Intro
Small businesses are the unsung pillars of the economy. Without small businesses, many economies around the world would falter. But it isn’t always easy being a small business. They rely on a lot of guidance and expert tips to ensure success. This article will look at some of the statistics that can help small business owners make vital business decisions.
General Small Business Statistics
- Small businesses represent nine in ten organizations.
- There are approximately 400 million small businesses worldwide.
- Only 11% of surveyed business leaders believe that small businesses will grow in the next few years.
- Small businesses occupy up to 50% of all commercial space.
- The number of US small businesses has doubled since 1982.
- 99.9% of all businesses in the US are small businesses.
- A small business in the US is defined as any small business with fewer than 500 employees.
- A small business in the EU is defined as any enterprise with fewer than 50 employees.
- In Australia, to be considered a small business, you need to have fewer than 15 employees.
- The official process of starting a business in Singapore takes an average of 1,5 days.
Starting a Small Business Statistic
- Two in five small businesses are started at a private residence.
- 70% of small businesses started at home will be based on information.
- Seven in ten businesses started are within the ‘service’ industry.
- 58% of small business owners had a starting budget of $25,000.
- 33% of small business owners had a starting budget of less than $5,000.
- A home-based small business typically costs just $2,000 to $5,000 to start.
- 30% of business owners who started a business during the Covid pandemic said they would never open a physical store.
- The number of small businesses that started during the pandemic increased by 24% in the US.
- Younger entrepreneurs are more likely to start a business because they have a passion for the niche.
- Those under 39 are 188% more likely to start a side hustle and work in full/part-time employment than those 40 or over.
Small Businesses Employment Statistics
- Nearly nine in ten small businesses (88%) hire fewer than 20 employees.
- Small businesses employ 50% of the workforce.
- In 2020 Small businesses accounted for 1.6 million new jobs.
- Only 23.3% of home businesses have paid employees.
- 60.1% of all small businesses that have no paid staff are based at home.
- More than half (56%) of small business owners find it challenging to hire good employees.
- Nearly two-thirds of companies outsource recruitment processes to reduce costs while attracting a higher number of potential candidates.
- More than a third (35%) of small business owners believe the employment market is getting harder to discover good employees.
- Small businesses will increase remote work by 13.5% in the next few years.
Small Business Contribution to the Economy
- Formal small enterprises contribute about 40% of the national income in developing countries.
- Two in five small businesses earn less than $100,000 a year.
- Nearly two-thirds (65%) of small business owners felt they didn’t have enough financial capital to start their own business.
- $10,000 is the average amount a small business owner borrowed to start their business.
- The average US small business owner is $64,709 per year.
- 46% of consumers state they’re more likely to shop at a small business than a large, national brand.
Small Business Failures
- One in seven (65 million) small businesses will not meet their financial needs each year.
- 93% of business owners predict that their small business will not last more than 18 months when they start it.
- One in twelve small businesses will close every year.
- More than one in five small businesses (20%) will fail within 12 months.
- Low sales and poor cash flow are the main reasons why small businesses will close.
- 42% of small businesses will fail because there is no or limited demand for their product/service.
- More than a third of small businesses (37%) were unprofitable during the Covid pandemic.
- About 4% of small businesses are expected to close due to the pandemic.
- 60% of small businesses closed during the pandemic, even if it was just for a short time.
- Only 50% of small businesses will survive longer than five years.
- 70% of small businesses will close within ten years of starting.
- 43% of small businesses will struggle to pay operating costs.
- If 86% of businesses lost two months' worth of revenue, they would need to find another financial source or cut costs.
- Two in five (40%) of small businesses have debts of more than $100,000.
Small Business Owner Profiles
- The most popular reason why small business owners start their own business is to become their own boss (29%).
- Only 12% of small businesses are started because the owner sees an oppstartiortunity within the market.
- Nearly 44% of small business owners are between 39 and 54 years-old.
- About 41% of small businesses are owned by people 55 to 75.
- Only about 12% of small businesses are owned by those younger than 38.
- More than half (53.7%) of small business owners have graduated from college with a bachelor’s degree or higher.
- Only 13% of small business owners have a Master’s degree.
- 81% of small business owners admit to working overtime during both the day and night.
- Nearly nine in ten (89%) of small business owners will work on the weekends.
- Seven out of ten business owners will work more than 40 hours per week.
- Nearly every small business owner (92%) does not regret starting their company.
- The most successful business owners tend to be over 55 years old but they will not have employees.
Technology and Small Business Statistics
- Nearly half of all small businesses (45.84%) will use at least one digital platform to share products/services.
- Nearly four in five (79%) use a digital tool like timeline template to plan and communicate with suppliers and customers.
- Four in five small businesses are not utilizing the available technology to make their business easier to operate.
- A third of small businesses will prioritize CRM platforms over other technology.
- When a small business fully utilizes the technology they’ve subscribed to or bought, they will earn twice the revenue per employee and experience 400% the revenue growth as those that don’t.
- Small businesses were the victims of 28% of 2020 data breaches.
- More small entrepreneurs will build an eCommerce site, as 65% of the US population is expected to go shopping online in 2023 while web hosting packages for Magento and other eCom platforms are cheaper than ever.
Final Word
Small businesses are an important contributor to the world’s economy. They employ more people and are important to the national wealth. But being a small business owner isn’t easy. They have a high risk of failure and often have to work long and hard hours to make a success of the brands.
