It’s no secret – here at Heeren Content & Strategy, we love small businesses and the entrepreneurs behind them. They create jobs, they build communities, and they bolster the national economy. For National Small Business Week, we’d like to raise awareness about the state of small business in United States.
Small business in the United States is defined as a business with fewer than 500 employees. Businesses in this demographic make up 99.7% of all businesses in the country today.
Small business plays a major role in the U.S. economy. According to the Small Business Administration, small businesses employ 56.8 million people, or 48% of the private workforce.
Starting a business is a risky endeavor. According to a U.S. Bank study, 82% of businesses that fail do so because of cash flow issues. Setting a process for managing your cash flow month-to-month is vital to your success as a business. Hiring a bookkeeper or managing the timing of your revenue and bill payments will help to keep you from failing due to cash flow issues.
According to a survey by the National Small Business Association, small business owners ranked economic uncertainty, the cost of health insurance benefits, and regulatory burdens as significant challenges to small business growth.
Despite these challenges, 75% say that they are confident in their own business. This is an improvement from 2014.
According to the Small Business Administration, the average small business goes through about $10,000 in startup capital. About 12% of businesses use no startup capital at all.
Where is this capital coming from? About 75% of the capital comes from banks through business and personal loans, credit cards, and lines of credit. Outside equity, like angel investment, accounts for only 6% of small business financing.
Many people have this perception that the concept of small business owners becoming independently wealthy is the rule. This is surprisingly not true.
While many small business owners may gain wealth through other investments, the median income for individuals who were self-employed by their own incorporated businesses was $49,204 in 2014. Individuals who were self-employed in their own unincorporated firms reported earning $22,209 in a year.
What do you wish more people knew about starting a small business?