Revealing Small Business Statistics & Facts for 2024

This telling statistic shows how many small businesses in the world are categorized as small, which is the vast majority of them.

Most businesses shut down within the first few years of operation and don’t make it to medium or large size. Also, the revenue of a small business is not very high during the first years. It takes a long time for a small business to grow and move up in scale, which is part of the explanation behind this statistic.

(World Bank)

The United States has a culture where people are encouraged to live the dream by being ambitious and opening a business or side hustle. Therefore, many people try their luck by registering a new business to become rich, and for that reason, the number of small businesses in the US is one of the highest in the world. Therefore, most small businesses are started by regular folk looking to make a living.

(JP Morgan Chase)

Why are small businesses important? They allow local communities to thrive, usually keeping the money in the community itself while creating jobs at the same time. Small businesses cannot hire many people individually because of their nature, but overall, many people work for small companies because so many exist. Moreover, the number of small businesses is predicted to increase in the coming years, which means such companies will hire even more people.

However, the same job progression is typically not available at smaller companies. That’s because there are fewer positions and such businesses have less money to spend on expensive managers or CEOs.

(CDN Office of Advocacy)

This statistic is unsurprising because the internet has made it easy for anyone to start a business at home. You only need an internet connection and a computer to run a business that could generate millions in revenue per year. With the competition growing, the percentage of small businesses that don’t have a website is shocking.

Furthermore, the improvement in delivery services worldwide means business owners can use their garages as storage units. This allows people to sell physical goods without needing a business location, making this one of the most surprising small business facts.

(SBA)

The most common reason people start their own business is to become their own boss. Other reasons include taking advantage of an opportunity and being dissatisfied with their workplace.

Social media has created a culture where it’s desirable to start your own businesses. This encourages more people to consider leaving their job and starting a business.

(Guidant Financial)

This includes companies that cater weddings, restaurants, and fast food stores. So it makes sense that these would make up a large share of small businesses. They are primarily location-based and grow big enough to accommodate local needs.

(Guidant Financial)

Many small businesses are on the verge of going bankrupt, and the only way the owners can make ends meet is to work overtime. Even small companies that are flourishing require a lot of overtime to grow. Eventually, owners can reduce the amount of work necessary to maintain the business. This happens when more employees are hired to fill time-consuming roles. Additionally, small business statistics indicate that 89% of owners work weekends to ensure the business runs smoothly.

(Fundera)

This is a relevant small business demographics fact. Talented employees are hard to find because small businesses might not provide the right working conditions. Larger companies may offer better opportunities for ambitious employees.

Also, many people have been quitting their jobs during the pandemic and looking for better job conditions. For instance, many job-seekers will avoid the job offer if remote work is not offered.

(Indeed)

One of the most interesting facts about small businesses is that most of them are started by first-time business owners. On the other hand, the high portion of first-timers also contributes to an increase in the failure rate. It’s encouraging to know that the average business owner will need to fail multiple times before launching a successful business.

(Thrive My Way)

This is one of the most interesting demographics concerning small business owners. The education provided by a degree can help new business owners meet the fundamental challenges of running a company. This might be figuring out cash flow or completing their taxes.

(Fundera)

Many business owners don’t start running their own company until they have funds to invest or have become disappointed in working for a company. Therefore, they are more likely to start a new company in their late 30s or early 40s, if we look at the demographics of small business owners.

This general statistic can be broken down by industry and annual revenue to get even more insight into the age of small business owners.

(Guidant Financial)

Statistics on small business failure indicate that 1 in 12 small businesses close down every year, and the most significant reasons are cash flow or sales. However, this can happen for multiple reasons, such as not researching market expectations, providing a good product, lack of marketing, or healthy accounting practices.

Funding can help businesses stay afloat for longer to prove their profitability. However, that requires a track history, which is something many small businesses can’t provide right away.

