10 Small Business Statistics You Need To Know

Written by Peter Keszegh

So much of the world is easily accessible today, thanks to technology. Technology has brought forth a digital revolution, streamlining millions of processes that would typically be tedious to do. Among millions of streamlined processes, one of the most popular ones is the rise of businesses in the digital market. Other than the experts and empires, small businesses have found their way into the online world and brought forth various kinds of products and services from various fields.

If you are thinking about starting your own business or want to work towards making an existing one bigger, then it is only suitable for you to be familiar with the dynamics of the small business market. Scroll down to see ten small business statistics that will aid you in your journey, plus some helpful tips and information to help you along.

Over 30 million small businesses in the USA

In the United States, a new economic boom for small businesses is evident; more people seem to be chasing after their dreams of business ownership. As of March 2023, more than 30 million small businesses operate in the United States, according to the Small Business Administration (SBA). Such a statistic is an indicator of positive opportunities within America for businesses that are meant to be started or increased.

Factors that feed the creation of small businesses

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    Access to Information: Thanks to technology, information accessibility is easier than it has ever been. Aspiring small business owners can acquire a multitude of resources just by tapping a few buttons in their devices. Such resources include online courses and webinars spearheaded by experts and business tycoons, feeding aspiring business owners with industry-specific knowledge.
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    Technological Advancements: Although technology drives businesses to newer heights, its accessibility has contributed to a leveled playing field for business owners. To the benefit of small business owners worldwide, technology has advanced to create affordable software and convenient e-commerce platforms.

The effect of small businesses

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    Work Culture Transformation: The typical 9-to-5 work day is slowly phasing out of the norm, with more people searching for flexibility and autonomy in their careers. This helps business owners lessen office costs and manage businesses in the comfort of their own homes.
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    Supportive Ecosystems: Because of the abundance of small businesses, governments, and private institutions have acknowledged them as drivers of economic growth. This leads to more opportunities for funding, networking, and mentorship to further boost the local economy and support entrepreneurs in the area at the same time.

99.9% of all businesses in the United States are small businesses

Small business employees in computers being part of statistics

Small businesses are a powerful force in today’s market, and given access to the right tools and opportunities, they can achieve anything. One of the most amazing small business statistics is that 99.9% of all businesses in the United States are small businesses, which makes them responsible for two-thirds of newly opened job opportunities in the entirety of America. This statistic highlights the power of small businesses when combined with support and technology.

The aftermath of the 99.9%

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    Job Creation: Small businesses are responsible for two-thirds of the entirety of the job openings in the United States. This is not just a figure; it's a reflection of their integral role in catalyzing economic growth. As small businesses expand, they often need to hire additional staff, directly reducing unemployment rates. This effect is not confined to their immediate vicinity; it ripples through the local economy, creating a positive impact that supports other businesses and services in the community.
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    Fueling Change: Small businesses are especially rich when it comes to fresh ideas. Their compact structure lets them pivot and try new things at a fast pace, making them breeding grounds for innovation. 
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    Nurturing Communities: Often, we overlook just how much small businesses do for community spirit. They're more than just storefronts and services; they're the heartbeat of local life. They knit together a strong sense of togetherness and identity by chipping in for community events, causes, and projects. This kind of grassroots involvement is key to creating places where everyone feels part of something bigger.

Small businesses are essential to economic stability and are catalysts for progress. Their ability to adapt, innovate, and create jobs makes them vital to any thriving economy. As an aspiring entrepreneur, understanding the significance of small businesses in driving economic growth can inspire and motivate you to embark on your entrepreneurial journey. Knowing that your efforts can contribute positively to both your community and the broader economy.

97% of customers read business responses to reviews

Getting the hang of small business statistics today is about embracing a simple online presence. Why? Well, consider this: 97% of customers bother to check out how businesses respond to reviews (according to BrightLocal). This means your business's future can be affected by how you respond to customer reviews. Therefore, nailing digital marketing and SEO strategies is vital for connecting with your audience the right way.

