As a small business owner, keeping track of key statistics is crucial for monitoring the health and performance of your business.
As a new business owner, utilizing statistics and metrics can give you an advantage over your competition. While some of these metrics can be complex, it's important to pay attention to the ones that may impact your venture, whether directly or indirectly.
Understanding and analyzing these metrics enables you to make informed decisions to drive growth and success. Here are six major statistics to monitor as a small business owner in 2023.
1. Number of Small Businesses Globally and in the US?
Small and medium-sized enterprises (SMEs) are crucial to the global economy, representing approximately 90% of businesses worldwide. They contribute significantly to employment, making up about 50% of jobs globally.
Small businesses have a significant impact on job creation and economic growth, with 400 million operating internationally. In the US, 33.2 million small businesses make up 99.9% of all businesses. Although definitions of small businesses vary, the majority of US small businesses have fewer than 20 employees or none at all, emphasizing their diverse and crucial nature.
2. What Roles Small Businesses Play In The US Economy
Small businesses are significant in the US economy, representing 99.9% of all businesses and employing 47.5% of private sector employees. They also play a crucial role in exporting, contributing 32.9% of the total export value.
Over the past 25 years, small businesses have been responsible for creating 12.9 million new jobs, underscoring their significant impact on employment, revenue generation, and international trade in the US economy.
3. What is The Number Most Common Reason For Starting A Business?
Small business statistics highlight the various motivations behind individuals starting their businesses. Approximately 29% of respondents express the desire to be their boss, indicating a strong aspiration for autonomy and control.
Dissatisfaction with corporate jobs motivates 17% of entrepreneurs seeking to break free from traditional work environments. Passion for their interests drives many individuals to turn them into successful businesses. Surprisingly, only 12% start their business due to a presented opportunity.
Entrepreneurship is motivated by the desire for autonomy and fulfillment. Starting a business allows individuals to take charge of their time, decisions, and work environment, leading to financial independence and personal satisfaction.
As for small businesses, their biggest challenge is often staying afloat in a competitive market. According to statistics, approximately 20% of small businesses fail in their first year.
4. What Is The Biggest Challenge for Small Businesses, and What Percentage of Small Businesses Fail?
Small businesses face significant challenges, including poor labor quality and financial constraints. Around 52% of respondents identified labor quality as a major problem, with small business owners struggling to find qualified hires.
Small businesses face various challenges, such as poor labor quality and financial constraints. According to a survey, 52% of respondents highlighted labor quality as a significant issue, as small business owners find it difficult to hire qualified personnel.
Furthermore, limited financial resources create financial hurdles for smaller corporations. While the risk of failure is daunting, it should encourage entrepreneurs to plan and minimize potential risks. Data indicates that more than 20% of small enterprises fail within their first year of operation.
5. What are The Methods of Launching a Small Business?
Franchising has become highly popular, with 46% of small business owners opting for a franchise license. This approach provides the advantage of a proven business model, an established brand, and an existing customer base.
In contrast, 35% of small business owners chose to purchase an existing business, while only 21% started a business from scratch.
Also Read: 3 Smart Ways to Utilize Crypto and Blockchain as a Small Business
6. What is the Average Small Business Revenue?
In 2020, 63% of small businesses were profitable, while 23% experienced a loss in revenue and 11% ceased operations. The average annual revenue for self-employed businesses was $44,000, while employer firms earned around $4.9 million.
According to statistics, the majority of small business owners prefer to acquire an existing business rather than start one from scratch, with only 21% opting for the latter. Additionally, there is a question about the average revenue generated by small businesses, with 63% inquiring about this in 2020.
Wrapping Up
As a small business owner, tracking essential statistics is vital for informed decision-making and long-term success. In the dynamic landscape 2023, staying informed with small business statistics and revenue trends empowers you to adapt and thrive.
So, keep a close eye on these essential stats to make data-driven decisions and propel your small business toward continued growth and prosperity.