Small Business Facts – AKA: Stuff You Should Know About Small Business.
#1 – Did you know that almost 50% of GDP (Gross Domestic Product) comes from Small Business? That’s right. Nearly half of everything made and sold in the United States comes from small business.
#2: Nearly half of all small business fail in their first year. 95% fail in the first five years, and most of the remaining 5% fail over the next few years. These facts can be found on the SBA website – What you can’t find on the SBA website comes from our years as small business consultants – of the 1% who don’t fail outright, 75% of those who remain never make much money.
#3: Franchises are an exception to the rule – 96% of franchises are still around after that first year. What should that tell you? That knowing HOW to run a small business is more important than nearly anything else. Because that is what franchises do – show you precisely how to succeed using their business model. In 2020, 46% of consumers said they were more likely to shop at a small business.
#4: 53% of people agree that shopping at local small business gives back to their communities and impacts their shopping habits
#5: Consumers have indicated in some studies that they will choose small businesses ninety percent of the time as long as it is convenient
#6: Almost three quarters of consumers look for ways to support small businesses
#7: 70% of startup businesses begin in the home of the owner
#8: From our personal consulting experience, almost ZERO small business owners have, use, or can understand financial statements in their decision making. Does this make for good small business facts? From our experience, yes it is.
#9: 58% of startup companies have less than $25,000 cash on hand to begin their businesses. This is a problem because the #1 thing that kills small businesses, is lack of operating capital. Pro Tip – If you manage to secure an SBA Loan – DO NOT spend it all on building out you space. Make sure you’ve got at least one year of operating capital in the bank before you launch if you can.
#10: Surviving Until Year Three – If you can make it to your third year in business somehow, you should start making it around the third year mark. If you can make it to year five, you should really start making good money at that point, It either of these is not happening, you are doing something wrong.
#11: Small Business Owners are often introverts and are good at some craft, but are terrible at sales, marketing, and networking. Guess what you MUST HAVE to be successful as a small business? Sales. How do you get sales? Networking and Marketing. If I were to suggest anything to anyone starting a small business, it would be to invest everything you can in learning how to network, market yourself, and close sales in whatever manner is agreeable to you.
#12: If you build it – they will come! Nonsense! If you build it and don’t market yourself well, nobody will come and you will go broke, and watch your dreams go up in a cloud of smoke.
#13: Very few entrepreneurs make it on their first try. Most successful entrepreneurs have had multiple catastrophic failures – and then they succeeded using what they learned from their failures. This might seem tough, but so is working your way up through a company working for someone else for twenty years. Just look at it the same way. It is literally part of the job description if you truly want entrepreneurship to be your occupation.
#14: When it seems like others are defying all of these rules – they are usually living on and/or spending someone else’s money. Parents. Inheritance. Rich spouse. Trust Fund. SBA loans. But trust me – very few exceptions to the rules exist. It isn’t that they are winning as a small business, the “other money” just hasn’t run out yet. But it will. Sooner or later.
#15: If you have read this far, and you are excited rather than scared. If you think you can endure and push through, and learn what it takes to become the real deal, then maybe this small business thing is for you. And if you’ve had several major melt-downs: good. Chances are you are learning some things that will pay off later in ways you can’t imagine if you persist.
Tim VanDerKamp is co-owner of Stay Wild Digital Marketing, We specialize in website design Salt Lake City. We design websites and ecommerce websites in WordPress and Shopify. We are serial entrepreneurs ourselves. We have been there, and now we help those who are in the mix succeed through digital marketing.
Please contact us: firstname.lastname@example.org