It is estimated that there are approximately 400 million small businesses globally, with more people joining the market every day.
The rise of technology has also made it much easier for people to start a small business from the comfort of their homes. Small businesses are also responsible for sustaining the cash flow in individual localities, as they are commonly regarded as the pillar of the economy.
However, despite its popularity and advantages to society, it is vital to understand the market demands and trends before starting.
This article will discuss the essential statistics you need to know before starting a small business. These stats will help you, regardless of the business model you choose, to understand how small businesses work, their influences, challenges, and their impact on the economy. So, let’s get right to it.
General Small Business Statistics
- Small Businesses will account for most of the 600 million jobs needed by 2030.
- There are approximately 400 million small businesses in the world.
- There are over 30 million small businesses in the United States of America.
- Small businesses make up 90% of all global enterprises.
- Small businesses make up 99% of the firms in America.
- About 50% of small businesses begin from home.
- Small businesses employ over 50 million people in America.
- 28% of small business owners have cash flow as their primary challenge.
- Only about 60% of small businesses are profitable.
- Over 50% of small businesses fail within their first year.
- Small and medium-sized businesses make up over 90% of the business population.
- 9% of small businesses make more than $1 million.
Small Business Owner Demographic Statistics
- Over 60% of small business owners are men, while about 36% are women-owned.
- 44% of small business owners belong to Gen X, 41% to baby boomers, and 12% to millennials.
- About 19% of small business owners spend 60 hours per week working.
- Over 50% of small business owners have a bachelor’s degree or higher.
- Immigrants own 25% of small businesses in America.
- Women-owned small businesses employ 8% of the private sector workforce.
- Over 85% of small business owners earn less than $100,000 yearly
- Women-owned small businesses make $1.8 trillion in revenue.
- 58% of small businesses started from scratch.
- 45% of small businesses have at least two employees.
- 39% of pandemic small businesses say they’ll never open a physical store.
Small Business Financing Statistics
- Over 60% of small business owners start with a capital of $10,000.
- Approximately 25% of small businesses start without any financing.
- Small businesses have an unmet funding need of approximately $5.2 trillion yearly.
- Micro businesses are the cheapest to start, as they only require a capital of about $3000.
- Over 50% of small businesses rely on owners’ loans and savings.
- 77% of small business funding comes from the owners’ savings.
- In 2021, cash was the most popular financing method.
- Small businesses are less likely to get bank loans than larger firms.
Small Business Industry Statistics
- Food and restaurant businesses are the top small business industry, followed by retail, business services, and health, beauty, and fitness services.
- 12% of small businesses operate in the food and restaurant industry.
- Businesses in the healthcare and social assistance sector have an 85% chance of surviving their first year and a 60% chance in their fifth year.
- The value of the retail, health services, and beauty sectors is predicted in 2026 to be $5.52B, $4.32, and $14.8, respectively.
- 35% of small businesses in the construction industry survive their fifth year.
Small Business Marketing Statistics
- Over 70% of small businesses depend on social media marketing.
- 47% of small businesses utilize marketing as their primary growth strategy.
- 51% of small businesses have websites, while about 24% don’t.
- Over 90% of small business owners believe having a website aids their digital marketing strategy.
- 31% of small business owners view sales as their main marketing goal.
Small Business Technology Statistics
- Around 80% of small businesses utilize digital platforms to communicate with customers.
- 31% of small businesses have CRM and financial software as their top technology priorities.
- Over 25% of investments are made to establish the technical setup of the business.
- 30% of small eCommerce businesses plan to use artificial intelligence to provide customers with recommendations.
- Over 50% of small business owners report that digitization is too expensive.
Small Business Challenges Statistics
- Over 40% of small businesses fail due to a lack of market demand.
- 52% of small businesses stated that they have labor quality challenges.
- Over 40% of cyber-attacks are targeted at small businesses.
- 27% of small businesses do not receive the funding they need.
- 42% of small businesses fail because they do not bring anything beneficial to the market.
- Over 10% of small businesses fail because of a lack of a business model and the right team.
- One in twelve small businesses closes yearly on average.