The Small Business Administration defines a small business as a firm with fewer than 500 employees. While these organizations are defined as small, their impact on our economy could not be larger. Small Business makeup 99.7% of all businesses in the United States. These businesses employ over 59 million people.
We interact with Small Businesses every day, but most of us do not understand or appreciate the importance of these organizations. At this time of year, we should all strive to be thankful for and to support the Small Businesses in our community.
Small Businesses include online stores and corner shops to accounting, consulting, lawn care, IT support, and cafes, small businesses are as diverse as they are numerous. Over 500,000 new small businesses are started every month. Given this, the market is very competitive and growing. These business owners are striving to achieve their dream of being their own boss and doing what they are passionate about.
If you are a small business owner or plan to start one, understanding the landscape of small business may be helpful. The following list of statistics provides some detail about the small business sector. The following is a subset of key statistics included in a post on Small Biz Genius. Their posting provides these and a list of other very interesting statistics and details about Small Businesses in the U.S.
Small Business Facts:
1. 82% of businesses that fail do so because of cash flow problems.
2. Small businesses employ 59 million people in the U.S.A.
3. 50% of all small businesses are operated from home.
4. 84% of small business owners indicate that they’re feeling optimistic about the future of their companies.
5. 64% of small business owners begin with only$10,000 in capital.
6. Approximately a quarter of small businesses begin with no financing whatsoever.
7. Only 40% of small businesses are profitable.
8. Only 64% of small businesses have their own website and engage in digital marketing.
These statistics provide an overview of the operating climate for small businesses. The area of the country and the business sector that you choose to operate in will impact these statistics greatly. Developing and executing a detailed business plan is the best approach for reaching success with your dream of owning your own business.
Small Businesses face numerous challenges daily. These challenges include, but are not limited to, inflation, availability of capital, cash flow, government regulations, health care, taxes, and staffing. Despite these headwinds, the intrepid Small Business owner stays focus on meeting the challenge if possible.
Over the past year, the impact of COVID-19 has changed the Small Business landscape forever. Two significant impacts, The Great Resignation and the inability to find qualified replacements, continue to challenge the Small Business sector. As people begin to rethink the definition of career and jobs, these two challenges will continue.
The outlook for Small Business continues to be positive despite these and other challenges. Freelance businesses and other remote work force organization continue to grow. The number of new businesses continue to grow each month. As The Great Resignation continues, these people are leaving the traditional work force and become Small Business owners. Whether single employee or a Micro Business of 5 or less employees, these businesses continue to grow.
Small Business, despite all challenges, continues to be the fastest growing sector in the U.S. economy. Small Business owners are creative, risk adverse, and innovative because their companies are their passion.
We must recognize the contribution Small Businesses make in our communities, and work to support them in all ways possible. An associate recently told me that she only likes to shop at a business that “Has a door”. We should all incorporate this mind set and utilize Small Businesses when we have the opportunity.
Small Business owners need support from other Small Business as well. Seeking detailed and ongoing accounting support is always advantageous for your business or organization. If you would like to discuss our services and support related to accounting, please visit Taylor and Willis CPAs and Advisors | Accounting (twcpas.net).