According to the American Chamber of Commerce, a small business is any business having less than 500 employees. As a business coach, this one of the key questions I ask any person who come to me for business coaching – why do you think you need to start a business? At the first sight this might seem like a simple question to answer. However, I have come to the understanding that this is by far the most difficult question for startups and well as seasoned entrepreneurs. This is primarily because business is not a static process. It is a continues process that involve dynamic and complex decisions on a daily basis. This simply means that how well you are able to understand your reason for starting a business will determine how successful you will be in business.

One of the important drive for business success to know and understand the statistic of people are doing well in business as well as people who do not do well in business.. According to the American Chamber of Commerce, getting any business going from the ground up is no easy task. Many difficult tasks lie ahead for the enterprising entrepreneur: crafting a business model, selecting a location, securing funding, breaking even (or turning a profit), and more. Knowing the facts and statistics regarding the creation of a business can help entrepreneurs plan wisely and avoid common challenges.

Below we discuss  4  relevant statistics and information that will help you make the decision if business is for you and what type of business you should start. 

1. The growth and survival statistic of small businesses

• 80% of small businesses survive their first year, while that number drops to 70% at the end of the second year.
• Five years after being established, around 50% of small businesses are still afloat.
• About 400,000 small business are started every year in the United States based on statistics ranging from 2009-2016 as per the American Chambers of Commerce data.

How many small businesses are there in the United States?

•  As of 2018, there are 30.2 million small businesses operating in the United States.
• 22 million of them are individually operated, meaning that they have no other employees other than the owner.
• About 99.9% of businesses in the United States are small businesses.
• Nearly half of the nation’s workforce (49.2%) are employed by small businesses. This amounts to 120 million people. In a given year, small businesses account for 60-65% of net new jobs. Specifically, this amounts to
  around 2 million jobs a year.

Why do 20 percent of small businesses fail in the first year?

• Lack of funding: When the owners of failed small businesses are surveyed, almost half of them claim
  that lack of funds resulted in the failure of their business. This means that they were not making enough money to sustain the business.
• Poor planning and management: These are also among the top reasons why most small businesses fail.

Which industries are industries are startups most likely to succeed?

• Healthcare and social assistance is the industry where small businesses succeed the most: 85% of small businesses in this industry are still up and running after one year, 5% above the average survival rate.

In which industries are startups most likely to fail?

• 17% of restaurants actually close within a year of opening. This is slightly below the average failure rate for small businesses, overall. The construction and warehouse and transportation industries are the most difficult to break into,
  with each boasting a 75% failure rate in the first year.

How many small businesses are profitable?

• 40% of small businesses are turning a profit. Of the remaining 60%, half are breaking even, and the other half are losing money.

What percentage of U.S. businesses are run from the home?

• 52% of small businesses in the United States are home-based.

What is the median income for self-employed entrepreneurs?

• In 2016, individuals employed at their own businesses earned an average of $50,347 a year.

The amount of funding needed to launch a small business can vary widely according to an entrepreneur’s business plan.

• For a home-based business, $5000 may be enough to get off the ground, while opening a restaurant in a centrally located area can cost up to $500,000. The Ewing Marion Kauffman Foundation estimates that $30,000 is the average cost of starting a small business.

What percentage of small businesses are self-financed?

• Around 75-80% of small businesses are self-financed. Most of these businesses are small, home-based operations with few or no employers beyond the owner.

What percentage of small businesses are financed by other means?

• 16% of businesses are funded by bank loans, while loans from family and friends account for 2-6% of initial small business funding.

What’s the approval rate for small business loans?

• Higher interest rates have accounted for better loan approval rates in the past two years. However, approval rates vary depending on the institution type. As of July 2018, institutional lenders approve 64.8% of requests, big banks approve 26.3%, and small banks approve 49.7%

How much is the average small business loan amount?

• According to the Small Business Administration, in 2018 the average for an enterprise loan was $417,316 and the average microloan is far less: $13,000.

How long does it take to receive financing after your loan’s been approved?

• Usually it takes about 6 months after being approved to receive SBA loan funds; however, an individual can take steps to expedite the process and receive the loan in 2-3 months.

How many small businesses use accountants?

• About a third of small businesses employ the services of a professional accountant, yet 82% of businesses use accounting software to balance their books.

What’s the most common type of legal structure for a small business?

• Nearly half (47.3%) of small employer businesses (businesses with 1-100 employers) are S-corporations, which is the most common type of organization for this type of business.
• About 86.4% of non-employer businesses are sole proprietorships
• About 14.4% of small employer businesses are sole proprietorships.

What is the average tax rate that a small business pays?

• Small businesses in the U.S. pay an average effective tax rate of 19.8%.

3. Women and Minorities in business statistics 

• Women own 11.6 million small businesses in the United States, accounting for 38.7% of small businesses. Together, these businesses employ 9 million people.

What are the fastest-growing states for women-owned businesses?

• According to a recent report commissioned by American Express, five urban areas show the most vibrancy for women-owned businesses: Austin, Texas; Indianapolis, Indiana; Raleigh, North Carolina; Salt Lake City, Utah; and San Antonio, Texas.

What percentage of U.S. businesses are minority owned?

• 8 million small businesses in the United States are minority-owned, accounting for 26.5% of small businesses in the country.

How many veteran-owned businesses are in the U.S.?

• In the United States, 2.4 million businesses are owned by veterans, which is about an 8% share of small businesses, overall. These businesses employ 5.8 million people and pay them $210 billion a year.

4. Marketing Statistics

• 71% of small businesses have a website, according to a recent survey. Of those with websites, 79% claim that theirs is mobile-friendly. Tellingly, 92% of the 29% of small businesses without a website plan to have one up and running by the end of 2018.

What percentage of small businesses use social media?

• 71% of small business owners hope to attract new business through the use of social media in 2018. Of the social media networks, Facebook is the most commonly used by small businesses as 75% utilize the website to attract customers. After Facebook, there is a significant drop-off, as just 37.5% of small businesses include Instagram in their small business plan.

What percentage of small businesses have mobile apps?

• 42% of U.S. small businesses have mobile apps, though this number is higher for small businesses owned by millennials, 55% of which have a mobile app.

How much money is spent on social media advertising?

• 32.7% of small businesses spend over $100 per week on social media advertising, while 13.2% of businesses spend $50-100 per week. 30.5% spend $11-50 a week in the lower brackets, and 23.64% spend less than $10 a week.

Stating a small business in success – being among the 50% survival rate

In order to help businesses succeed, we have been able to help business leaders to understand their business environment and take their business beyond their network. This is because we know the importance of writing a book that makes the difference in business.

It starts with you understanding who your ideal client is and the reason they will choose to buy from you despite the fact that they are millions of people out there doing the same thing you are doing. It is more about what is in you rather than what your competitors know or can do. Become an author today and learn how a book can change the face of your business.

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