Though it’s difficult to say how many small enterprises there are in the globe right now, estimates put the number at approximately 400 million, with new entrepreneurs joining the ranks on a daily basis. Small companies, often known as “SMEs,” are commonly considered as the economy’s backbone, sustaining the movement of money in and out of particular towns and cities.
It is now much simpler for an ambitious individual to start a small business with very little initial expenditure thanks to the advancement of digital technology. You may open an internet business with almost no money down and start selling your products in a matter of minutes.
Today, we’ll look at some of the most significant small company data you should be aware of.
Key Small Business Statistics – Editor’s Choices
- 600 million jobs will be needed by 2030, and small businesses will account for most of them
- SMEs represent around 90% of businesses and 50% of worldwide employment
- There are around 400 million small businesses worldwide
- Over 99% of America’s firms are small businesses
- The most common reason for launching your own business is to be your own boss
Small Business Statistics: General SME Statistics
1. Small businesses account for 90% of all global companies
According to the World Bank, SME’s play a key role in our economy, accounting for around 90% of enterprises and 50% of employment globally. In developing enterprises, formal SMEs also generate roughly 40% of national income.
Small businesses, according to the World Bank, are less likely than large enterprises to acquire loans, and instead rely on internal finances, cash from family, and personal savings to support their operations. Every year, almost 65 million businesses are estimated to have unmet funding needs.
2. Over 99% of America’s businesses are small businesses
According to JP Morgan Chase, small companies made up over 99 percent of America’s 28.7 million organizations in 2014. Around 88 percent of these businesses had fewer than 20 employees, and 40% had sales of less than $100,000. Based on these figures, the Small Business Administration estimates that there are presently 29.6 million small businesses in the United States.
3. Small businesses accounted for 1.6 million new jobs in 2020
Small firms accounted for 99.9% of all enterprises in the United States in 2020, creating 1.6 million net new jobs over the course of the year. In addition, the number of small enterprises in the United States climbed by 2.1 percent from 2019 to 2020.
4. Around 50% of small businesses start at home
According to the SBA’s data, roughly half of all small businesses are started from home, and the number of home-based firms is growing all the time. More precisely, roughly 60.1 percent of all non-paying businesses, as well as 23.3 percent of employer businesses, are situated at home. The most likely industry for a home-based firm is information (70 percent ).
5. The most popular reason for starting a business is to be your own boss
When asked why they began their own firm, over 29% stated it was because they wanted to be their own boss. Dissatisfaction with the regular employment and a desire to follow a special interest were other common reasons for starting a business. Only around 12% of those polled claimed they started their firm because an opportunity presented itself.
6. The Services industry is most popular for small business owners
According to Guidant research, the most common type of business to start in 2020 will be a “service” firm. In the United States, services firms accounted for about 28 million enterprises, with an average revenue of $9.5 billion. The food and restaurant business, general retail, and the health, beauty, and fitness industries were all popular.
Small Business Statistics: Small Business owners
7. 44% of small business owners are 39 to 54 years old
According to the Guidant Financial Trends Index for 2021, Gen X (39 to 54 years old) owns 44 percent of small enterprises, while baby boomers control 41 percent. Millennial company owners make up around 12% of all SMEs, although the number is expanding.
The majority of small company owners, according to Guidant Financial, are males (66 percent ).
8. Around 53.7% of small business owners have a bachelor’s degree or higher
While having a degree isn’t necessarily required to start a firm, the vast majority of small business entrepreneurs have a bachelor’s degree or above. According to Fundera, 32% of respondents had a bachelor’s degree, 13% had a master’s degree, and 15% had some sort of college education.
9. 56% of small business owners struggle to find employees for their business
More than half of small company owners say it’s difficult to find the proper staff to help them expand. Around 56% of respondents indicated finding the expertise they need is “very tough” or “extremely difficult.”
Furthermore, Indeed’s research indicates that finding the proper small company talent is more difficult than it used to be. Attracting the proper people, according to 35% of respondents, is more challenging than it was five years ago.
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10. Working overtime is common for small business owners
Working from home and being your own boss, according to Fundera’s research, does not always imply extra time off. Around 81 percent of business owners will work over time, which means they will work at all hours of the day and night.
Around 89 percent of small company owners say they work on weekends to keep up with their busy schedules, even if their hours are flexible.
Small Business Statistics: Financing statistics
11. 65% of entrepreneurs in 2019 felt they didn’t have enough cash to start a business
According to Kabbage Inc data released in 2019, over 65 percent of entrepreneurs believe they will not have enough money to start their own firm. A survival rate of roughly 18 months was likewise computed by 93 percent of firm owners. In the Kabbage research, 58 percent of respondents said they started their business with less than $25,000, and a third said they started with less than $5,000.
