From income to success rates, there many myths surrounding business ownership that can either needlessly discourage you from hanging your shingle or prompt you to plunge headlong into a venture without evaluating the risks.
Separate fact from fiction and launch your business with confidence by referencing these ten small business ownership statistics.
Corporations outearn but don't outnumber small businesses. From coffee shops to corner bakeries, there are roughly 30.2 million small businesses in America, says the Small Business Administration. That amounts to 99.9 percent of all U.S. businesses!
Small businesses collectively represent one of the largest employers in the country, employing around 58.9 million people. That amounts to 47.5 percent of the private workforce, or nearly one in two people you know, according to Statistics of U.S. Business. Health care and social assistance represented the industries with the highest small business employment. They employed a collective 8,687,568 people at small businesses in 2015.
Think entrepreneurship is a young man's game? Think again. Small business ownership statistics from Experian tell us that American small business owners are 50.3 years old, on average. Entrepreneurs in the construction industry are the youngest, at 48.3 years, on average. Financial, insurance and real estate professionals are the oldest, at 54.1 years.
Not all entrepreneurs are struggling financially, but nor are they all high rollers. The median income for people self-employed at their own incorporated businesses was $50,347 in 2016, according to the American Community Survey. Those self-employed at their own unincorporated businesses pulled in $23,060.
According to Experian, 40.2 percent of small business owners are based in the Eastern time zone. Another 29.9 and 22.2 percent are based in the Central and Pacific time zones, respectively. The Mountain time zone was home to only 7 percent of small business owners.
As our nation has grown more diverse, so too has the self-employed workforce. There are now roughly 8 million minority-owned small businesses in the country, according to small business ownership statistics from the SBA. Similarly, women-owned businesses have grown by 114 percent over the past 20 years. That's over twice the national growth rate of 44 percent for U.S. businesses.
Sure, larger small businesses have more financial and human resources to grow their workforce. But employment gains have been the highest among smaller small businesses. Businesses employing fewer than 20 people added roughly 1.1 million net jobs, according to 2015 data. Ventures with 100 to 499 people added 387,874 jobs, which represented the business size category with the smallest gains.
Only 50.2 percent of the businesses that opened in 2012 stuck around five years later. First-year survival rates were more promising. About 79.8 percent of businesses opened in 2016 were still running a year later, according to BLS data.
Small businesses represent major players on the world stage. Roughly 294,834 businesses exported goods from the U.S. But of these, 287,835, or 97.6 percent, were small businesses. According to small business ownership statistics from the International Trade Association, small businesses were responsible for 32.9 percent of America's $1.3 trillion in total exports in 2015.
Do your non-entrepreneurial friends and family members call you their resident I.T. expert? Chances are that it's a label you wear proudly. According to Experian, small business owners are 30 percent more interested in PCs and the web than the general population. You probably don't have the same aversion to email that others do, either. Small business owners are 54 percent more likely to be receptive to email than the rest of the population.