There’s a famous quote that goes, “There are three kinds of lies: lies, damned lies, and statistics.” While the original source of the quote is up for debate, its meaning is clear — you can use statistics to prove just about anything.
And that’s exactly what we’re going to do.
We’ve gathered the best and most interesting small business statistics across the web to prove that things are great for small businesses in the US… and to prove that things are not so good… and show that it’s really a mixed bag out there.
Let’s get started on the good foot. Things are awesome!
Positive small business statistics
- Let’s start with a super empowering stat: The number one reason people start a small business? They want to be their own boss! (Guidant Financial)
- And it looks like that was a good decision for most, with 72% of small business owners saying they are “Somewhat Happy” or “Very Happy” as business owners. (Guidant Financial)
- In similar news, 71% of small business owners feel Somewhat, Very, or Extremely optimistic about the post-pandemic economic recovery. (NEXT)
- And despite the challenges of the last few years, 76% of business owners expect their business to survive today’s economy. (Guidant Financial)
- Small businesses can be run by anyone, with Boomers making up 40% of owners, GenX making up 47%, and Millennials holding the reins at 13% of small businesses. (Guidant Financial)
- While big corporations hog the headlines, there are over 33 million small businesses in the US which make up around 99.9% of all the businesses in the country. (SBA)
- That many businesses mean a lot of employees, 61.7 million actually, which accounts for 46.4% of the total U.S. workforce. (SBA)
- Without the drive of small businesses, the U.S. economy would be in big trouble because small businesses make up 44% of our gross domestic product. (Forbes)
- Finally, while not perfect, small businesses are much more gender-equal than most boardrooms, with women making up 47.3% of all small business employees and 43.2% of small business owners. (SBA)
Not-so-good small business statistics
- We’ll get this one out of the way: 20% of small businesses fail in the first two years of being open, which isn’t great but better than half, which is what we were usually told. (Investopedia)
- That said, staying in business is hard, with 45% of businesses closing within the first five years and only 35% of small businesses making it to the 10-year mark. (Investopedia)
- The most common reason for these failures? Lack of cash flow. (SCORE)
- The next biggest reason small businesses go under? Selling what people don’t need. (CBInsights)
- Unfortunately, 90% of small business owners aren’t confident their business is adequately insured. (NEXT)
- In fact, 29% don’t carry any insurance coverage at all! (NEXT)
- Hope you’re doing something you love because the majority of small business owners work over 50 hours a week, with 25% reporting they work 60 or more hours a week. (Inc.)
- And be prepared for a grind like that: the average business takes 3-4 years to become profitable. (Linkedin)
Mixed bag small business statistics
- Small businesses are true to name: 72% have less than ten employees, and fully 16% are single-person operations. (Guidant Financial)
- That means there are over 27 million businesses in the US with zero employees. (SBA)
- 20% of small businesses with employees were owned by minorities, totaling about 1.1 million firms. (SBA)
- 77% of small businesses use social media to promote their business. (SCORE)
- The biggest cost of doing business for small businesses? Labor, which can be as much as 70% of total business costs. (The Business Journals)
- The future is now! 25% of small businesses are currently using artificial intelligence in some form or another to run their business. (BusinessDTI)
Do these small business statistics match your experience?
It’s hard to draw any conclusions when the statistics are dragging you in every direction. Is it a good time to be a small business owner? A bad time? A little of both?
That’s not for us to say, only you know when it’s the right time to go into business for yourself, but when you’re ready to make that leap, NEXT will be here to make sure you’ve got the coverage you need.
With our online application, you can review your coverage options, get a quote and purchase coverage — all in less than 10 minutes. Your certificate of insurance is available immediately.
