Small Business Statistics at a Glance in 2019
- Small businesses account for 52.6% of all retail sales, 46.8% of all wholesale sales, and 24.8% of all manufacturing sales
- 99% of businesses are small. 70% of businesses gross under 1 million a year.
- Nearly 53% of all retail is led by small businesses
- small businesses as a whole produce a GDP of around $6 trillion.
- Small businesses play a vital role in our economy , employing roughly 130 million U.S. workers and exporting 97% of all U.S. goods..
- Average small business turnover is $3.6 million.
- IDC says that there are 8 million business with under 100 employees.
- 99.7% of employers and supply the majority of new jobs annually.
- Small businesses with websites make an average of just over $5 million in annual revenue..
Small businesses are an integral part of our economy. Big businesses and companies might lead
Here, we will breakdown 8 aspects of small businesses that will show you the full force of small business.
1.There Are 30.2 Million Small Businesses in The U.S.
Small businesses are not as small as you think. How do you know you qualify as a small business?
Qualifying as a small business depends on two things: employee size and annual revenue. A small business could be a business with a max of 250 employees or a max of 1500 employees. A small business typically has smaller revenues than larger businesses.
However, these standards are not the same for every industry. The Small Business Administration or SBA has a set of size standards. These standards determine the acceptable sizes of businesses by industry.
Take a look at these standards. See where you land as a business owner.
As of 2018, small businesses make up 99.9% of all U.S. firms. They also account for:
- 7% of firms with paid employees.
- 7% of exporting firms
- 6% of known export value
- 48% of private sector employment
- 2% of private sector payroll
The SBE reports that 50% of businesses are home-based, 2.9% are franchises, and 19.3% are family owned.
In 2016, The Annual Survey Of Entrepreneurs Reported:
- 8% of private sector payrolls in 2016 were employed by
smallbusiness with less than 500 workers.
- Firms with less than 100 workers employed 33.4 % of the private sector payrolls.
- Small businesses with less than 20 workers were responsible for 16.8% of private sector payrolls.
Small businesses create the bulk of job creation. The 2018 Small Business Profile of the United States reported:
- In 2015, small businesses employed 58.9 million people, nearly half the private workforce.
- Private sector employment saw a 1.8% improvement by February 2018.
In 2012, the SBA Office of Advocacy saw, small businesses are vital to the growth of the United States GDP. Small businesses accounted for 46% of the private nonfarm GDP in 2008.
Additionally, small businesses are becoming part of the U.S.’s international trade. In 2014, 304, 466 companies were exporting goods. Of that number, 97.7 % of them were small traders. All in all, small businesses generated 33% of the U.S. total exports.
That being said, small businesses are in peak condition.
2. 60% of Small Business Owners Say They Will See Growth in 2019
A 2018 Guidant article broke down the most popular states for small businesses.
- California holds 64% of profitable businesses.
- Florida has 72% of profitable businesses.
- Texas has 65% of profitable businesses.
- New York has 70% of profitable businesses.
- Illinois has 70% of profitable businesses.
These are the prime location for starting small businesses. Apart from high rates of profitability, they also boast high business owner satisfaction.
The SBA Reports That Small Business Survival Rates Are Relatively High
79.9% of firms established in 2014 survived to 2015. Between 2004 and 2014, an average of 78.5% of small businesses survived for one year. About a third of small businesses survive 10 or more years.
Guidant and Lending Club found that 2018 had a distinct increase in wellness, beauty and fitness industries.
- Business services, the largest segment of small businesses, had an 11% increase.
- Food and Restaurant also saw an 11% increase.
- Health, beauty
andfitness saw a 10% increase.
- General retail and home services saw a 7% increase and
6% increase respectively.
Much of this growth is on account of society’s growing awareness of
So, if you are wondering where or how to start a new business, start with one of these industries.
Espresso Digital predicts that 58% of small businesses without a website plan to build on in 2019. According to Statista, in 2018, 52.2% of online traffic was conducted through mobile phones. As such, 94% of small businesses’ websites will be mobile friendly in 2019.
Small businesses are likely to focus on online digital marketing.
- Engage2Connect says 62% of small businesses invest 4% or more of their revenue on marketing.
- 37% of small businesses will increase their digital marketing spend in the next year.
- Most importantly, 69% of small businesses with websites show annual sales of $1,000,000- $2,490,000.
In Order to Attract New Customers, Majority of Small Businesses Have Been Using Six Methods
- Word of Mouth accounts for 28% of marketing improvement.
- 20% of firms used SEO or search engine optimization.
- 15% used Online Local Directories
- 10% used email marketing.
- 4% used mobile marketing.
- 4% used PPC marketing.
You can DIY your own website with companies like Wix or Squarespace. There are also good website design agencies that can do the job for you.
This is so important whether you are a new business owner or if you are a seasoned one. Either way, having an online presence is important to growing a small business.
4. Small Business Financing Methods Are More Varied
Just as small businesses are diverse, their financing methods differ as well. Typically, startups rely heavily on
In 2012, the SBA shared this breakdown of small business financing.
In 2018 and 2019, there is a shift in financing with more under-utilized methods. Guidant reported that the most popular financing methods are:
- 32% of businesses finance with cash.
- 13% finance with 401(k) business financing.
- 12% finance through friends and family.
- 10% finance with a line of credit.
- 9% finance with an unsecured loan.
- 5% use an SBA loan.
Have You Heard Of Crowdfunding As A New Financing Method?
