represented in bigger companies. Only 32.59% of businesses with four or more employees are led by a woman.
Small business stats underline the progress of women-owned business creation which took a fast turn during the past two years. According to small business owner demographics, the average number of new businesses owned by women between the years 2002 and 2007 was 714. During the recession and recovery period between 2007 and 2012, this number was 1,143. In the post-recession period, the number of newly founded women-led businesses came to 952.
According to the small business revenue statistics, firms led by women that make over $1 million in revenue jumped by 46% over the last decade. This would be quite an impressive number, but these businesses make only 1.7% of all women-led companies. These businesses generated $135 billion in revenue, which makes for 8% of total small business revenue for all women-owned firms.
Demographics of small business owners show that half of all female business owners (48%) are between the 45-65 age range. Female business owners aged 25-44 make for 31% of this group.
(LA Business Journal)
Latinas own 17% of all women-led businesses. This number has grown by 10% annually between 2007 and 2018, while the annual growth rate for the past year is 7%. These firms generated $51,400 in revenue.
Firms owned by women of color grew by 163% in the last decade. Currently, they account for 50% of women-owned businesses. The main reason for this surge was the prolonged recession-recovery period which enticed women of color to turn to entrepreneurship to earn enough money to live on.
The State of a Small Business survey discovered a dramatic increase in the number of small businesses owned by minority ethnic groups. For comparison, in 2015 only 15% of all business owners were part of a minority ethnic group. Small business growth statistics show that the number of African American owners jumped dramatically by over 400% in the period between 2017 and 2018.
The latest reports show that veterans own 2.52 million businesses. Of them, 42,485 firms employed more than 5 million people in 2018 while 2.08 million are self-employed businesses. California, Texas, and Florida are the states with the most veteran-owned companies.
Immigrant entrepreneurs form a quarter of small businesses in the US. California, New York, and New Jersey have the largest concentration of immigrants who pursue the American dream. If you ask yourself “what percentage of jobs do these small businesses create?”, you should know that researchers have noted that immigrant-owned businesses generate fewer jobs that are also low-paying.
50 of 91 startups valued at over $1 billion had at least one immigrant founder. Many of these companies have substantially increased the number of employees over the past two years. The leader among the immigrant-founded unicorn startups is Uber with 9,382 employees in the US and 3 million active drivers. Other examples include SpaceX with 7,000 employees, WeWork with 6,000, and Mu Sigma with 3,500 employees.
The average SBA loan was $417,314, and the average SBA microloan was $13,000. The average SBA loan amount from large national banks was $59,000 and $165,000 from small banks. Generally speaking, small banks lent more money through SBA loan programs than large national banks.
2018 has been a good year for small businesses in search of capital. With 26.9% approvals of small business loans, this trend reached the highest point post-recession.
This is just one side of the story, confirmed by the Wells Fargo Small Business Index study. On the other hand is the Kauffman Firm Survey, which found out that the average amount of small business starting capital is $80,000 a year. Still, 12% of employer firms and one-third of nonemployer firms use no startup capital whatsoever.
Only 48% of small businesses have had their financing needs met. As per small business statistics, 20% of them were qualified for all the financing they applied for. The other 28%, on the other hand, already had sufficient capital and didn’t apply for financing.
(Fed Small Business)
A whopping 70% of small businesses have an unpaid debt. Most of them have less than $100,000 in debt, whereas 21% have debt of $25,000-$100,000, and 17% have $1-$25,000 in debt.
(Fed Small Business)
The global pandemic affected many businesses. Once the lockdown measure came into effect, over 140,000 businesses closed temporarily. By fall, 60% of them closed permanently, translating into approximately 98,000 businesses that were destroyed.
(Yelp Economic Average)
As per small business statistics, COVID had a huge financial impact on businesses globally. 11% of small business owners consider that the financial damage caused by the pandemic will range between $100,000 and $250,000. The majority (31%), however, estimate the cost to be $10,000-$50,000, and only 3% said their business wouldn’t be impacted.
As the coronavirus and the consequent lockdown hit, small businesses were forced to make cut-offs. 7% of SMBs laid off their entire personnel and only 29% of small businesses were able to retain the entire workforce.
The coronavirus outbreak caused a lot of economic uncertainty. This resulted in an increased number of layoffs. According to small business stats, 75% of owners laid off at least one employee. More than 25% laid off 5 employees and 14% dismissed over 11 employees. Research showed that 37% of small businesses with 11-25 employees let go more than a fifth of their personnel.
66% of businesses report big or huge sales decline. Data from recent research shows that 11% experienced a slight decline in sales. Only 9% reported slight or big sales increase, whereas 14% of small business owners said they have experienced little or no impact.
In May 2020, a survey showed that 43% of SMBs planned to expand their business through digital technology. What is more, 30% have already adapted and added options to deliver products and services.
