Small business statistics and insights
More and more people are starting their own small business. They want to work for themselves, for an idea and for a cause they care about.
In 2020 there were 5.9 million small businesses in the UK which form 99.3% of the total business in the kingdom. In the US the SMEs are around 30 million or more than 99%. In the Europian Union also 99% of the businesses are classified as SMEs.
In the US small businesses create around 1.5 million jobs annually. In general small businesses are accounting for up to 70% of all jobs worldwide.
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Before you dive into the business world armed with ideas and enthusiasm, here are some data and insights that might help you.
Small business data from 2019 and 2020
The definition of an SME (small and medium-sized enterprise) is different around the world.
The Small Business Administration (SBA) considers a business “small” if it employs less than 500 people.
In the European Union, the situation is a little different. For a business to be considered small it must employ fewer than 50 people.
Small business statistics from around the globe:
- More than half of small businesses are operated from home
- The starting capital of more than 60% of those businesses is around $10,000
- Only around 40% of small businesses are profitable
- Just 64% of the small businesses have a website
- More than 50 percent of small businesses fail within the first year and more than 95 do so in the first five years
- 82% of the businesses fail because of cash flow problems
- Around 30% of SMEs in the US shut down due to the COVID-19 pandemic
- In the US 98% of businesses have fewer than 100 employees and 89% employ fewer than 20 people
- Some of the fastest-growing categories in SME are business services, the food, the health, the beauty and the fitness industries, general retail and home services
- The majority of small businesses are run by men (73%)
- 60.6 million people in the US are employed by small businesses. This is 47.1% of the US workforce
- According to their entity, businesses pay different taxes – as of 2019 sole proprietorships pay a 13.3% tax rate while the rate for small partnerships is 23.6%
- The micro-enterprises (small businesses that employ fewer than 9 people) are the most common private sector business in the US (around 75%)
- Only 4% of the business owners have a doctorate degree
Keep in mind that those statistics are dynamic. The more information you have before starting a business on your own, the better chances for success. Current events show that almost everything can be done from home and with fewer people.
It is mandatory to do your research before starting a company.
What to know before starting your own business?
- Build a user-friendly website
The world is moving from “optimized for digital” to digital-first. Your business should not make an exception. No matter if you sell a product or offer a service, the digital world will be your primary habitat.
One-third of small business owners do not know the importance of having a website. Nowadays, when people work mostly from home, having a strong digital presence can be crucial for the success of your business.
- Plan your digital marketing campaign
After you developed your internet page it is time to lead people to it. Having a strategy for your digital presence is mandatory. For starters be sure to include display ads, search engine optimization and social media marketing in your marketing strategy.
There is no universal formula for success. You should always keep in mind your customer, their habits and learn from them. That way you will know where and how to approach them with a suitable message.
- Be sure to keep your visitors on your website
People are coming to your website and that is great! It is challenging to keep them interested and convert them into customers. More and more users are becoming “digital natives” and they roam the internet and consume a great volume of content.
Naturally, one thing you can do is update your blog regularly with information that interests your audience. Give them accurate, well-written and up-to-date news about your business and find where you can expand yours and their knowledge.
When you have the attention of your prospective customers it is time to get their interest. Use the diversity of your visitors to your advantage. You can present tailored-made popup offers that catch your customers’ eye just at the right moment.
Catchfull can be your guide and offer you different approaches for your website. You can explore the world of popup ads and find the best solution for your business.
- Stay true to your ideas
If you are doing everything right and your business is blooming do not forget how and why your business started. There are people from different generations that start their own companies.
On one hand, Baby Boomers are more practical and will more likely start a business according to what the market needs. On the other, Millenials and Gen Zers say that their reasons for starting a company are ideas, that they are passionate about. That doesn’t mean that Boomers don’t follow their dreams or that Millenials don’t know the market.
Regardless of whether you just started your company or you want to jump into the large businesses, combine business thinking with the freedom to invent. And when the long-awaited day comes and your business is finally running – write down your reasons to do what you do. Be sure to read them every once in a while to remind yourself where it all started.
- People are the main force of every business
You can not do business without people. There are two mains groups that you should focus on – your customers and your employees. The second one is often neglected because of the first.
We all know the saying “the customer is always right” and we try to follow it when doing business. The customer is nurtured, treated with respect, sometimes even spoiled. People like to feel important and are more likely to be loyal to you if they feel respected.
The same things are valid for your employees. Unfortunately, they are often neglected. Try to show them your appreciation. In order for them to do a great job, they should feel valued.
Statistics show that the biggest challenge for small businesses is labour quality.
It is tremendously hard to find young, motivated and smart people who share your values and are willing to work in a newly-founded company. If you are lucky enough to have found them, make sure to keep them happy and motivate them daily.
There is a lot of data that you should consider when running a business. The good thing is that before jumping into deep waters you can learn from the mistakes of those before you and borrow their insights.
Everything in this blog post is a good foundation of your business knowledge but you should always keep yourself up-to-date. It is crucial to know how and where to find the information needed and not rely only on empirical tests.
Even though you are the boss, find people who can be your partners in business and whom you can delegate important tasks.
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