(SBA)

Micro businesses can be defined as having less than ten employees and starting costs of around $3,000. In some industries, these starting costs would be impossible to work with. However, the running cost of home-based businesses can be $2,000 to $5,000, which fits in the micro business category.

Business owners that do not have ample funds, or understand how to secure funding from external sources, will only have the option of starting a micro business.

(Business News Daily)

On average, how much does a small business make? For a small business, the average revenue is not high at all. Most small business owners are not making millions, the wages are close to the average, but it is higher than the average annual income for regular jobs. Most business owners pay themselves a relatively small yearly salary in the hopes of growing their business.

The yearly average revenue of a small business is nothing to get excited about, but the lifestyle might be worth it for some. Also, this is not a fixed income and has the potential to increase significantly as the business develops.

(Payscale)

Investors look at many factors when deciding where to allocate their investments. This includes growth potential, product quality, and the business owner’s work ethic. Most small businesses need extra funds, whether that is to stay afloat or grow. Unsurprisingly, the majority of small businesses would grow bigger given a choice.

(World Bank)

According to small business loan statistics, $10,000 is a feasible amount for banks and investors to take a gamble on a business and provides the required resources to get many companies off the ground. However, the figure changes depending on the industry.

For example, small business startup statistics show the average IT startup can raise around $80,000. That’s because they have the highest potential to grow big. Therefore, investors are drawn to tech companies and willing to invest more money.

(SBA)

This means that there are many potential small business owners that would like to get started but do not have the required funding. It reflects the current culture where many people would rather start a business than work for somebody else.

However, many people do not have the funding required to get their projects off the ground. Also, some potential business owners might feel like they need more money than is actually needed.

(Kabbage)

This means that a small portion of small business owners have confidence in their company growing. That might be because of market conditions or no plan to make the business grow. Also, many small business owners do not understand how to read the data determining whether their business will succeed or stagnate.

(Guidant Financial)

Stats on small businesses show that around half of businesses fail during the first five years of operation. That’s because they declare bankruptcy due to running out of money, slashing small business success rates in half.

It might be because the products have become obsolete, better competitors have come to the market, the market has shrunk, or there is no longer any demand for what the company was created to sell.

(SBA)

We can clearly see the effect of covid on small business as statistics show more than 50% closed during the pandemic. Since April 2020, a disproportionate number of small businesses have had to shut down because of new regulations. Some companies are simply forced to shut their doors or have to deal with unfamiliar market conditions.

For instance, many customers started buying goods online, which large retailers were in a position to facilitate, whereas many smaller businesses that rely on local footfall could naturally not compete.

(Yelp)

The small business failure rate increased during this period, and the lucky businesses that were able to continue operations during the pandemic struggled to make the same number of sales as before. That might be because restrictions were in place, meaning fewer people could be served at a restaurant, or each store could only allow a small number of people to enter.

(Guidant Financial)

Statistics on small businesses indicate that most small business owners have no regrets about starting a company, which is an interesting statistic because many have difficulties. This might be because the difficulty of starting a business is anticipated.

Also, many owners might have the viewpoint that starting a business is failing rather than never giving it a try in the first place.

(Fundera)

Statistics about small business indicate more than 50% of business owners are optimistic when starting a small business.

Feeling optimistic about your small business is a good attitude—otherwise you won’t have the required strength to make it through difficult times. Most business owners are proud of what they have created and are working to grow. Therefore, they will naturally feel like they are optimistic about future growth potential.

(Salesforce)

Small business owners that are looking for a new business idea should consider restaurants and food. That’s because there is a huge demand for such services in most locations around the world. Some locations have too much choice of specific food types.

However, there are always gaps in the market that allow new small business owners to generate a lot of interest in a highly contested location.

(Guidant Financial)

Small business ecommerce statistics show that many people that got started during the pandemic did so through tough conditions They arguably steered away from physical-based businesses because of the negative impact of the pandemic. Also, most people view online-based businesses as easier and cheaper to operate because there is no need to maintain a physical location.

(Salesforce)