May is Small Business Month, which is a tribute founded by the Small Business Administration to call attention to the hard work and dedication for what is arguably the backbone of our country’s economy. According to a 2020 study by the SBA, there are 31.7 million small businesses in the United States. It’s no secret that they are hard-working, innovative and creative, and they keep the American Dream alive.
Small businesses in the United States economy
The term ‘small business’ may actually be a lot larger than you realize. The U.S. Census Bureau defines small business by two factors: total income and employment numbers. For example, according to the SBA definition, a roofing contractor is defined as a small business if it has annual revenues of $16.5 million or less. With these definitions, small businesses comprise 99.9% of all US businesses and represent the majority.
The facts are proof that small business is here to stay:
Small businesses create 1.5 million jobs per year.
Small businesses account for 99.9% of all U.S. businesses.
It only takes six days to start a business in the U.S.
Nearly half of US employees work for a small business
Small businesses have added over 12.9 million jobs in the last 25 years
Although even a multi-million dollar company can still be considered a small business, 27.1 million companies are run by a single owner and have no employees. While most small businesses have no employees at all (run as a sole proprietorship), 16% of small businesses have between one and 19 employees.
Small business facts and challenges
Facts don’t lie: Only 50% of small businesses survive for the first five years. There’s a variety of reasons for that, not least of which is the sheer force of economic pressure from expenses such as taxes, upkeep, insurance, payroll, material costs, inventory, and more.
Another focus of Small Business Month is encouraging people to do business with these companies and supporting this huge part of our economy. It’s a win/win, because this money tends to stay in the community.
Small business support is available - you don’t have to do it alone
If you’re a part of the huge number of small business owners working hard to stay in the game, you will need some help along the way. As exciting as it is to be your own boss and run your own business, it can sometimes feel like you have to do it all alone - which is why reaching out for support is so important. Support is available - and it can make running your company much more manageable and scalable. If you’re looking for a virtual CFO to help with bookkeeping and financial analysis to help you organize your business finances, reach out to me anytime.