Running a business of your own can be challenging, especially in pandemic and post-pandemic times. Still, no matter how small, a private business brings more satisfaction than a nine-to-five office job. On the other hand, starting your own company is associated with more financial risks than working for someone else.
On the bright side, understanding the specifics of running your own business helps avoid common mistakes and disappointments. Below, we have listed the more relevant small business stats for 2021 based on previously known data. They should give you a better idea of potential growth opportunities and help watch out for common business mistakes.
500+ million new businesses are created every month
This sums up to 6+ million new businesses a year, and even though very few enterprises survive, new business owners face a lot of competition. So, we suggest choosing your business niche wisely. Also, pay special attention to your offer’s value for the end-customers.
99.9% of US businesses are small
Large enterprises and medium businesses are a mere fraction of total registered businesses. Of course, this figure is affected by the simple fact that some businesses are actually one-man-businesses where qualified experts register as self-employed entrepreneurs. However, such a large share of small companies in the business world is still impressive.
Only half of new businesses survive first five years
The assumption that most businesses cannot survive their first year is not exactly correct. According to recent stats, around 30% close in the first twelve months, and 20% will only shut down within the next four years. So, 50% of businesses manage to operate for five and more years.
Half of US businesses are home-based
This stat is not directly related to the COVID-19 pandemic, even though the lockdown did make remote work more widespread. Technology development has played a huge part in how we work, giving professionals a chance to offer a full range of digital services from the comfort of their homes. A lot of on-site services, like personal shopping or cleaning, are also registered at the owner’s home address.
Small business owners work 40-60+ hours a week
If you think of starting a small business because you’re interested in passive income, think again. If the business is successful, you can eventually count on passive money. But the first years will be very tough. Over 70% of small business owners work more than 40 hours a week, and 19% work more than sixty. That schedule includes weekends and holidays, too.
Only 64% of small businesses have a website
Today, it seems that even pets have their own websites, but in practice, less than three-thirds of total businesses invest in one. Some believe that a website is irrelevant to them (i.e., small coffee stands); others lack funds to hire website developers. Of course, not having a website is a big mistake that seriously impedes your small business growth. Why? Check out the next point.
Most clients research a small business before their first purchase
Up to 80% of people who bought something online (or decided to visit a new local spot) researched the business before initiating contact. And, while social media presence can provide relevant info about a business, nothing builds more trust than a professionally-crafted website.
60+ percent of businesses invest in social media
Speaking of social media, it is, indeed, a very powerful tool for finding new clients and generating leads. Starting any social media account is free — unlike building a website. In the long run, though, social media also calls for investment — of time, money, or both. Over a half of small businesses understand that and readily invest in social media marketing. The ones that do not usually stay smaller than they’d like.
Nearly half of businesses spend up to $10,000 a year on marketing
Ten thousand dollars may seem a significant number, but, ultimately, it ensures steady business growth. The investment means may differ, though. 43% of small businesses hire professional marketers (in-house or remote), and 39% use marketing software tools. With enough funds, the combination of both is the best solution.
Over 80% of small businesses ignore content marketing
A website and social media accounts are important for small business promotion, but so is content marketing. Content does not necessarily refer to blog posts on your company website — at least, not alone. It is a much wider definition that includes unique social media updates, visuals & infographics, videos, etc. There is no universally best content type — the specifics will depend on the nature of your business. And since 80% percent of small businesses ignore this promotion opportunity, setting your content strategies straight will give your company a competitive edge.
Over half of businesses struggle with human resources
Recruiting the right people is a challenge for 56% of small businesses. 35% of business owners believe that recruiting staff was easier five years ago, and 24% — that it was easier ten years ago. In practice, finding the best talent is not much of a problem today if you use the right tools. Professional databases and contact finders can alleviate this struggle for you.
New businesses have a 70/30 male-female founder ratio
Most new businesses are opened by men, and less than a third — by women. Another curious stat is that out of these total 30% owned by women, 47% are founded by minorities.
Most business owners have no college degree
Facebook and Apple are not the only examples proving that a college degree is not always necessary to start a business (and a successful one at that). Most small business owners also have no degree — they are either dropouts or never applied at all. Another fun fact? 5% didn’t even finish high school.
With all of this said, it’s safe to assume that small business is accessible to everyone. Even though only half of the newly started companies survive the next five years, the odds are still not that bad. If you are passionate about what you plan to do, have a unique vision or an offer, and are ready to invest in the best human resources and marketing, your chances of success are already higher than 50/50.
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