When you look at today’s economy, it’s easy to assume that it’s dominated by large corporations. But much of the marketplace, both physical and online, is taken up by small businesses just like yours.
With small businesses being such significant contributors to the economy, it can be helpful to look at some numbers related to their larger role and what you can expect as the owner of one. That’s why we’ve compiled 30 small business statistics for us to look at below.
Keep reading to start learning from these statistics for small businesses. Then subscribe to Revenue Weekly, our email newsletter, to get even more helpful marketing content delivered straight to your inbox!
General statistics for small businesses
The first type of small business statistics we’ll look at is general small- to medium-sized business (SMB) stats. These stats give you a general picture of the role small businesses occupy in the economy. Read on to learn more!
1. There are 32.5 million small businesses in the United States, making up 99.9% of all U.S. businesses.
While small businesses might not have the same kind of advertising power as massive corporations, they make up very nearly all the companies in the U.S.
2. There are 61.2 million small business employees in the U.S., accounting for 46.2 of all U.S. employees.
Just like the previous statistic, this one indicates just how much influence small businesses have over the marketplace — in this case, over employment.
3. Micro businesses — businesses with four employees or fewer — account for 56% of small businesses in the United States.
This indicates that your company doesn’t necessarily have to be stocked with tons of employees to succeed. Most small businesses get by with very few workers!
4. Millennials and Gen Z-ers are 188% more likely to start up a small business as a side hustle rather than as their primary source of income.
This stat indicates how the small business landscape is changing amongst the younger generations, creating business owners who are less dependent on their small businesses as their sole source of income.
5. 50% of small business owners operate their businesses from home.
It’s not just larger companies that have seen a move toward working from home since 2020 — many small businesses are run entirely out of the owner’s home.
Benefits of small businesses
In this next section, we’ll look at SMB statistics related to the benefits of small businesses. These benefits affect owners, customers, and the market.
6. 43% of small business owners report being very happy in their jobs.
This statistic indicates that running a small business has the potential to be a very fulfilling career path, perhaps leading to more job satisfaction for some people than working under a larger company.
7. 92% of small business owners say they don’t have any regrets about starting their company.
In the same vein as the previous stat, most small business owners indicate that they’re glad they started their small business and don’t regret doing so.
8. 84% of small business owners say that they feel optimistic about their companies going into the future.
Not only do small business owners feel good about starting their companies, but they also feel good about the future of their business. Most small business owners are optimistic of their companies’ future success.
9. 29% of small business owners said they opened their own business so they could be their own boss.
According to the study that provided this statistic, one of the most common motivations for starting a new business is that it lets business owners be their own boss rather than working under someone else.
10. Small businesses create 1.5 million jobs every year, accounting for an overall 64% of new jobs created in the United States.
Small businesses don’t just benefit their owners — they also benefit the job market. They create the most new jobs each year.
11. 47% of American consumers shop at small businesses between two and four times each week.
This statistic indicates a benefit for both consumers and business owners. It shows that consumers continually support small businesses, and that routine shopping also indicates a steady stream of revenue for business owners.
12. 53% of consumers indicate that they feel shopping at small businesses allows them to give back to their communities and make their shopping experience more meaningful.
Consumers view small businesses as an outlet for benefiting the community, feeling that shopping there is more beneficial for everyone than shopping at larger companies.
13. 48% of consumers shop at SMBs to obtain higher-quality products, while 45% shop there for the personalized service.
This stat shows that the primary benefits of SMBs to customers are better products and service. For that reason, be sure your business embodies these traits, or it will be missing the main things that attract customers.
Challenges of small businesses
As beneficial as small businesses are for everyone involved, they still come with challenges. Here are some statistics for small businesses like yours to watch.
14. Over 20% of small businesses fail in the very first year, while almost 50% of startups fail within the first five.
This statistic can seem incredibly discouraging, but it’s necessary to understand the risks. This stat is in no way suggesting that your business will fail — it’s clarifying that driving success for your business will require time and effort. It won’t be as easy as kicking back and waiting for revenue without overcoming sales challenges!
15. An average of 1 in 12 small businesses closes each year.
Not all small businesses will last for a long time. Small businesses can close due to high costs, lack of demand, or owner retirement, amongst other reasons.
The shifting economy plays an integral role in leading small business owners to close up shop, so it’s important that your business stays flexible and current to survive economic change.
