Transforming your vision into a successful small business is empowering yet challenging. If you are a small business owner – or plan to become one – you should familiarize yourself with the most recent trends. Check out these small business stats and 2019 trends.
Sandra’s Top 7 Small Business Statistics
Immigrants have founded 55% of the unicorn startups in the U.S.
There are 30.2 million small businesses in the U.S. and minorities own 45% of small businesses in the U.S.
Women of color own 47% of all women-owned businesses.
For every dollar spent at a small business in the U.S., approximately 67 cents stays in the local community.
12.3 million is the number of women-owned businesses in the U.S.
61% of small businesses invest in social media marketing.
Need help managing your social media marketing or any aspects of your business marketing? Encounter Marketing and Public Relations can help you.
Small Business Growth & Survival Statistics
1. Each month an average of 543,000 new businesses are started.
This number comes to over 6.5 million per year. Even though only a small amount of these companies manage to survive in the long term, there is competition out there.
Source: Yahoo
2. In the US, there are 30.2 million small businesses.
99.9% of US businesses are small businesses. Small businesses employ more than 47.5% of the private workforce in the US and accounted for 1.9 million new jobs in 2017. Small businesses are an economic engine and an important part of the economic landscape.
Source: Sba.gov
3. Microbu sinesses account for 75.3% of private-sector employers.
Businesses with less than ten employees are the most common.
Source: Blue Corona
4. What is the success rate of small businesses? 50% of them survive five years or more.
The majority of new businesses fail during the first year, the Small Business Association has stated 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 66% would endure throughout the first ten years. Only 25% make it to 15 or more years. The success of a small business depends on the right planning, flexibility, and funding.
Source: Sba.gov
5. 1 in 12 businesses closes every year.
Every year 1 in 12 businesses closes and only 4 out of 100 businesses survive past the 10-year mark. According to a US Bank study, 82% of companies fail because of cash flow problems. This emphasizes the need to regularly analyze cash flow statements to make sure you’re on top of it.
Source: Bls.gov
6. 50% of all US businesses are operated from home.
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 is now very common. According to the SBA statistics, 50% of small businesses are home-based, including 60.1% of firms without paid employees. The most common type of these businesses is sole proprietorship.
Source: Sba.gov
7. 19% of small business owners work over 60 hours a week.
Being the big boss of a small firm isn’t easy. Small business owners work harder than the average worker. 81% of the respondents in the study conducted by Fundera said they work nights and 89% work weekends. What is more, 70% said they work more than 40 hours a week with 19% working over 60 hours.
Source: Fundera
8. 86.3% of small business owners take a salary of less than $100,000.
The new business statistics from Fundera’s study showed that small business owners work harder but don’t make as much as the traditional CEOs. 86.3% of them take less than $100,000 a year. To compare, the average salary of a traditional CEO is $163,000. More surprisingly, the study revealed that 30.07% of the small business owners don’t even take a salary.
Source: Fundera
9. Popular industries for startups in 2018 included healthcare, e-commerce, technology, marijuana, and maintenance.
Identifying industries that are positioned to grow will give you an advantage when launching a new business. The Fundera survey uncovered the most lucrative industries that are likely to be around in a decade from now. Technology, health, and energy made the top of the list. Real estate, retail, and hospitality are also among the industries that are set to have the most substantial growth in jobs in the future.
Source: Fundera
Small Business Loan Statistics & Financing
10. The average amount for loans backed by SBA was $107,000 in 2018.
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.
Source: Value Penguin
11. Big banks approved around 26.9% of small business loans.
Small business lending statistics show that with 26.9% approvals of small business loans, this trend reached the highest point post-recession in 2018.
Source: Biz2Credit
12. The average amount of startup capital required by a small business owner is $10,000.
This was confirmed by the Wells Fargo Small Business Index study. The Kauffman Firm Survey, 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.
Source: Sba.gov
13. Still, most home-based franchises can be started with $1,000-$5,000.
A third of small businesses are founded with up to $5,000 of startup capital. These businesses are often home-based franchises. According to the Small Business Administration, another type of business that doesn’t require large investments are micro-businesses like home-based sole proprietorships. These require low upfront investments and can be started with as little as $1,000- $3,000 of capital.
Source: Sba.gov
Women-Owned Small Business Statistics
14. 12.3 million is the number of women-owned businesses in the US.
Women are owning their entrepreneurial spirit more than ever. The number of women-owned businesses has increased 31 times from 1972 to 2018. In 1972, only 4.6% of all firms (402,000) were owned by women. Today, this number is 12.3 million, which is 40% of all firms. These businesses employ 8% of the private sector labor force, contributing 4.3% of total revenues.
Source: WBENC
15. In 2017/2018, there was 1,821 new women-owned business per day.
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.
Source: American Express
16. 1.7 of woman-owned businesses generate $1.2 trillion in revenue.
