You don’t need an encyclopedic knowledge of small business statistics to succeed as an entrepreneur.
That said, knowing the right stats and strategizing with them in mind can give your business an advantage over your competitors.
In this post, you’ll learn what the numbers say you need to know about content marketing, email, and websites today — and why cybersecurity is something you can’t overlook, no matter how small your business!
Let’s get started.
Small Business in the United States
According to the U.S. Small Business Administration (SBA), a small business is one that has fewer than 500 employees. And right now, there are roughly 31.7 million small businesses in the United States, accounting for 99.9 percent of ALL businesses.
- About 5.2 million are minority-owned businesses;
- 25% are women-owned businesses;
- 50% are owned by entrepreneurs aged 50 and 88 years old;
- 2.5 million are owned by veterans of the armed forces;
- 50% are operated from home;
- 4.1 million are based in California, the state with the highest number of small businesses in the United States (followed by Texas, Florida, New York, and Illinois).
As for education, only 19% of small business owners have a Master’s Degree, and only 4% have a Ph.D. The largest percentage (33%) have only a high school diploma or GED, 29% have a Bachelor’s degree, and 18% have an Associate’s degree.
Small Business Employment
Small businesses employ 60.6 million people, accounting for nearly half (47.1%) of the entire U.S. workforce. The biggest employers, responsible for around 40% of total job growth, are firms with 1-49 employees.
Microbusinesses — small businesses with fewer than 10 employees — make up 75.3% of all private sector employers but (for obvious reasons) don’t provide as many jobs.
However, what they do provide to entrepreneurs is the opportunity to be your own boss.
The following statistics paint a clearer picture of startup capital and small business financing in the U.S.:
- 64% of small businesses start with only $10,000 in capital.
- The average microloan provided by the Small Business Administration is $13,000.
- The average small business loan, across all U.S. Banks, is $633,000.
- 39% of small businesses use cash to start their businesses.
- Most home-based microbusinesses can be started with $1,000 to $3,000.
Small Business Taxes and Legal Structures
While sole proprietorships account for 86.4% of nonemployer businesses, only 14.4% of small employer firms have this structure. Every business owner hopes to see growth, and the bigger you are, the more important it becomes to limit your personal liability.
To their credit, though, sole proprietorships consistently pay the lowest effective tax rate.
Small Business Revenue
The top businesses to start now are in technology, health, and energy. Technology is the industry leader, receiving 44.2% of venture capital investments, mainly because it includes sub-industries like fintech, health tech, and transportation tech.
Other industries in the lucrative top 10 are media, consumer retail, construction, hospitality, finance, real estate, and transportation.
Only 13.7% of small business owners earn an annual salary of $100,000 or more.
The average income for a small business owner, according to PayScale, is around $65,000 a year. Most small business owners earn between $26,000 and $153,000.
Small Business Survival
As for businesses that shut their doors, they have their reasons:
- 42% close because there’s no market need for their goods or services.
- 29% close because they run out of money.
- 23% close because they don’t have the right people running things.
- 19% close due to heavy competition.
- 17% fail because they don’t have a business model.
Digital Marketing for Small Businesses
Nearly half of all small businesses in the U.S. spend less than two hours a week on marketing efforts. You’re about to see why that’s not nearly enough.
Small Business Websites
One of the biggest mistakes small businesses make is to think they’re too small to bother with a website. 92% of business owners with websites see it as critical to their digital marketing strategy.
Nearly as many (89%) see an SEO-optimized website as essential to doing business.
With the impact of COVID-19, more than half of U.S. businesses say they’ve increased online interactions with their customers and clients.
Many have adapted by implementing strategies that (further) incentivize shopping online rather than in-person — including discount codes, free shipping, and new product bundles.
Digital User Experience
The quality of your website design is another thing that can help or hurt your business.
- 38% will bounce from a poorly designed website.
- 48% see website design as the #1 factor determining a brand’s credibility.
- 44% will abandon a website that doesn’t have contact info.
- Up to 90% of visitors judge your website solely by the colors you use.
Users need only 0.5 seconds to form an opinion about a website. Think about what you see in other company websites that either build or sabotage confidence in their brand.
Mobile Devices / Mobile Marketing
About two-thirds (67%) of smartphone users are more likely to make a purchase on a mobile-friendly site than on one that’s not mobile-optimized.
Nearly half of them (48%) feel alienated by businesses that don’t ensure their websites work well on smartphones — as if the company didn’t care about their business. Over half (57%) say they won’t recommend a business with a poorly designed mobile website.
E-Commerce and Online Shopping
The COVID-19 pandemic has pushed businesses to step up their game with eCommerce faster than ever. Experts even estimate that, by 2040, e-commerce will account for 95% of all purchases in the United States.
So, it makes sense to make the buying process as easy and intuitive as possible.
Since driving sales is the top marketing goal for at least 31% of small businesses in the U.S., it pays to know what works and what doesn’t, especially since the average shopping cart abandonment rate, according to Baymard Institute, is 68.81%.
One way to reduce the bounce rate is to give your customers more ways to pay.
Other conversion hacks to try:
- Free shipping
- Coupon codes
- Colors are known to boost conversion rates
- Testimonials from influencers or customers
- An abandoned cart email sequence
Start with a few trusted hacks and experiment with others until you find your sweet spot.
Social Media Marketing
Nearly two-thirds (64%) of all small businesses use social media in their content marketing strategy. And about three-quarters (73%) of marketers see their efforts to reach customers and clients through social media marketing as “somewhat effective” or “very effective.”