To navigate this digital landscape effectively, consider the following key insights:

  • Consumer Behavior Shift: Understanding small business statistics is synonymous with recognizing a fundamental shift in consumer behavior. Today, when individuals consider a purchase or require a service, their initial instinct leads them to a digital search. If your small business lacks a readily discoverable online presence, it runs the risk of remaining invisible to potential customers.
  • Enhanced Credibility: A robust digital presence is not just about being seen; it's about building credibility. An appealing, informative website, active social media profiles, and a collection of positive online reviews collectively instill trust and confidence in your brand. This trust is a valuable currency in the digital realm.
  • Competing for Visibility: Today’s world is more crowded than ever with pop-up ads and fast fashion; the saturation is due to every business trying to gain attention using digital marketing. So that you're noticed, one must optimize his online presence.
  • Precision in Marketing: Digital marketing offers the advantage of precision. It allows you to target specific demographics, interests, and geographic locations. This level of precision ensures that your marketing efforts reach the most relevant audience, increasing the likelihood of conversions.
  • Measurable Success: Unlike traditional marketing methods, digital marketing provides measurable results. You can track website traffic, click-through rates, and conversion rates. This data-driven approach empowers you to fine-tune your strategies for improved outcomes.

Almost 27% of small businesses are underfunded

Understanding how to become an entrepreneur also means grasping the challenges of small business financing, a critical aspect of entrepreneurial success. It's noteworthy that the process of securing a small business loan typically takes about six to eight weeks on average.

Additionally, nearly 27% of small businesses are unable to receive the funding they need, according to the National Small Business Administration (NSBA). This statistic highlights the importance of careful financial planning and exploring alternative funding options.

To overcome these financing challenges and embark on your entrepreneurial journey, consider the following insights:

  • Lengthy Financing Process: The traditional processes of applying and qualifying for loans can be a real obstacle, especially for small businesses requiring immediate funding for capital or better cash flow management.
  • Exploring Alternatives:  The traditional processes of applying and qualifying for loans can be a real obstacle, especially for small businesses requiring immediate funding for capital or better cash flow management.
  • Bootstrapping: Other entrepreneurs opt for an approach called bootstrapping, which involves using personal savings or earnings generated within the business. Although this method can be stressful, it avoids the need for outside financing and allows you greater ownership of your business.
  • Financial Literacy Matters: Understanding financial management and creating a well-structured business plan is essential for securing financing. Numerous organizations and resources exist to help entrepreneurs enhance their financial literacy.
  • Diversifying Revenue Streams: To be prepared for financial risks, business owners should focus on diversifying revenue streams, which can be developed through selling various products or services. Alternatively, business owners can also try targeting a different group of customers for services and products. This strategy ensures stability and diversifies income sources instead of only depending on one.

Despite difficulties in funding, entrepreneurs have to play their cards smartly when handling finances. It is essential to note that small business loans take about six to eight weeks on average to process, therefore advanced planning is needed. Foresight is an important asset for entrepreneurs to have when it comes to business. It ensures that they are prepared for any financial hurdle that will come their way, and are likely to have a back-up plan.

infographic with 10 small business statistics you need to know

90% of consumers read reviews before stopping by

Customer reviews can make or break a small business. A remarkable 90% of consumers read online reviews before visiting a business, as reported by Qualtrics. Positive reviews can boost your reputation, while negative ones can deter potential customers. Therefore, managing your online reputation is critical for success.

Understanding small business statistics also means grasping the challenges of small business financing, a critical aspect of entrepreneurial success. It's noteworthy that the process of securing a small business loan typically takes about six to eight weeks on average. Additionally, nearly 27% of businesses face difficulty obtaining the funding they require.

To overcome these financing challenges and embark on your entrepreneurial journey, consider the following insights:

  • Lengthy Financing Process: The protracted process of securing a traditional loan can pose a significant hurdle for small businesses, especially when they urgently need capital for growth, expansion, or managing cash flow.
  • Exploring Alternatives: In response to these challenges, many entrepreneurs explore alternative financing options such as crowdfunding, angel investors, venture capital, and peer-to-peer lending. These options often offer a faster and more flexible approach to funding.
  • Bootstrapping: Some entrepreneurs opt for a bootstrapping approach, relying on personal savings or revenue generated by the business itself. While this method can be challenging, it eliminates the need for external financing and provides greater control.
  • Financial Literacy Matters: Understanding financial management and creating a well-structured business plan is essential for securing financing. Numerous organizations and resources exist to help entrepreneurs enhance their financial literacy.
  • Diversifying Revenue Streams: To mitigate financial risks, consider diversifying your revenue streams. Exploring multiple product or service offerings or targeting different customer segments can provide stability and reduce dependence on a single income source.