Women’s revenue contribution has been growing steadily over the years. In 2018, 207,900 of women-led businesses (1.7%) generated more than $1 million. This is a 46% increase over the past eleven years. The total sum adds $1.2 trillion (69%) to the total revenue made by women-led businesses.
Source: WBENC
17. 88% of women-owned businesses generate less than $100,000 in revenue.
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 revenues, which makes for 8% of total revenues for all women-owned firms.
Source: WBENC
18. There are 2,142,800 Latina-owned businesses.
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 revenues.
Source: American Express
19. Women of color own 47% of all women-owned businesses.
Based on small business owner statistics, firms owned by women of color grew by 163% in the last decade. According to the American Express report, 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. As of 2018, women of color make for 47% of women-owned businesses, generate over $386 billion in revenues, and employ 2,230,600 people.
Source: American Express
20. Nearly half of the female business owners are between 45 and 65 years old.
It seems that the aging female bosses work longer. Almost 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.
Source: American Express
Minority-Owned Small Business Stats
21. Hispanics, Asians, and Native Americans represent 26% of all business owners.
Hispanics are the second largest group of minority small business owners after African American. They make for 14% of the business owners surveyed. Asians and Native Americans represent 8% and 4% of the business owners, respectively.
Source: Guidant Financial
22. Minorities own 45% of small businesses.
The State of a Small Business survey discovered a dramatic increase in the number of small businesses owned by minority ethnic groups. 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.
Source: Guidant Financial
23. Veterans own 9.3% of U.S. firms.
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 most veteran-owned companies.
Source: Small Business
24. Immigrants make up 25% of small business owners.
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.
Source: Forbes
25. Immigrants have founded 55% of the unicorn startups in the US.
50 of 91 startups valued 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. Another example includes WeWork with 6,000 employees.
Source: NFAP
Marketing & Small Business Statistics
26. 70-80% of people research a small business before visiting or making a purchase from them.
Having a website is crucial for any business, regardless of its size. A website comes with a set of benefits like increased visibility, adds credibility, and ensures better customer experience. With the vast majority of customers going online to check the business prior to making a purchase, you simply cannot afford to ignore the need for a website.
Source: Blue Corona
27. Did you know how many small businesses have a website? Stats show that 64% of them do.
Despite the fact that having a website benefits small businesses, 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.
Source: Clutch
28. 61% of small businesses invest in social media marketing.
Small businesses leverage digital marketing channels despite their limited budgets. Social media is the second most-used digital marketing channel with 61%, followed by email marketing with 39%.
Source: Clutch
29. Nearly 50% of small businesses spend $10,000 or less on digital marketing each year.
Small businesses and startup statistics emphasize that the limited resources the companies have are the reason why they invest up to $10,000 in digital marketing on a yearly basis. 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.
Source: Clutch
30. The majority of small businesses do not invest in content marketing.
Content marketing is the most underestimated digital marketing channel. 80% of small businesses don’t use content marketing. This means that one in four businesses misses the opportunity to leverage the most cost-effective channel for building brand loyalty and spiking the ranks in SERPs.
Source: Clutch
31. 92% of small business owners think that having a website is the most effective digital marketing strategy.
89% of small business owners believe that using SEO also helps. The small business growth statistics for 2019 prove that 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.
Source: Iron Paper
32. AR and VR are the least common forms of small business digital marketing.
AR and VR are forefront technologies that help in bringing the product closer to the consumers, giving an accurate impression. Despite the benefits that AR and VR bring, only 10% of small businesses engage in this type of digital marketing.
Source: Clutch
General US Small Business Statistics
33. It takes 6 days to start a business in the US.
It turns out that you can have your business up and running in up to six days. This is significantly shorter compared to many other countries worldwide. Starting a business takes 38 days in China, 30 days in India, and 13 days in UK and Ireland.
Source: Dynadot
34. 56% of small businesses think finding great talent is their biggest challenge.
More than half of small business owners struggle with finding the right employee. 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.
Source: Indeed
35. 37% of SMBs offer higher salaries to win employees over.
Small businesses face challenges when it comes to finances. However, small business statistics show that 37% of the 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.
Source: Indeed
36. The most common reason why small business owners have gone into business for themselves is because they were ready to be their own boss.
The biggest motivation for 26% of the surveyed business owners was the fact that they would be their own boss. For 23% of the respondents going into business for themselves meant they would pursue their passion and build something from scratch.
Source: Guidant Financial
37. In 2018, there was a 34% increase in health, beauty, and fitness industries.
2018 witnessed a boom of wellness-conscious consumers, which explains why health, beauty, and fitness industries saw a substantial growth. The food business and restaurants increased by 14%, solidifying the place among the top small business industries.
Source: Guidant Financial
38. 73% of small business owners are male.
Small business owner demographics show that men dominate the scene accounting for 70% of new businesses and women start 30% of businesses.
Source: Guidant Financial
39. Most small business owners don’t have a college degree.
The majority of business owners are dropouts or never went to college. In fact, only 26% of small business owners have a BA.
Source: CNBC