You hear anecdotally that small business is booming in America, but what does the data say? At the 2016 Smart Hustle Conference, Gene Marks of The Marks Group shared a special presentation on the state of small business. You can get a taste of his presentation by clicking the Play button below, but read on as we share 7 statistics that reveal the current state of small business in America.
7 Statistics That Show How US Small Business Is Booming
To give some context to these statistics, we should mention that the Small Business Association defines a “small business” as having less than 500 employees. However, there are 28 million small businesses in the U.S., and 98 percent of them have less than 20 employees. Here is what we know about them.
1. 120 million people work for a small business, which is over 50 percent of the working population. (Source: SBA, U.S. Census)
2. Since 1990, small businesses have added 8 million new jobs to the economy while large businesses have lost 4 million jobs because of outsourcing, moving overseas, and technology. (Source: SBA, U.S. Census)
3. Since 1995, small businesses have generated 65 percent of all net new jobs created. (Source: SBA, U.S. Census)
4. In 2015, businesses with less than $5 million in annual revenue experienced an average of 7.8 percent annual sales growth. That is up almost a full percent from 2014. (Source: Sageworks analysis)
5. Net profit margins improved for small businesses to 7.5 percent in 2015, which is up from 6.4 percent in 2014. (Source: Sageworks analysis)
6. At the beginning of 2016, a Wells Fargo survey of 600 small businesses found that two-thirds of small business owners said their financial situation is good and 71 percent said they expect their company to be in good financial shape this year.
7. The CAN Capital Small Business Health Index indicates that this optimism remained strong throughout 2016, finding that in August 2016, 64 percent of business owners were expecting growth in the next 12 months.
There are many factors that contribute to the favorable small business climate right now, including low interest and inflation, more permanent tax incentives, affordability of technology, low energy prices, and the availability of capital and resources. Take advantage of these and other factors! 2017 is proving to be an amazing year for American small business.