Are you a small business owner or entrepreneur?
Building a business takes a lot of courage, time, and financial resources. But the payoff can be incredible: earning money doing something you love and serving an audience you care about.
If you're a small business owner or dream of becoming one, these amazing small business statistics will inspire you to keep going on your entrepreneurial journey.
Small Businesses Make Up 90-99% of All Businesses
Only about 10% of companies around the globe are big businesses. The remaining 90% are small- and mid-sized companies, just like yours.
In the United States, that figure is even higher. 99% of US businesses are considered a “small business.”
Small Business Can Create Big Earnings
What do you think of when you hear "small business?" Does it bring to mind a part-time side-hustle or tiny local shop?
The US Small Business Administration defines a "small business" as one that earns an average of $6 million annually (retail and service sector) to $28.5 million (general and heavy construction).
Starting a small business doesn't mean limiting your earning potential. Your business could make millions each year and still fall under the small biz definition.
You Have a Great Chance of Making it Past Your First Year
Have you ever heard the saying that most small businesses don't last past the first few years?
According to the SBA, you have a great chance of surviving your first (terrifying and exciting) year of business and beyond.
From 2004 to 2014, an average of 78.5% of new establishments survived one year.
- About half of all establishments survive five years or longer.
- In the past decade, this ranged from a low of 45.4% for establishments started in 2006, and a high of 51.4% for those started in 2011.
- About one-third of establishments survive 10 years or longer.
Women Own Almost Half of All Small Businesses
Women own, or co-own, approximately half of all small businesses in the US.
In 2012, there were 9.9 million women-owned firms, and 2.5 million firms owned equally by men and women. This means that 12.3 million firms, or 45% of all classifiable firms, were at least 50% women-owned.
California has the Most Women-Owned Businesses
California is the nation's most populous state, so it should come as no surprise that the Golden State is home to the largest number of women-owned businesses, according to a 2018 annual business survey from the US Census Bureau.
California aside, the top ten states with the highest percentage of women-owned businesses include:
- Hawaii
- Virginia
- Colorado
- Florida
- Maryland
- Alaska
- Georgia
- New Mexico
- Nevada
- Oregon
Minority-Owned Businesses are Growing
From 2014 to 2016, the overall number of minority-owned employer businesses rose 11%, compared to a 1% growth in non-minority businesses.
Minority-owned businesses bring in $1.3 trillion in annual receipts, according to the SBA. The average, minority-owned business has $1.2 million in annual sales and employs eight workers.
According to the 2016 Census Bureau’s Annual Survey of Entrepreneurs, there are 1,054,575 minority-owned businesses with employees in the United States. Overall, 20% of all employer businesses were at least 51% owned by minority entrepreneurs, employing 8.7 million workers at a total annual payroll of $280 billion.
36.1% of all Black-owned businesses are owned by women—higher than any other racial group.
Half of Small Businesses Start at Home
Good things start at home. Even some of the biggest corporations, like Apple and Disney, started as home-based businesses.
The SBA found that around 50% of all small companies launch from home.
Home-based businesses are more likely to be solopreneurs or use independent contractors to help them get work done. 60% of small businesses without paid employees are home-based compared to 23.3% of home-based employers.
Information and construction industries are more likely to be home-based than others, and women run most home-based businesses (58.2%).
Being Your Own Boss is the #1 Reason People Start a Business
Why do people want to start their own business?
The majority of respondents (29%) state that being their own boss is the primary reason to start and own a business.
Other reasons for starting a business include being dissatisfied with the standard workplace or wanting to pursue a specific passion. Only a few (12%) of business owners began a company because they were presented with a specific opportunity. Most people had a why in their head and went for it.
The Average Age of a Business Founder is 42
You're never too old to start a business.
The average age of a founder is 42 years old, and founders aged 50 and up are 2x more likely to succeed than founders aged 30 and under.
It appears that experience can work in your favor when you're an entrepreneur. The overall success rate of first-time ventures is 25.3%.
On the other hand, serial entrepreneurs have an above-average success rate of 36.7%, reminding us all that "if you first don’t succeed, try, try again."
Whether you've started a business because you've discovered your passion, want to be your own boss, because you're tired of workplace standards, or because a great opportunity has presented itself, you're one of the millions of small businesses that are employing people and moving the economy forward.
And that's no small feat.
Protect Your Small Business with Aegis Insurance Markets
Speak with one of our small-business specialists to find out how easy and affordable it can be to protect the small business you've worked so hard to build.
At Aegis Insurance Markets, we help small business owners insure against unexpected events that can lead to financial loss and lawsuits. Get a complimentary quote or pick up the phone and call our small business specialists at (800) 579-6369 to talk about the unique risks you face as a home-based or small business owner.