When it comes to the work environment of most Americans, it is the small business sector that the majority are employed. A small business is defined as any business that employs less than 500 people at a time, and these types of companies account for 99% of all of the businesses in the country. For this reason, those thinking about starting a business of this type face a bit of competition, but there’s a lot of room for success. Broadly has created this informative infographic to illustrate some of the top stats in this business sector.
Small Businesses Can Be for Everyone
These types of businesses are a great sector to consider for minority and women entrepreneurs; about eight million of these businesses are run by owners that are Asian, Black, Hispanic, or Native American. This number of minority-led companies is only growing!; based on the infographic on Broadly, a steady increase of as much as 38% has been observed, which means that the market is becoming very friendly to people of color. Additionally, for women entrepreneurs, the small business market is growing into a very worthy consideration for investment as well.
When it comes to employing people, small businesses owned by women and people of color have a relatively high number of paid employees. For women-owned businesses, about 10.5% of the small businesses in the country have paid employees. For businesses owned by minorities, the number is slightly higher; about 11% of these businesses have paid employees that help in day-to-day operations.
Management and Some of the Pitfalls of Ownership
When it comes to owner salaries, there’s a wide range of numbers that can be encountered in this space. Owning a small business does not guarantee that you will succeed as these stats will show you:
- The median cost for a small business startup is about $10,000.
- As much as 30% of the business owners don’t even take a salary.
- About 86% of owners earn less than $100,000 per year.
- The average salary for many owners is about $59,000.
It Takes Extensive Work
The market for small businesses is healthy, but it’s essential to understand that it’s very easy to fail when you’re running a business of this type. Typically, the factors that cause business failure can be avoided, but the stark data presented in the Broadly infographic states that up to 50% of these small businesses will fail within five years, and 70% will fail in double that time period.
Unfortunately, much of this comes down to mismanagement:
- The standard business owner tends not to delegate properly and will take on too much responsibility.
- About 82% of small businesses also tend to fall victim to poor cash management.
- Cyber attacks also cannot be ignored; small companies are about 43% likely to encounter a hack. In fact, about 60% will experience this within the first half-year.
Be Ready to Embrace Marketing
This is essential, and about 47% of small business owners handle their marketing efforts in-house. Also, about 87% handle marketing via social media platforms. Despite this, about 84% of potential customers prefer businesses with a website to those that primarily engage with customers via social media.