12. The average amount borrowed to start a business is $10,000
According to the Small Business Administration, most firms seeking finance for their small business will require roughly $10,000 in start-up capital. High-tech companies, on the other hand, may need a lot more — closer to $80,000. Though startup money is available in some situations, the majority of small enterprises are self-funded.
13. Small businesses have an unmet financing need of around $5.2 trillion each year
According to World Bank data, the present level of unmet small company finance requirements is increasing. Around 65 million businesses in developing nations have an annual finance gap of $5.2 trillion. The highest deficit is in East Asia and the Pacific (46 percent), followed by America and Europe.
The Caribbean and Middle East, North Africa, and Latin America have the largest financial disparities, according to the World Bank.
14. The average income for a small business owner is $64,709
While becoming your own boss is the most prevalent motivation for starting a new business, it’s also necessary to make a fair living. According to PayScale, the average median salary for someone who runs and controls a small business is $64,706, with most earning between $30 and 148 thousand dollars.
Payscale points out that a company owner’s income is typically influenced by his or her geographic area. You could not make as much if you live in a high-cost-of-living location.
15. Micro businesses are the cheapest to start
Micro firms with less than 10 workers are frequently the cheapest to establish, with a total investment of roughly $3000. If you run your business from home, your costs will be considerably cheaper. Most modest home-based businesses may get off the ground with as little as $2000 to $5000 in capital.
16. Low sales and cash flow are the number one causes of business failure
Low sales and inadequate cashflow are the leading causes of a firm winding down, according to studies conducted by the office of advocate. Every year, around one out of every twelve enterprises closes. Companies may, however, close for personal reasons.
Small Business Statistics: Business survival and success
17. 92% of small business owners don’t regret starting their company
Despite the fact that establishing a small business needs a lot of dedication and hard work, entrepreneurs say they are glad they took on the task. Around 92 percent of those polled stated they have no regrets about launching their company. Approximately 70% of small company owners work more than 40 hours every week.
18. Only 63% of businesses continued to be profitable during COVID
According to Guidant Financial, the COVID-19 epidemic harmed the majority of small companies. Since the epidemic began, over 41% of businesses have reported a negative shift in company operations, and just 63 percent of businesses will be profitable in 2020.
Around 4% of businesses anticipate to go out of business as a result of the pandemic, while 78 percent feel they will be able to survive. COVID’s most prevalent effect was a loss of income, which affected 23% of businesses.
19. 60% of small businesses closed during to Pandemic
According to Yelp’s Economic Impact Report, the pandemic caused roughly 60% of small companies to close or cease operations. Since the beginning of April 2020, the number of small businesses that have closed has steadily increased.
20. About 50% of small businesses survive more than 5 years
According to SBA studies, over half of small firms will last five years or longer, but only about a third of enterprises will last ten years or longer. This report examines a company’s average performance rate outside of the pandemic’s influence.
21. Only around 11% of people are confident in small business growth
Guidant Financial revealed that just approximately 11% of respondents are highly confident in the capacity of small companies to succeed in America after asking them to rank their confidence in the ability of small businesses to thrive in America. Around 30% of participants said they were “somewhat confident,” while 24% said they were “somewhat unconfident.” Around 15% of respondents expressed extreme skepticism regarding the viability of small firms.
Small Business Statistics: SME Trends
22. 30% of pandemic entrepreneurs say they’ll never open a physical store
According to Salesforce survey data, the number of small companies formed in the United States during the pandemic climbed by 24% between 2020 and 2021. These businesses, on the other hand, operate a little differently from the average small business. According to the poll, 30% of pandemic entrepreneurs had no desire to create a physical location.
Salesforce also discovered that 32.9 percent of those who were furloughed and unable to work during the epidemic launched a small business.
23. Food and restaurant businesses are growing fastest
According to Guidant Financial research, the food and restaurant industry will be the fastest expanding area for small companies in 2020. (12 percent growth). Retail was the second fastest increasing choice, with 11% growth, followed by Business Services (11% growth), and health and beauty services (9% growth).
24. 72% of small business owners feel optimistic about the future
Despite the obstacles posed by the epidemic, according to Salesforce research, roughly 72% of small company owners are positive about the future. Small company owners boosted their online presence by 72 percent in the previous year, and 71 percent indicated they survived the epidemic because they engaged in digital transformation.
Summary – Small Business Statistics
Small enterprises are the backbone of the global economy and a crucial component of what makes the globe so adaptable. As the small company statistics above illustrate, there’s still plenty of room for entrepreneurs to become engaged in small business sales and carve out a niche for themselves. Small enterprises will only continue to expand as time goes on.
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