5 surprising statistics about small businesses

If you're a business owner, or aspiring to be one, it's important to do your research before taking the plunge. What are the major risks? How can you learn from other businesses' mistakes? And what's the right way to go about getting started? There is plenty of anecdotal information out there, but when it comes to your money, you want to stick with hard evidence and facts. The following are five statistics about small businesses that may surprise you.

1. 83% of small businesses are funded from savings accounts, loans from family and friends, and credit cards, Forbes shared. So if you're saving up, making ends meet, and looking to start your business through the means of personal finance, you're far from alone.
2. 47.1% of the private workforce in the U.S., or 60.6 million people, is employed by small businesses, per the U.S. Small Business Administration (SBA). By growing your small business, you're potentially creating even more jobs for people.
3. About 24% of firms are home-based, the SBA also shared. Data collected pre-pandemic showed that nearly a quarter of self-employed people were working out of their home, without an office or brick-and-mortar. As the business ages, the likelihood of being home-based decreases. So while you may start at home, you might grow into a separate space if that's your ultimate goal.
4. 20% of small businesses fail in the first year, according to Entrepreneur. The percentage grows as the years go on, with at least 70% failing by the time the business turns 10. The mark of "failure," however, means the business no longer exists, so it could be for any number of reasons. Of course, there are outside forces that can contribute to a business' failure, like the Covid-19 pandemic.
5. 60% of small businesses that closed during the coronavirus pandemic will unfortunately not reopen, CNN Business shared. Most of them are restaurants. The lesson here is that sometimes there are obstacles that are beyond your control as a business owner, unpredictable events that seem unfathomable can occur. It doesn't matter how great the product was, how popular the restaurant, or how happy the customers were. There is inherent risk whenever you start a business. This may sound discouraging, but it's not meant to. It's simply a part of the role.

By employing great legal representation as your company evolves, you can make sure your business is part of the positive statistics. Get in touch with the professionals at the Law Offices of Donald W. Hudspeth, P.C., to learn more about how to set yourself up for success.

Categorised in: Starting a Business in Arizona

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