Introduction
Starting a small business can be one of the biggest and most rewarding challenges an entrepreneur can undertake in their professional life. But when it comes to succeeding in the small business world, entrepreneurs need to know some surprising facts before they take the leap. In this article, we will explore 15 small business facts that you need to know before starting your own business. These facts will provide an insight into the world of small business, and help you develop a comprehensive strategy to succeed in your venture.
1. Small business is big business
Small business generates over 50% of the GDP in the US and employs over half of the country’s workforce. This means that small businesses are critical to the success of the US economy.
2. Minority-owned businesses are thriving
Minority-owned businesses are on the rise in recent years. According to the US Census Bureau, there were over 124 million minority-owned businesses in the US in 2018, with an average annual revenue of $180,000.
3. The majority of small businesses are home-based
Over 50% of small businesses operate from home, with some estimates suggesting that number could be as high as 70%. This means that entrepreneurs can start their own business from the comfort of their own home.
4. The failure rate for small businesses is high
According to several studies, around 20% of small businesses fail in their first year, and around 50% fail in their fifth year. This highlights the importance of having a solid business plan in place before starting a small business.
5. Cash flow problems are a major cause of failure
One of the main reasons small businesses fail is due to cash flow problems. Entrepreneurs need to be vigilant when it comes to managing their finances, and ensure they have enough capital to sustain their business.
6. Social media is a powerful tool for small businesses
Over 90% of small businesses use social media to reach their target audience. Social media platforms like Facebook, Twitter, and Instagram can be instrumental in developing an online presence and engaging with customers.
7. Most small businesses rely on personal savings for funding
Most small businesses rely on personal savings or loans from friends and family for initial funding. This highlights the importance of prudent financial planning before starting a business.
8. Small businesses employ more people than large businesses
Small businesses employ more people than their larger counterparts. This means that small businesses have a vital role to play in creating jobs and supporting local economies.
9. Women entrepreneurs are on the rise
Women entrepreneurs have been increasing in recent years, with many women starting successful businesses in traditionally male-dominated industries.
10. Customer service is key to small business success
Providing excellent customer service is crucial to the success of small businesses. Customers are more likely to return and recommend a business that provides them with a positive experience.
11. Networking is essential for small businesses
Networking is an essential aspect of growing and expanding a small business. Developing relationships with other entrepreneurs, suppliers and customers can help businesses gain new opportunities and gain recognition in their market.
12. Technology is transforming small businesses
Technology has transformed the way small businesses operate. From online payment systems to cloud-based software, technology has helped small businesses streamline their operations and reach a wider audience.
13. Cybersecurity is a concern for small businesses
Cybersecurity is a growing concern for small businesses, as they are often targeted by cybercriminals. Investing in robust cybersecurity measures is essential for protecting sensitive information and ensuring business continuity.
14. Small businesses are the backbone of local communities
Small businesses play a vital role in supporting local communities. They provide essential goods and services, create jobs, and contribute to the growth and development of local economies.
15. Success takes time and dedication
Success in small business takes time and dedication. Entrepreneurs need to be committed to their venture, and willing to invest the necessary time, effort, and resources to achieve their goals.
Conclusion
Starting a small business can be both challenging and rewarding. Entrepreneurs need to be aware of the surprising facts surrounding small business, in order to make informed decisions and develop a comprehensive strategy for success. Whether it’s understanding the importance of cash flow management, embracing technology, or investing in customer service, these 15 small business facts provide valuable insights into the world of entrepreneurship. By applying the lessons learned from these facts, entrepreneurs can create thriving and successful small businesses that contribute to the growth and prosperity of their local communities.