Over half (54%) of social browsers research products and companies on social media before making a purchase. Any customer’s experience with your business will determine (for at least 71% of consumers) whether they recommend your brand to friends and family.
That doesn’t even account for influencer recommendations on social media, which influence at least 49% of consumers.
Here again, mobile devices take the lead, with 91% of all social media users accessing their favorite channels on their smartphones and tablets.
Facebook still leads other social media platforms; over two-thirds (68%) of U.S. adults identifying as Facebook users. That said, if you know your ideal customers prefer other channels (Instagram, Twitter, Tumblr, etc.), that’s where you need to be.
Blogging and Content Marketing
Despite the amount spent on content marketing, only about a third (32%) of businesses have a documented content marketing strategy.
Make this a priority, and you’ll have an edge over two-thirds of American businesses.
Companies in the U.S. allocate about 32% of their marketing budget to content marketing. Many of them also rely on personalized ads for website revenue.
Thanks to ad blockers, companies nationwide have seen nearly a $22 billion total loss in advertising revenue.
Banner ads, too, are statistically more likely to annoy visitors than to convert; 54% of users actively avoid them.
As for the creation of the content itself, statistics show daily blogging is 25% more effective than blogging on a monthly basis.
Search Engine Marketing: SEO and PPC
With Google now processing over 40,000 search queries every second (on average), the more effectively you optimize your content for search engines, the more likely your content is to land on the first page of someone’s search results.
There’s more to SEO than knowing which keywords to use; frequency, placement, and context matter, too.
Google knows when you’re just throwing popular keywords in there like confetti.
With over 3.5 billion searches per day, it’s in your company’s best interests to make Google happy. It may not be the only search engine on the scene, but it dominates the field.
Sponsored PPC (pay-per-click) ads are another way you can steer browsers toward your company’s website. Google AdWords, in particular, pays an average of $3 for every $1.60 a business spends.
So, even though two-thirds of all emails are ignored (i.e., never opened), and only 3.26% of email recipients click through or follow through on the call to action, companies that invest in email marketing still see, on average, a 4,300% return.
For every $1 you invest in email marketing, you can expect to see an average return of $42.
After all, most customers prefer to interact with brands and businesses through email than through other communication channels (including social media and text messages).
For the same reason, B2B marketers point to email as their top revenue-generating tool.
The COVID-19 pandemic has made video marketing even more important, with 91% of marketers using it to establish their brands and connect with customers from a distance.
If you’re still on the fence, take the following statistics on video marketing as a gentle nudge:
- Viewers watch over 500 million hours of video on YouTube alone every day.
- 69% of website visitors prefer video to text as a source of information.
- Using video on your site’s landing page can boost conversion by 88%.
- Videos get shared 1,200% more than text and links combined.
- Embedded videos in websites can increase traffic by up to 55%.
- 81% of online shoppers have been persuaded to buy something by a brand’s video.
- The word “video” in an email subject line boosts open rates by 19%.
And finally, companies who use videos in their content marketing grow their revenue 49% faster, year after year, than those who don’t.
Cybersecurity for Small Businesses
Half of all small and midsize businesses suffered at least one cyberattack in the last twelve months, according to Keeper Security’s “The State of SMB Cybersecurity” report. And 43% of cyber attacks actually target small businesses.
Once hacked, small businesses are also less likely to survive the cost. In fact, 60% of businesses close their doors within six months of being hacked.
Check out the following sites for helpful tips on how to protect your business:
- Federal Communications Commission: “Cybersecurity for Small Business”
- U.S. Small Business Administration (SBA): “Stay Safe from Cybersecurity Threats”
- Federal Trade Commission: “Cybersecurity for Small Business”
- NIST.gov: “Small Business Cybersecurity Corner”
- Entrepreneur: “4 Easy Ways to Protect Your Company from a Cyber Attack”
Since malicious intent is behind nearly half (48%) of all data security breaches, prioritizing cybersecurity is the best way to protect your data and that of your customers.
Reasons to Start a Small Business
You have your own reasons for starting a business. But are you ever curious as to how many others share your number one reason?
According to a survey by Guidant Financial and the Small Business Trends Alliance (SBTA)…
- For 29%, the biggest motivation is autonomy (being your own boss).
- 17% are dissatisfied with corporate America.
- 16% start a business to pursue their passion
- For 12%, an opportunity presents itself, and they take it.
- 9% seize upon an inspiration to start a new business.
- 7% start a business because they’re not ready to retire.
- Another 7% are laid off or lose a job to outsourcing.
Primary Challenges for Small Business Owners
The greatest challenge for 23% of small business owners is the lack of capital or cash flow.
The second most common struggle (for 19% of survey respondents) is the recruitment and retention of quality employees.
Which of These Small Business Statistics Had the Biggest Impact on You?
Now that you have a clearer picture of the landscape for small business owners in the United States, how will you apply what you’ve learned to give your new enterprise its best chance?
The actions you take can help with the following important goals:
- Get clear on why you want to start a business
- Identify your entrepreneurial superpower and make it work for you.
- Learn more about how you can build a stand-out website
- Learn what it takes to build an addictive video presence
- Get the ball rolling with our 3-step strategic planning process
Which one of these will you tackle today?
Applications for our Momentum program open for 10 days only! Apply before May 7th at 11:59pm PT. Our team of expert concierge coaches are standing by to help you build massive momentum in your business in 2021 and beyond. Since 2015 we’ve worked closely with hundreds of students in our Momentum program who all wanted the deepest possible support to avoid the usual mistakes and accelerate their entrepreneurial journey. Will you be next? https://liveyourmessage.com/momentum