Small Business Statistics

Whether it is a general retail industry or a sports and recreation industry, starting their own business is a dream for many. With many ideas and dreams in their minds, many people these days want to break free from workplace rules, politics, and any internal chaos that can limit their growth. They want to have full control over their time and goals.

At first, starting your own business sounds overwhelming and complicated. Don’t worry! Break your dreams into small steps, take the first big step with courage and follow the small steps that you lay down for your entrepreneurial path. But before you start any of this, you first need to know the latest small business statistics that will give you an idea of the recent trends.

If you are looking for the latest statistics, then this article is for you. Let’s hop into the article right now without any further delay.

On this page, you’ll find:

1. General Small Business Statistics
2. Small Business Financial and Revenue Statistics
3. Technology and Digital Transformation in Small Businesses
4. Modern Workplace and Workforce in Small Businesses
5. Small Business Failure Statistics

Key Small Business Statistics

Here are the top stats from the article below:

• More than 90% of the business population is represented by Small and Medium Enterprises (SMEs) and account for up to 70% of global employment. (United Nations)

• Around the world, there are an estimated 445 million micro and small and medium enterprises in emerging markets. (World Bank)

• In annual sales, 19% of small businesses generated between $200,000-$500,000. (National Business Capital & Services)

• As of 2020, the average amount of small business loans backed by the U.S. SBA is $107,000. (U.S. SBA)

• When allocating the budget for 2021, small businesses are expected to prioritize hardware(35%), software(31%), and hosted and cloud-based services(22%). (SWZD)

• At least one form of digital technology is utilized by 84% of small businesses to provide information to their customers. (U.S. Chamber of Commerce)

• Small businesses employ 60.6 million workers, which represents 47.1% of the total U.S. workforce. (U.S. SBA)

• On average, small business owners personally take 4.2 roles, which include leader, communicator, marketer, and financial manager. (Salesforce)

• The biggest challenge faced by 28% of SME owners is cash flow. (Facebook)

• According to 13% of small business owners, administration work is the top challenge. (National Business Capital & Services)

General Small Business Statistics

A great way to make money by doing something that one loves is to start their own small business. Worldwide, economies are built on the foundation of small and medium-sized businesses. A majority of American and European businesses comprise small businesses. Here is an insight into the general small business statistics.

• More than 90% of the business population is represented by Small and Medium Enterprises (SMEs) and account for up to 70% of global employment. (United Nations)

• Around the world, there are an estimated 445 million micro and small and medium enterprises in emerging markets. (World Bank)

• In the European Union, 99% of all businesses are classified as SMEs. (European Commission)

• In the U.S., 97.5% (285,334) of the total number of exporters are SMEs. (U.S. SBA)

• In the U.S., there are 31.7 million small businesses as of 2020, representing 99.9% of the total businesses in the country. (U.S. SBA)

• In the U.S., 89% of the total number of businesses account for micro-businesses or those with less than 20 employees. (Oberlo)

• 73% of all small businesses are owned by women in the U.S., while men own 27%. (Guidant Financial)

• Compared to the national average of 33% of the population, 53.78% of small business owners have a bachelor’s degree or higher degree. (Fundera)

• The most popular small business industries as of 2020 are retail and business services, with both accounting for 13% of the total number of SMEs. (Guidant Financial)

• Since studies have found out that 92% of customers hesitate to purchase in the absence of reviews, small businesses will be focusing on user reviews. (Freshworks)

Small Business Financial and Revenue Statistics

The biggest challenge faced by small businesses is financial and tax management. Apart from handling the administrative and operational tasks, owners of start-ups and small businesses have to do accounting and tax preparation all by themselves. Let us look into a collection of statistics that throw light on the financial requirements of small businesses.

• In annual sales, 19% of small businesses generated between $200,000-$500,000. (National Business Capital & Services)

• As of 2020, the average amount of small business loans backed by the U.S. SBA is $107,000. (U.S. SBA)

• The average cost for starting a micro business is $3000, while most of the home-based franchises have a starting cost ranging between $2,000 and $5,000. (Business News Daily)

• $32,000 is the average cost of starting a retail business, but 42% of store owners launched their business with only $5,000. (Camino Financial)

• In 2020, the most popular form of SME financing for 37% of new business owners was cash. (Guidant Financial)

• Even though accountants serve as small business owners’ most trusted business advisors, only 30% of small businesses have an external accountant. (OnPay)

• Small business loan approval fell from 13.6% in August 2020 to 13.5% in September 2020 at big banks or those with more than $10 billion in assets. (GlobeNewswire)

• $66,373 was the average salary of a small business owner in 2019. (Fundera)

• Yearly, 83% of small business owners earn less than $100,000, while 30% do not earn from their business at all. (Fundera)

• 19.8% is the estimated average effective tax rate paid by small businesses as of 2019. (Fundera)

Technology and Digital Transformation in Small Businesses

In terms of technology and digital transformation, small businesses have come along way. Technology has given small businesses the ability to connect with their customers through e-mails, blogs, social networks, and forums. Small business owners take advantage of this spontaneous connection to get feedback from their customers and implement them immediately. Let us now take a look into some statistics on the importance of technology and digital transformation in small businesses.