Crowdfunding is still behind financing with cash and Rollovers for Business
Small businesses choose their financing methods depending on a variety of reasons. They might need financing for a
As such, if you are on the road to starting your own business, you have several methods of financing. Like we mentioned, just be sure to pick a method appropriate for your means.
5. 50% of All Small Businesses Are Home-Based
In 2017, the SBA saw that 70% of home-based small businesses are part of the information industry. 68.2% of
If you are wondering how to start a new business from home, start with marketing, accounting, and bookkeeping roles. E-commerce is also proving profitable. Statista reported that online shopping is one of the most popular online activities. It is projected to grow to 4.88 trillion U.S. dollars in 2021.
You could very well be a part of this unprecedented growth all from the comfort of your home.
6. Minority-Owned Small Businesses Are Growing 10x Faster than Most Small Businesses
- 12% were Hispanic owned.
- 10% were Black or African-American owned.
- 7% were Asian-owned.
- 1% were owned by Native American and Alaskan natives.
- 0.2% were owned by Native Hawaiians and other Pacific Islanders.
Hispanic-owned businesses saw a 46% increase. African-American owned businesses saw a 34% increase. Asian-owned businesses saw a 24% increase.
Transition in Industry Focus
They have also seen a transition in industry focus. Minority businesses were typically involved in small-scale, service businesses, like beauty salons. Now, you can see more
These numbers continue to grow as American demographics change. SmallBizLabs actually projects
With that said, if you are part of a minority, you can have some confidence in your business prospects. You are in good company.
7.Women-Owned Businesses Represent 39% of All Small Businesses
2018 saw the rise of women. Similarly, going into 2019, women-owned small businesses have also seen significant growth.
The 2012 Survey of Business Owners observed that women were majority owners for 9.9 million businesses. These businesses accounted for $1.4 trillion in annual revenues and 8.4 million employees.
However, these numbers saw steady growth for the next five years.
Have a Look at the Statistics?
According to the National Association of Women Business Owners, 11.6 million small businesses are owned by women. Women-owned businesses employ almost 9 million people. In 2017, they generated $1.7 trillion in revenue.
Women-owned businesses grew 114% between 1997 and 2017. The need for gender equality in the workplace still persists. However, women-owned businesses have survived longer than male-owned business. According to SmallBizTrends, 13% of women-owned businesses have grown from
Businesses owned by women of color are also showing standout numbers. 5.4 million small businesses are owned primarily or in part by women. These businesses generate $361 billion in annual revenues.
American Express broke down the firms owned by women of color by racial or ethnic group.
- African-American women account for 19% of women-owned businesses.
- Asian-American women own 8.6% of women-owned businesses.
- Latina or Hispanic women own 17.2% of women-owned businesses.
- Native American women and Alaskan Natives own 1.4% of all women-owned businesses.
- Native Hawaiian and Pacific Islander women own 0.3% of women-owned businesses.
We mentioned that
Around Half of Women-Owned Small Businesses Are Centered in Three Industries.
- 23% of
women ownedbusinesses are personal services, such as hair and nail salons and pet care.
- 15% of these firms are involved in health and social assistance, like
day careand home health.
- 12% of women-owned businesses are related to professional, scientific and technical services. These firms include lawyers,
accoutants, PR firms, and management consultants.
Inc. 5000 reported the top ten cities that boasted fast-growing, women-owned companies.
- New York City
- Los Angeles
- San Francisco
- San Diego
- McLean, Virginia
- Washington, D.C.
Financing for Women-Owned Companies In 2018 Showed Interesting Results
- Only 25% of women seek funding for their business.
- 31% of women who do look for funding are successful.
- 59% of women needed funding to launch projects.
- 46% of women used credit cards for funding.
- 11% of women used equity from investors.
In general, it is harder for female small business owners to gain funding. Even so, it has not stopped them from steady growth. In 2018, women-owned businesses grew from 11.6 million to 12.3 million.
So, ladies, there is definitely room for you in small businesses.
8. Technology Integration Can Improve Small Business Productivity
Small businesses are seeing the benefits of technology. From marketing to day-to-day functions, small businesses are incorporating technology into their organization.
SalesForce found that small business teams spend 23% of their workdays on manual processes. If you sum it up, this is about one day lost a week. Incorporating technology can help with this.
- 73% of businesses were using mobile devices for social media marketing.
- 71% of businesses used mobile tech for email marketing.
- 44% dedicated mobile tech to ads on social platforms.
- 34% used mobile technology for a mobile-optimized website.
- 18% of firms used mobile or tablet-based payment systems.
- 18% of firms used mobile apps to organize daily operations, like meetings,
porjectassignments, scheduling, etc.
Also, customer relation
Small Businesses Is Moving Towards Artificial Intelligence
Another interesting technology trend is small businesses moving towards Artificial Intelligence. Integration is slow-moving for all small businesses, but there are some exceptions.
Salesforce found that small businesses experiencing “fast growth” are two times more like to use AI. There are currently 11% of small businesses using AI. They have found that AI
Technology has transformed and shaped our world. Its integration is vital for small businesses to thrive in the
By now, you have seen that there really is not anything small about small businesses. They are a force all on their own and there is room for even more growth. We hope this motivates you to see the power of having a small business.
We hope this article has been a great help in your research on small businesses. If you have any questions or suggestions, please share them below.
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Lisa Loeb is part of the content team at Vivipins where she develops resources to help customers start and grow their own businesses.