(Global News Wire)
The majority of small business leaders worry about the after-effects the pandemic will have on their business. Small business statistics indicate that 55% of owners believe it will take 6-12 months for the business climate to return to normal. Another 6% are more pessimistic and think things will never go back to normal.
(US Chamber of Commerce)
Many of SMBs either limited operation or closed temporarily. 35% adapted by starting to work remotely. Pre-COVID, 44% of small businesses allowed some form of remote working. Now, 65% of SMBs think working from home will continue even after the coronavirus passes. 11% opted for a remote working system but only temporarily and plan to get back on site once everything is over.
Having a website is of utmost importance for any business, regardless of its size. A website comes with a set of benefits like increased visibility, adds credibility, and ensures a better customer experience. With the vast majority of customers going online to check the business before making a purchase, you simply cannot afford to ignore the need for an optimized website. Plus, with the sheer number of website builders and small business SEO experts that can help you launch your site and have it optimized for search engines, there's no reason to postpone this important task.
Despite the fact that having a website benefits small businesses, small business website statistics show that one-third of them still don’t have a website. They point out that cost, irrelevance to industry, and social media are the main reasons for not having a website.
(Small Biz Trends)
89% of small business owners believe that using SEO also helps. The combination of these two tactics is indeed the most important element of a successful digital marketing strategy. Build a website that uses the right keywords to target a relevant audience, produce high-quality content, and provide a dynamic user experience and you’ll see the number of leads increase drastically.
Small business marketing budget statistics emphasize that the limited resources the companies have are the reason why they invest up to $10,000 in digital marketing yearly. Additionally, the most common resource they use is an in-house team. 43% of small businesses use a team of in-house employees to focus on digital marketing, while 39% of small firms use marketing software. The rest outsource to digital marketing companies.
Small businesses leverage digital marketing channels despite their limited budgets. Almost three in four small businesses have already invested in social media. Other top digital marketing channels include a website (73%), email marketing (57%), SEO (49%), video (34%), and content marketing (32%).
SMBs are mostly using digital technology to provide information to customers. 80% of small business owners utilize at least one platform to advertise and show their products/services, 79% to communicate with suppliers and customers, and 75% for sales.
(US Chamber of Commerce)
Ease of use is the main factor 69% of small business leaders consider when implementing new technologies. Choosing a trustworthy vendor (63%), the price (61%), simplicity of maintenance (61%), as well as the speed and ease of setup (61%) are also among the top deciding factors when evaluating new technology.
CRM software has gained traction among small businesses, followed by financial software (31%), and hardware (28%). 45% of small business leaders already use a CRM system with the majority of them (62%) using it for less than two years.
Even though small businesses are more susceptible to data loss—usually due to lack of resources—nearly half of SMBs aren’t prepared for a potential loss of data. Therefore, small business owners don’t invest in robust backup and often find themselves in need of hiring data recovery companies.
Around 20% of small businesses in the US and UK don’t use endpoint security protection. Furthermore, a third of those that do use endpoint security mechanisms rely solely on free solutions.
Small business data breach statistics show that cybercriminals mainly launch cyberattacks or carry out data breaches for financial gain and convenience. Other motivations include espionage (8%), fun (3%), and grudges (3%).
Nearly half of small business leaders are struggling to secure their data. The next biggest challenge, small business statistics highlight, is to prevent data loss (42%), increase employee security awareness (41%), grow security attract complexities (35%), and threat visibility (28%).
60% of small business leaders think data breach isn’t likely to happen to them. Yet, cybersecurity stats show that 43% of data breach attacks involve small businesses.
Generally speaking, small businesses are considered those that have less than 500 employees. The average small business employs 10 people. In the US, 98.2% of small businesses employ less than 100 people.
The most common type of small business in the US is in the service and goods-producing sector. Convenience stores, bakeries, hairdressers, restaurants, and small grocery stores are the most common small businesses. Professionals like accountants, programmers, lawyers, and doctors also tend to operate as small businesses.
Statistics show that 40% of small businesses are profitable. Another 30% equalize, whereas 30% start losing money at some point.
The success rate of small businesses hasn’t changed much over the past two decades. The small business failure rate for the first two years is 30% and 50% don’t go beyond their fifth year. Small business statistics show that 66% of small businesses successfully go through the first ten years, whereas only 25% of them succeed for 15 or more years.
The number of small businesses in the US is 31.7 million as of 2020. This marks a 3.15% YoY growth from 2019 and a 7.09% growth in the 2017-2020 period.
Nearly 99.9% of all US businesses are small businesses. They employ 60.6 million people which translates into 47% of the total US workforce.
According to recent data from SBA, each year there are 600 million small businesses. Consequently, 1.6 million new jobs are created.
Small business statistics indicate that according to the average profit margin, the most profitable venture is accounting, tax preparation, bookkeeping, and financial planning (18.4%). Real estate leasing (17.9%), legal services (17.4%), outpatient clinics (15.9%), and property managers and appraisers (14.9%) are also among the top five small businesses with the highest success rate.