The average cost per hire is $4,700

Small business employees conversing

Hiring and retaining top talent is essential for small businesses looking to grow. According to the Society for Human Resource Management (SHRM), the average cost per hire was nearly $4,700. This statistic underscores the importance of creating a positive work environment and investing in employee development.

Here are some key insights into the significance of employee retention:

  • High Costs of Employee Turnover: The employer will lose 50%-60% of an employee's annual income when replacing an employee. This could be due to recruitment, training, and hours on productivity operations as the shift occurs.
  • Workplace Culture: It will be greatly beneficial for a workplace to be filled with positive and encouraging energy. Such an environment fosters excellent work relationships and long-term employee satisfaction and retention.
  • Investing in Development: Employee development is an investment in your business. The higher the levels of education attained by your employees, the better they tend to be at their jobs. Thus, it improves skills, raises spirits, and promotes loyalty, which all add up to overall improvement.
  • Recognition and Reward: Acknowledging and rewarding employees for their contributions can enhance merits and encourage loyalty. A well-designed incentive program can be very effective at retaining core talent.
  • Work-Life Balance: It is becoming more important that employees are able to maintain a healthy work-life balance. Flexible work arrangements and promoting wellness are ways to make your business attractive to potential customers.

77% of small businesses use social media to reach customers

Social media is a real revolution. According to Forbes, 77% of small businesses use social media platforms like Facebook, Instagram, and Twitter to engage with clients. Here's why incorporating social media into your entrepreneurial journey is a strategic move:

  • Connecting with Your Audience: Social media platforms provide a direct communication channel to your target audience. Consistent and interesting content will result in relationship building, leading to a loyal customer community.
  • Brand Visibility: Increasing the regularity of your social media presence increases your brand’s visibility. Communicating with followers increases brand awareness, reaching a broader audience.
  • Cost-Effective Marketing: Social media marketing is cost-effective over traditional advertising. With a low budget, you can target a significant audience; thus, it is perfect for small businesses.
  • Analytics and Insights: Most social platforms include analytics tools that provide information on how your audience behaves. This data informs marketing strategies, allowing you to present relevant content that appeals to your followers.
  • Competitive Edge: A solid social media footprint allows you to stay ahead of the competition.

46% of Google searches are for local information

Local search engine optimization (SEO) is essential for small businesses serving a specific geographic area. Surprisingly, 46% of all Google searches are for local information, according to HubSpot. Optimizing your online presence for local SEO can significantly boost your visibility among local customers.

Here's a closer look at the impact of local SEO on your entrepreneurial journey:

  • Visibility Among Local Customers: Local SEO strategies ensure that your business appears prominently in local search results. This is essential for attracting customers in your vicinity who are actively seeking products or services like yours.
  • Google My Business (GMB): Claiming and optimizing your Google My Business listing is a fundamental step in local SEO. It provides essential information such as your address, phone number, hours of operation, and reviews directly in search results.
  • Local Keywords: Incorporating location-specific keywords in your website content, meta tags, and business listings helps Google associate your business with relevant local searches.
  • Online Reviews: Positive online reviews are a significant factor in local SEO rankings. Encouraging satisfied customers to leave reviews can boost your local search visibility.
  • Mobile Searches: With the increasing use of mobile devices, local SEO has become even more critical. People frequently use their smartphones to search for nearby businesses, making it imperative to optimize for mobile-friendly websites and local search.

12.9 million new jobs opened by small businesses

The business world is constantly evolving, and adaptability is key to survival. Small businesses that pivot and adapt to changing market conditions are more likely to thrive. Small businesses have generated 12.9 million net new jobs over the past 25 years, accounting for two out of every three jobs added to the economy, according to the Office of Advocacy of the United States Small Business Administration.

