Small business statistics of 2022 that you must know

There was much talk about big tech companies and large corporations in the past few weeks in the US. Although not much is spoken about small businesses, they are the backbone of the country’s economy. Did you know that a majority of jobs in America are created by small businesses?

Small businesses are great sources of innovation, economic growth, and national prosperity. Let’s take a look at what the latest statistics unveil about them.

What are employment statistics like for small businesses in the US?

Do you work for a small business? Then you might be included in these stats.

1.?????There are 33.2 million small businesses in America

And a whopping 99.9% of businesses across the US are small businesses! It’s surprising how we don’t talk about small businesses as much as we do about large corporations.

2.?????46.4% of all American workers work for small businesses

That’s nearly half of the US workforce. Small businesses provide employment for 61.7 million workers. However, more than 80% of small businesses don’t have employees.

3.?????8 out of 10 small businesses don’t employ workers

27.1 million of small businesses across America are run by a single owner and have no employees.

4.?????16% of small businesses employ 1 – 19 workers

And around 650,003 small businesses have between 20 and 499 employees.

5.?????Over the last 25 years, small businesses have created 12.9 million jobs

This is about two-thirds of the new jobs added to the US economy in the given timeframe. This has created a large number of employment opportunities for a massive amount of people over the years.

Who owns small businesses?

Which generation do you think is more entrepreneurial?

6.?????Only 7% of small businesses in America are owned by millennials

Surprising, isn’t it? Gen Z owns even lesser, with only 1% of small business ownership. Boomers and Gen X own the majority of US small businesses.

7.?????Females own only 43.2% of small businesses

Males own more small businesses, but the gap is narrowing by the day. 19.4% of small businesses are owned by racial minorities. Veterans only own a mere 6.4% of small businesses in America.

What are the biggest costs for small businesses?

Let’s see what comprises the bulk of spending for small businesses.

8.?????70% of the spending of small businesses goes to labor

No wonder employers always try to save money during a crisis by reducing labor costs. Layoffs, outsourcing talent, and automating processes are the best ways for you to curb the labor expenses of your small business.

9.?????17 – 25% of a small business’s budget goes to inventory

Inventory ends up equating to revenue as your business grows, but it is a huge expense as soon as you start the race.

How many small businesses failed?

There are many reasons why small businesses fail.

10.?42% of small businesses fail due to the lack of market demand

That’s nearly half of them! If you are planning to launch a small business in the coming year, do thorough research to obtain proof of market before you dive in headfirst.

11.?38% of small businesses fail because they run out of capital

This is the second-most reason small businesses fail. It’s an expensive task to start and run a small business for the first couple of years. You should have a stash of funds ready to cover operating expenses for a few years until you start making profits.

12.?Which industries experience the highest failure rate?

The failure rate for small businesses in the professional, scientific, and technical services industry is the highest at 19.4% in the first year.?