19 Small Business Statistics Every Business Owner Should Know

Are you ready to step into entrepreneurship and start a small business? Understanding the landscape and being aware of key statistics can provide valuable insights to help you make informed decisions.

In this article, we'll explore 19 essential statistics that every small business owner should be aware of.

As we already know, starting and running a small business is a challenging yet rewarding endeavor. 

Here’s a deep look at the statistics you need to know.

This article contains a collection of statistics gotten from various sources on and put together by Tyms, the leading accounting software solution for businesses. 

Top Business Statistics

• 42% of startups fail because there is no market need for their products or services
• Research indicates that 87% of consumers read online reviews before making a purchase
• 36% of small businesses do not have a website, limiting their reach and growth potential
• 43% of cyber attacks target small businesses
• Approximately 20% of new businesses fail during the first two years
• Approximately 45% of new businesses fail during the first five years
• Approximately 65% of new businesses fail during the first 10 years 
• Approximately 27% of small business owners cite the inability to secure funding as a major obstacle
• Companies with diverse teams are 33% more likely to outperform their competitors
• Companies that prioritize sustainability initiatives are 50% more likely to attract and retain customers

1. Small Business Survival Rate

Starting with perhaps the most crucial statistic for entrepreneurs, the survival rate of small businesses can be daunting. Approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. But with careful planning strategy and effective management, there’s a high possibility of maneuvering successfully.

2. Reasons for Small Business Failure

82% of small businesses fail due to poor cash flow management. 42% of startups fail because there is no market need for their products or services. Also, 29% of startups run out of cash before they can get their business off the ground. By addressing these factors proactively, businesses can increase their chances of success.

3. Small Business Financing Challenges

Access to financing remains a significant challenge for small businesses. Approximately 27% of small business owners cite the inability to secure funding as a major obstacle. Exploring alternative financing options and maintaining a robust financial strategy are crucial in overcoming this challenge.

4. Importance of Digital Presence

In today's digital age, establishing a strong online presence is essential for small businesses. Statistics reveal that 36% of small businesses do not have a website, limiting their reach and growth potential. Investing in digital marketing and e-commerce capabilities can enhance visibility and customer engagement.

5. Small Business Cybersecurity Concerns

Cybersecurity threats pose a growing risk to small businesses. 43% of cyber attacks target small businesses. Implementing robust cybersecurity measures, including data encryption and employee training, is imperative to safeguard sensitive information and maintain trust with customers.

6. Small Business Diversity and Inclusion

Diversity and inclusion initiatives are gaining traction among small businesses. Companies with diverse teams are 33% more likely to outperform their competitors. Embracing diversity not only enhances innovation and creativity but also fosters a positive workplace culture.

7. Small Business Marketing Effectiveness

Effective marketing strategies are essential for small businesses to attract and retain customers. Remarkably, 50% of small businesses allocate less than $300 per month to marketing efforts. Leveraging cost-effective digital marketing channels, such as social media and email campaigns, can yield significant returns on investment.

8. Impact of Customer Reviews

Customer reviews can significantly influence purchasing decisions. Research shows that 87% of consumers read online reviews before making a purchase. Maintaining a good reputation through exceptional customer service and proactive reputation management can enhance credibility and customer loyalty.

9. Small Business Exporting Opportunities

Expanding into international markets presents lucrative opportunities for small businesses. However, only 1% of U.S. small businesses export their products or services according to research.  

10. Small Business Technological Adoption

Adopting innovative technologies can drive efficiency and competitiveness for small businesses. 45% of small businesses still use outdated technology. Embracing cloud computing, automation tools, and analytics can streamline operations and empower growth in a digital-first era.

11. Small Business Customer Retention Statistics

Customer retention is paramount to sustaining long-term business success. Statistics reveal that increasing customer retention rates by 5% can boost profits by 25% to 95%. 

12. Small Business Regulatory Compliance

Navigating regulatory requirements is a critical aspect of small business operations. Regulatory compliance costs U.S. small businesses $83,000 on average annually. Staying informed about industry-specific regulations and investing in compliance management solutions can mitigate legal risks and ensure business continuity.

13. Small Business Entrepreneurial Spirit

Entrepreneurship continues to thrive globally, driven by innovative ideas and entrepreneurial spirit. Approximately 582 million entrepreneurs were actively involved in starting or running businesses in 2020. Nurturing creativity and resilience among aspiring entrepreneurs can stimulate economic growth and societal progress.

14. Small Business Workplace Flexibility

Workplace flexibility is increasingly valued among small businesses and employees alike. 77% of small business owners believe offering flexible work arrangements enhances productivity and employee satisfaction. Also, adopting remote work options and flexible scheduling can attract top talent and promote work-life balance.

15. Small Business Sustainability Initiatives

Environmental sustainability is gaining prominence among small businesses. Companies that prioritize sustainability initiatives are 50% more likely to attract and retain customers. 

16. Impact of COVID-19 on Small Businesses

The COVID-19 pandemic had a profound impact on small businesses worldwide. In the US, 31% of small business owners reported temporarily closing their businesses in response to the pandemic. Understanding these impacts can inform strategies for resilience and recovery.

17. Small Business Future Outlook

Looking ahead, small businesses are poised to play a pivotal role in global economic recovery and innovation. Despite challenges, 81% of small business owners are optimistic about the future. Embracing digital transformation, fostering agility, and nurturing a resilient organizational culture is key to thriving in an ever-evolving marketplace.

18. Small Business Employment Trends

Small businesses are major contributors to employment globally. In the United States alone, small businesses have generated 65% of net new jobs since 2000. This statistic emphasizes their role in fostering economic stability and reducing unemployment rates. 

19. Small Business Importance to the Economy

Small businesses play a vital role in the economy. They account for 99.9% of all businesses in the United States, employing over 47.3% of the private workforce. 

Conclusion

These statistics serve as a powerful tool for empowering small business owners. They shed light on the realities of running a small business and provide actionable insights that can be used to enhance business operations. 

By leveraging data-driven insights and adopting proactive strategies, small business owners can make informed decisions to navigate challenges and increase their chances of success.