Here are key insights into why adaptability is vital for entrepreneurs:

  • Ever-Changing Landscape: The business landscape is in a constant state of flux. Economic conditions, consumer preferences, and technology evolve rapidly. Entrepreneurs who fail to adapt risk becoming irrelevant or obsolete.
  • Competitive Pressures: Your competitors are continually innovating and seeking ways to gain a competitive edge. Staying agile allows you to respond to these competitive pressures effectively.
  • Customer Expectations: As consumer expectations evolve, your products, services, and business practices must evolve as well. Adapting to meet changing customer needs ensures that your business remains relevant and attractive.
  • Market Disruptions: Unexpected market disruptions, such as economic downturns or global crises, can severely impact businesses. Being adaptable allows you to pivot and find new opportunities even in challenging times.
  • Learning and Growth: Embracing adaptability means you are open to learning and growth. You are willing to experiment, make mistakes, and continually improve your business.

80% of millennials prefer real-time feedback

Collaboration can open doors to new opportunities and growth. Small businesses that collaborate with other businesses or organizations can expand their reach and tap into new customer bases. Networking and building strategic partnerships are vital strategies for entrepreneurial success. A study by the Queens University of Charlotte says 80 percent of millennials would prefer real-time feedback over traditional performance reviews.

Here's a closer look at why collaboration is instrumental in your entrepreneurial journey:

  • Leveraging Expertise: Collaboration allows you to tap into the expertise of others. Whether it's partnering with industry experts, mentors, or consultants, you can benefit from their knowledge and experience.
  • Resource Sharing: Collaborative ventures often involve resource sharing, which can reduce costs and risks. Pooling resources with partners or other businesses can lead to more substantial and impactful initiatives.
  • Market Expansion: Partnering with complementary businesses or entering into strategic alliances can help you reach new customer segments and expand your market reach.
  • Innovation and Creativity: Collaborative environments foster innovation and creativity. Brainstorming sessions and diverse perspectives can lead to groundbreaking ideas and solutions.
  • Risk Mitigation: Sharing risks with collaborators can provide a safety net in case of setbacks or challenges. It's a way to distribute the burden and increase the likelihood of success.
  • Networking Opportunities: Collaborative efforts often involve networking with other entrepreneurs and industry players, which can lead to valuable connections and future opportunities.

Small businesses: An overview

Small businesses are the backbone of the worldwide economy, which is why thousands of entrepreneurs seek ways to grab a spot in the small business sector. Small businesses also contribute to lowering unemployment rates due to job creation. Additionally, small businesses feed innovation and economic growth all around the world.

A sneak peek of the small business effect

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    Job Creation: Small businesses profusely create job opportunities. Small businesses are responsible for generating a significant number of new jobs every year, lowering unemployment rates, and supporting local communities.
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    Economic Impact: Small businesses play an essential role in aiding the economy. Small businesses often serve as catalysts for the revitalization of communities.
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    Digital Transformation: The digital age has taken markets by storm, consequently affecting how businesses function. Businesses worldwide have embraced e-commerce and gotten familiar with digital marketing and technology to widen their reach and improve business efficiency.

Quick view of what you need to do

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    Foster a Strong Online Presence: A strong online presence is essential for small businesses since consumers are always turning to the internet to search for products and services they need. This is why investing in digital marketing and learning search engine optimization (SEO) is essential.
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    Stay Agile: Small businesses are required to move quickly and adapt to trends that rapidly change or fluctuate. The ability to respond to challenges and opportunities quickly is a necessary skill for long-term success.
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    Focus On Sustainability: Your small business putting an emphasis on sustainability not only helps the environment but also your brand. Small business statistics show that consumers are more likely to prefer sustainable and eco-friendly businesses.

Wrapping up

These small business statistics provide valuable insights into the world of entrepreneurship. So, if you're wondering how to become an entrepreneur and achieve real-world results for your small business, we invite you to Book a Free Consultation at DigitReboot. Let us help you craft strategies that attract attention and drive the growth and success you deserve. 

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