16. The biggest reason that new companies fail is due to a lack of market demand, which is responsible for 42% of small business failures.
If the past two SMB statistics seemed discouraging, allow this one to shed some light on the problem. Business failures aren’t unpredictable — they happen for a reason. The main such reason is lack of market demand. So, if you have a product or service that people want, you’re already ahead of the curve.
17. 52% of small business owners have indicated that the biggest problem they face is labor quality.
While lack of market demand is the biggest source of business failures, business owners have indicated that the biggest thing they struggle with is obtaining high-quality workers. That tells us that you should make it a priority to hire skilled and dedicated employees.
18. 73% of small business owners struggle with setting financial goals, while 75% struggle with conducting market research.
This statistic demonstrates the importance of planning. Make sure you lay out some clear goals for your budget and your company, and be sure to research the market where you plan to sell.
19. 66% of small businesses struggle with various financial challenges, with 43% naming the largest such challenge as operating expenses.
With so many businesses indicating that operating expenses are their biggest financial issue, it’s important to prioritize your expenses in your budget and try to cut down on costs.
20. 82% of small businesses struggle with cash flow.
Cash flow simply refers to the money that enters and exits your business. But it’s not just about how much — it’s also about when. If your revenue predominantly comes in at the end of the month, but your expenses mostly occur at the beginning, you’ll want to budget accordingly.
21. 19% of small business owners spend over 60 hours working each week.
This statistic shows just how much work it takes to run a small business. With some business owners having to spend 60 hours a week at their jobs — twice as much as employees of larger businesses — it’s no small commitment.
22. 43% of all cyberattacks are targeted at small businesses.
You’ve no doubt heard of cyberattacks against businesses, but you might assume they all target large companies. But that’s not the case — many of them go after small businesses, which hackers often view as easier prey. For that reason, be sure to invest in web security.
Small businesses and digital marketing
We’ve looked at general SMB stats, as well as the benefits and challenges of running a small business. To wrap things up, let’s look at the role marketing plays for small businesses. Here are some marketing-based statistics for small businesses!
23. 47% of all small businesses name marketing as their primary strategy for growth.
Nearly half of all businesses recognize that marketing can help them increase the size of their company, and you should too! Marketing drives sales, which brings revenue, which in turn stimulates growth.
24. 84% of small businesses use at least one type of digital platform as a way to share their products.
This statistic shows the value of digital advertising. With people spending so much time online in today’s world, it’s no surprise that companies see the value of promoting their products there.
25. 31% of small business owners say that their primary marketing goal is to drive sales.
There are different goals you can set for your marketing. Sometimes marketers aim to spread brand awareness or embed their business within the community. But for small businesses, one of the main goals is also the simplest — to use marketing to directly encourage prospects to make purchases.
26. 36% of small businesses don’t have their own website.
In today’s digital world, any business without a website will struggle to generate leads online — and yet, 36% of small businesses still don’t have their own site. If you don’t already have a website for your small business, you’ll want to create one to help boost growth.
27. 64% of small businesses harness social media to promote their companies.
This statistic points out a specific marketing strategy that works well for most small businesses — social media marketing. This strategy involves promoting your business on social media platforms, often using both organic and paid methods.
28. 73% of small business marketers believe their social media marketing efforts have been effective for their company.
Staying on the theme of social media marketing, this statistic indicates that a high majority of small businesses see success from their social efforts. This stat makes it even clearer that social media is a good place for you to market your business.
29. 70–80% of consumers will research a small business online before contacting it in any way.
This statistic points to the importance of developing a strong online presence for your business. That means building a website, trying out different online advertising strategies, and curating positive reviews for your company online.
30. Two-thirds of all retail sales happen online.
This final entry on our list of statistics for small businesses shows the value of ecommerce. Particularly if you work in retail, you can miss out on sales if you don’t sell your products on the Internet. An online store can help you boost sales for your small business.
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WebFX can help your small business drive revenue through marketing
Want some help applying what you’ve learned from these SMB stats to beef up your marketing campaigns? Let WebFX help you! With over 1020 client testimonials speaking to the quality of our service, you can rest assured we know how to drive revenue for your small business.
With our digital marketing services, you’ll get help optimizing everything from your website to your social media efforts. To get started with us, just call 888-601-5359 or contact us online today!
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