Do you own a small business of your own or are you someone who is planning to start one? If yes, you’re in great company as there are 29 million small businesses in the USA, as per records from the Small Business Administration show. The total number of small business employees is 57.8 million. Businesses with less than 500 employees are called small businesses and they account for 99.8% of all American businesses. Here are a few facts on small business statistics to be aware of.
Small businesses – How important for the economy?
Small businesses have continuously played a key role in bolstering economic growth as they generally create more jobs than large scale businesses. During the first 3 quarters of 2016, small business organizations added 23 million jobs. In fact, they are the main catalyst for the economic recovery of the nation post-recession.
How often do small businesses fail to succeed?
Nearly two-thirds of businesses succeed in surviving more than 2 years in a business and half of all businesses usually survive 5 years and one-third will last 10 years. The longer the company has continued in business, the more is the possibility of the business to stay competitive. In fact, the Bureau of Labor Statistics also said that business survival rates are approximately the same irrespective of the industry.
Main reason behind the failure of so many businesses?
A US Bank study showed that a staggering 84% of businesses that fail do so because of cashflow issues. Don’t forget that cashflow is not only the amount of funds that come in and go out, it also includes accounting. It is important and necessary for business owners to follow a frugal budget and prepare cash flow statements. They can even hire a bookkeeper or an accountant or use cloud-based software such as QuickBooks.
Top challenges of a small business?
As surveyed by NASB or National Association of Small Businesses, the top 3 challenges of most small businesses are cost of health insurance, financial uncertainty and declining consumer spending. Despite these, most of owners surveyed were positive and 78% said they’re confident regarding their business.
Just as individuals require resorting to unsecured personal loan lenders, businesses can seek help of the SBA to take out loans to run the business. These small business statistics are helpful for business owners to understand what they should expect from their business.