Small businesses make up 99.7% of all businesses in the US, making them a vital part of our economy.
And it’s not just the US that benefits from small businesses. Countries worldwide benefit from the innovation, new business, and fresh ideas that startups bring to their economies and business culture.
It’s no wonder that entrepreneurship is becoming more and more popular! More and more people are ready to start a business.
In the US alone, the rate of entrepreneurship has increased by 15% in the past two years, according to The Kauffman Index.
Before starting your business, you should know what to expect as you get started.
Knowledge is power. For example, entrepreneurs that take the time to write a business plan are 2.5 times more likely to start and grow a successful business.
If you are an entrepreneur planning to start a new business, here are important statistics about starting your own business.
2. 42% of startups fail because they failed to meet a market need. [More insights: Tips on Defining The Size of a Market for a Startup Business].
3. 74% of tech startups fail because they scaled too fast. [More insights: How To Avoid Failure: Two Common Small Business Mistakes and Successful Entrepreneurs Know That Failure Is Rarely Permanent].
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4. About 50% of all small businesses fail within their first 5 years. [More insights: The Science of Bad Decisions and How You Can Avoid Making Them].
5. It takes about $80,000 per year to run a startup. Most of that money comes from debt and equity.
6. The median revenue of a small business is $390,000. Only about 26% of small businesses generated more than $1 million in revenue in 2016. [More insights: How Marketing Velocity Can Help You Increase Sales and Revenue and 10 Web Design Best Practices and Tips for Small Businesses].
8. More than 50% of small businesses have a Chief Financial Officer or someone else that holds a similar position.
9. Over a third of the US is employed by small businesses that each employ less than 100 people.
10. 42% of small businesses are S-corporations, and 23% are LLCs. While these types of corporations are similar, there are some key differences entrepreneurs should consider. [More insights: 10 Legal Mistakes That Can Destroy Your Small Business and How To Avoid Them].
11. Over 40 million small businesses have Facebook pages. 75% of that 40 million pays for promoted or boosted posts. [More insights: Is Small Business Marketing On Facebook a Complete Failure? and 22 Ways Brands Can Use Facebook Live Video to Drive Business].
12. 94% of small businesses use smartphones as their main phone service. 49% of these businesses use their smartphones to do business 7 days a week.
13. 51% of small businesses are reluctant to use new technology because it takes too long to implement and learn.
15. 543,000 new businesses are started every month. There’s a lot of competition out there!
16. Businesses with two founders raise 30% more investment funding than businesses with a single founder. [More insights: Startup Tip: Ten Suggestions For Raising Start-Up Capital from Angels].
17. Immigrants make up for 12.5% of US entrepreneurs.
18. 51.6% of small businesses are run out of a personal home.
19. More than 50% of all small businesses have virtual offices, with their employees working remotely. [More insights: The Surprising Ways a Distributed Team Can Help Your Company Succeed].
20. It only takes 6 days to start a business in the US. That’s a shorter wait than a lot of other countries.
21. About 51% of small business owners have a bachelor’s degree.
22. In 2016, the most effective small businesses will each spend more than $2 million on content marketing. That number is expected to grow in 2017. [More insights: How To Create Content Marketing Unicorns and Why Content Marketing Is Essential For Successful Startups and Small Businesses].
For many entrepreneurs, the rewards of starting a new business outweigh the risks. But you still need every advantage that you can get. We hope that these insights help you to succeed with your business idea. Good luck!