Small Business Statistics
The latest Small Business Statistics are here, and they show that many entrepreneurs have lost their businesses due to the current economic climate. While there are still some industries that are profitable, most SMEs are struggling to stay afloat. Oil and gas extraction, beverage manufacturing, forging and stamping, and software publishing are among the industries with the lowest profitability. Small businesses also experienced a lockdown period caused by the Covid-19 virus, which affected a reported 31 percent of US businesses.
Small business owners are increasingly becoming tech-savvy. According to one study, 75% of them have a bachelor’s degree. However, many find it difficult to find qualified employees for their companies. In fact, almost half of small business owners struggle to find employees, with more than half of them finding it difficult to find the right professional for the job.
The US Small Business Administration defines a small business as a firm with fewer than 500 employees. Small businesses often wonder whether they will be able to grow, how long it will take, and what obstacles may hinder their growth. Understanding recent statistics can help business owners make strategic decisions and increase the likelihood of profitability.
Small businesses are vital to the economy. While the number of new businesses in the United States continues to rise, fewer than half survive the first five years. However, those that do survive will often invest heavily in technology, with 68% of those that survive using software for their financial management. Even when the economy is struggling, small businesses account for about 44% of the country’s employment.
According to the Small Business Association, one out of every five small businesses is in a poor financial position. A quarter of these businesses fail within the first year, and a third will fail within four years. In addition, three out of four will be out of business within fifteen years. The main challenges faced by small businesses are lack of cash flow and poor marketing.
According to Small Business Statistics, more small businesses are relying on personal loans and credit cards to keep their businesses afloat. More than half of the firms with employees used equity to finance their businesses. However, this method of financing is not suitable for many small firms. They require a significant amount of time to recoup the investment. Small businesses must also spend a significant amount of time growing in order to recover their capital.
Women make up almost half of small businesses in the United States, but they lead less employer firms. Minority groups are underrepresented in employer-led businesses, but one out of nine minority-owned businesses employs other people. However, white-Caucasian businesses account for the majority of all businesses. The data show that the number of women in the small business sector is growing year after year.
According to the Small Business Statistics, 71% of small businesses have a website, and seventy percent of these are mobile-friendly. In addition, seventy-four percent of small businesses use social media to market their products or services. While Facebook is the most widely used social network for small businesses, nearly three-quarters use Twitter and Instagram to attract new business. Small businesses are also spending money on advertising through paid media.