Millions of people dream about starting their own businesses. In most cases, they imagine what entrepreneurship would be like while toiling away at a repetitive or labor-intensive job and playing by someone else’s rules.
Only a fraction of those visionaries actually experience business ownership firsthand. If you’re among the elite few who have brought the dream to life or plan to do so, take a look at these surprising small business statistics.
1) More Than 30 Million Small Businesses are Operating in the U.S.
According to the latest reports, 30.7 million small businesses are currently up and running in America. About 625,000 new startups appear each year. It has been said that small businesses are the backbone of the country. Considering the fact that they make up more than 99 percent of the nation’s business sector and drive the economy from numerous angles, that’s certainly a reasonable statement.
2) Over Two-Thirds of Small Businesses Start with Little Capital
One common myth surrounding business ownership is that starting a company takes exorbitant amounts of money. That’s not necessarily the case. In fact, 64 percent of small businesses get their start with less than $10,000. Microbusinesses, or those with fewer than 10 employees, can potentially get off the ground with less than $3,000. About 25 percent of successful small businesses begin with no capital to speak of.
3) Half of America’s Small Business Owners Work from Home
Reports show that 50 percent of small businesses are now home-based. Operating a business from home gives entrepreneurs numerous advantages. Doing so requires less startup capital because they don’t have to lease additional space and can save money on commuting. It also allows them to save up money for when the business outgrows the house.
Of course, there are downsides to running a business from home. Balancing business and family isn’t easy when you have little space to separate the two. Creating a website, carrying out an effective marketing strategy, and competing with larger companies in your niche are common challenges as well.
4) More Than 35 Percent of Small Businesses Don’t Have a Website
These days, businesses that aren’t online essentially don’t exist in the eyes of consumers. Since more than 80 percent of consumers turn to the internet when looking for products and services and nearly 80 percent of purchases are made online, being visible without a website is virtually impossible. Still, only 64 percent of small businesses have their own websites.
5) Half of Small Businesses Fail within a Year
It’s no secret that small businesses tend to struggle especially when they’re competing with larger, more established companies. About 50 percent of small businesses fail within the first year of opening their doors, and only around five percent survive beyond their fifth year. For more than 80 percent of those that fail, cash flow is the primary issue. Poor marketing, ineffective business plans, and mismanagement are also common reasons for failure.
Overall
Small businesses face a number of hurdles. Despite the struggle, they continue to dominate the business sector and foster America’s economy. Starting a business doesn’t necessarily require a great deal of capital or even a separate office space. Planning, careful management, effective marketing, and perseverance are certainly primary factors of success.