4 Amazing Facts You Should Know about Small Businesses

What is the definition of a small business?

In fact, there is no uniform standard for the number of employees in a small business. In the European Union, any business that has fewer than 50 employees is considered a small business. For comparison, a company with fewer than 500 employees is defined as a small business in the U.S. and in Australia, a firm with fewer than 15 employees is regarded as a small business.

How do small businesses survive from the epidemic

Small businesses are indispensable to the growth of global economy. How much do you know about small businesses?

There are 4 extraordinary facts you need to know about small businesses.

1. 99.9% of American Businesses are Small Businesses

The latest statistics of the Small Business Administration(SBA) show that in 2021, the US has 32.5 million small businesses, accounting for 99.9 percent of all US business. Among them, there are 23 million businesses with fewer than 20 employees.

2. 31% of US Small Businesses Were Non-Operational in 2020

COVID-19 makes it very hard for small businesses to run smoothly in recent years, and some of them have to shut down. Especially in March 2020, there were over 70% of American small businesses were non-operational in order to prevent the spread of the epidemic.

3. Over 20% of Small Businesses Fail in the very First Year

2021 Bureau of Labor Statistics show that more than 20% of small businesses fail in the very first year. And about 50% of small firms go to failure within the first five years, which is terrifying, isn’t it? But more than half of small companies succeed and last for over 5 years; moreover, some of them have become large companies.

4. A Lack of Market Demand and Cash are Top 2 Reasons of Small Businesses’ Failure

42% of small businesses fail due to the shortage of market demand, and 29% of small businesses are reported to fail because of lack of cash. There are also other reasons why small firms come to failure, such as competitor suppression, major decision mistakes, lack of high-quality labor.

Despite the high failure rate of small businesses, many people are eager to start a business to become a boss rather than being an employee. Which do you prefer? A boss or an employee?

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