• When allocating the budget for 2021, small businesses are expected to prioritize hardware (35%), software (31%), and hosted and cloud-based services (22%). (SWZD)

• At least one form of digital technology is utilized by 84% of small businesses to provide information to their customers. (U.S. Chamber of Commerce)

• CRM system is preferred by 45% of all SMB leaders, and 3 in 5 using CRM have had it for less than 2 years. (Salesforce)

• The top factors SMBs look for in new technology are ease of use (69%), trustworthy vendor (63%), and price (61%). (Salesforce)

• 85% of small companies have invested in Software as a Service (SaaS) products and solutions. (BMC)

• Small companies with 50 employees or less use an average of 25-50 SaaS solutions. (BMC)

• 92% of small business owners believe that the most effective digital marketing strategy is having a website. (Fundera)

• In the U.S., 51% of small businesses have a website as of 2019. (Blue Corona)

• In 2020, 29% of small businesses started using a website. (Small Business Trends)

• In the next 3 years, the most exciting opportunity for SMEs is the ability to deliver personalized real-time experiences (31%) according to a 2019 study. (Adobe)

Modern Workplace and Workforce in Small Businesses

It is easier to communicate and collaborate with colleagues because of today’s digital workplace which enables employees to go beyond the four walls of the office. It has become a trend for small businesses to have a distributed workplace. Now, let us look into some statistics to know how small businesses fare when it comes to the modern workplace and workforce.

• Small businesses employ 60.6 million workers, which represents 47.1% of the total U.S. workforce. (U.S. SBA)

• On average, small business owners personally take 4.2 roles, which include leader, communicator, marketer, and financial manager. (Salesforce)

• 70% of small business owners work more than 40 hours a week, with 19% of them working for about 60 hours a week. (Fundera)

• Only 2-5 employees are hired by 41% of small business owners. (Guidant Financial)

• According to small business owners, a 15% increase has been noted in challenges related to recruiting and retaining employees. (Guidant Financial)

• More than 33% of small businesses currently outsource a business process, while 52% are planning to do so. (Clutch)

• To improve efficiency, over 37% of small enterprises outsource. (Fortunly)

• Accounting and IT tasks (37%), followed by digital marketing (34%), and HR (28%) are the most outsourced tasks by small businesses. (Fortunly)

• Many small business owners do not outsource as they operate on tight budgets, only 17% outsource accounting to a CPA, 15% outsource payroll, and only 10% outsource bookkeeping. (Guidant Financial)

• Aided in no small way by freelance platforms, 63% of companies currently have remote workers. (Finances Online)

Small Business Failure Statistics

When one starts a business, failure isn’t something that comes to their mind. While many reasons can result in the failure of small businesses, the reason they go out of business completely is because of one or more common mistakes made by them. Let us now look at some statistics concerning the failure of small businesses.

• The biggest challenge faced by 28% of SME owners is cash flow. (Facebook)

• According to 13% of small business owners, administration work is the top challenge. (National Business Capital & Services)

• Only about 50% of businesses survive for 5 years or more, while around 33% survive at least 10 years. (U.S.  SBA)

• The worst of the pandemic is still to come for 62% of small business owners. (U.S. Chamber of Commerce)

• It will take at least 6 months-1 years for the economy and business climate to return to normal according to 56% of small business owners. (U.S. Chamber of Commerce)

• Around 25% of small business owners think that the government relief bill is of little to no help to their business. (ZenBusiness)

• During the onset of the COVID-19 pandemic, at least 7% of small businesses laid off or furloughed their entire workforce. (OnPay)

• In 2020, small businesses had to lay off or furlough an average of 27% of their workforce. (OnPay)

• Due to the COVID-19 pandemic, 83.5% of businesses in the accommodation and food services sector experienced a negative effect. (U.S. Census Bureau)

• 79% of small business owners feel that they didn’t receive the proper support. (National Business Capital & Services)

Conclusion

Now that we have come to the end of this article, what are the small business statistics for 2021 trying to teach us? It is clear that despite the repercussions of COVID-19, the small business sector is a force to be reckoned with. This is the main reason why many B2B companies are rushing into this vast market. These days consumers prioritize convenience and ease of use more than ever. These changes will likely continue as we enter into a world where resources and products are available at our fingertips.