Small Business Statistics: Facts, Numbers, and Recommendations 2024

Running a business takes work, and in a grim economic situation, it seems even harder! That’s why we should check small business statistics frequently to figure out what direction we should take and let numbers tell us about the future. Let’s see!

It takes a lot of deduction to bring success to your business, but in the face of all challenges, small and medium businesses are integral to economic growth. According to recent official reports, SMEs (small and medium-sized enterprises) in the UK totalled 5.5 million— 99% of these companies have between 0-249 employees. Additionally, there are more than 33.2 million small companies in America where around half of the American workforce works! So that makes up about all (actually 99.9%) US businesses.

And these figures are only going up. 

So, why not start your new business? Or maybe you’re curious about this massive segment of the global economy and need to know some significant numbers and facts.

Anyway, we’ve you covered!

If you’re looking for more information on what you should do to start and grow your small business, make sure to check our complete guides and expert interviews:

• Starting an Online Business with Louise Houliston
• How Can Business Startup Support Help You?
• Where to Find Startup Business Help? Small Business Development with Rosemary Morrison

Before we analyse the important trends, let’s define what is considered a small business. 

A small business is any organisation that has fewer than 500 employing staff, as defined by the US Small Business Administration. That means many highly valued startups in America fit this definition of small enterprises.  

Moreover, some small businesses need help to reach the revenue limits established by specialised firms such as North American Industry Classification System.

For instance, a company of real estate agents that makes more than £10 million doesn’t meet the criteria of a small business even if they have fewer than 500 employees. However, this definition can be broader than that. It’s worth noting that an SME in the UK is an organisation that has 250 employees or fewer and a turnover of £44 million or fewer or a balance sheet total of £83 million or less.

If you’re still unsure whether your business can be classified as small, you can check the official small business action plan on GOV. UK’s website. 

Indeed, the definition varies across the globe. In the EU, for example, it seems slightly smaller. Any business with 50 or fewer employees is considered a small business. However, the story doesn’t end there. Small business concepts in Australia differ a lot! A small business in Australia is any company with fewer than 15 people.    

So, it’s not just about the number of employees. It also reflects how the small business’s market share and value vary from country to country.

The Highlights of Small Business Statistics You Need to Know

• There are approximately 400 million SMEs globally. (National Action Plans on Business and Human Rights)
• 74% of small businesses only hire the owner(s). (GOV.UK)
• The most significant number of SMEs in the UK (nearly 914,000 or 17%) went to the construction sector. (GOV.UK)
• Total SME employment was around 16.4 million (61%), whilst turnover accounted for £2.1 trillion (51%). (GOV.UK)
• In Northern Ireland, roughly 90%, or nearly 70,000 enterprises, had ten workers or fewer. (Department for the Economy)
• 45%, or about 35,000, of Northern Ireland’s businesses had annual revenues of less than £100,000 in 2010, while 10% had revenues of above £1 million. (Department for the Economy)
• 56% of all enterprises were in the service sector in Northern Ireland, and this share increased by approximately 1.5% from the previous year. (Department for the Economy)
• Accommodation and food-based businesses showed the largest increase last year (225 businesses repeating 5%). (Department for the Economy)
• Over eight out of ten businesses in the United States are sole proprietorships, with their owner doing all necessary functions. This amounts to roughly 27.1 million companies. (US Small Business Administration Office of Advocacy)
• The average salary for employees in small businesses is nearly £43,000 compared to £41 at large companies. (US Small Business Administration Office of Advocacy)
• Just 16% of small businesses have everything between 1-19 employees, and only 650 small businesses have 20-499 workers in the US. (US Small Business Administration Office of Advocacy) 

Global Business Statistics

To have a comprehensive picture of what’s happening in the business world, you need to check out business statistics frequently. Trust me; it reveals a lot!

If you want to do a competitive analysis or even just review the present status of the firm, statistics provide an accurate technique to assess, predict, and evaluate the environment.

That’s how you can build a market future for your company or yourself. Much fascinating information of interest to business owners and entrepreneurs follows. 

Around 400 Million Small Businesses can Be Found Worldwide

(National Action Plans on Business and Human Rights)

Around 400 million SMEs are currently active worldwide. Almost all firms fall within this category, and it is widely acknowledged that they are crucial to the health of economies, representing around 99% of all businesses.

According to yet another report from the Global Entrepreneurship Monitor, the number of new businesses being formed is on the rise, reaching 582 million worldwide.

Financial Times reports that, contrary to expectations, there has been a rise in the number of small firms in developed economies due to the pandemic. The US Business Registry received tons of applications in 2020, a 95% increase! 

Compared to the same month in 2019, business application submissions in France increased by 20% and in Japan by 14%.

Around the Globe, 90% of All Businesses are Considered to Be Small

(World Bank)

90% of all trade occurs on a worldwide scale because of SEMs (some studies even go as high as 99.9%)! There were more people employed by small enterprises than by any other type of company. 7 out of every 10 new jobs are produced by SEMs. (look around and ask your friends where they work; you would be surprised that 90% of them work for small businesses!)

In addition, new businesses are responsible for around 40% of the country’s GDP. Thus, small businesses prefer not to register for loans compared to large companies, according to the World Bank. This is due to the fact that small businesses sometimes fund their endeavours with personal savings, money from friends and family, or even money generated by the company itself.

That makes sense, considering that each year, 65 million businesses struggle due to unfulfilled funding demands. This estimate is true within the United States and throughout the globe.
However, that’s not because they hate loans! Strict restrictions make it harder for small enterprises to obtain bank loans or raise cash.

More Than 213 Million Businesses Operate in the World

(Statista)

The estimated number of companies was nearly 213.65 million in the world in 2020, which might witness a drop because of the impending slump in 2023.

In 2019, the number of businesses peaked at 214 million. Therefore, this represents a slight decrease. In fact, the year 2019 was predicted to be the high point of global economic development within the time frame given.

As Population Continues to Grow, 600 Million New Jobs Have to Be Created by 2030

(World Bank)

The need to increase employment opportunities develops to match the expanding human population. Based on World Bank’s estimates, we’ll need over 600 million vacancies by 2030 to accommodate the growing global workforce.

Therefore, the government’s primary attention should be on SMEs and small enterprises in order to help the other sectors.

Almost Half of These Enterprises are Already Thriving From Home

(The US Small Business Association)

This is a really interesting one. The research found that home has witnessed the launching of 50%. The prevalence of such work-from-home businesses is growing. The unexpected rise in this trend can be traced back to the sudden appearance of COVID-19. 

56% of Small Business Owners are Concerned About the Cost of Digital Transformation

(McKinsey)

McKinsey, a research organisation located in Singapore, found that more than half of survey respondents believed digital transformation to be out of reach for their company’s budget.

This is why many small companies lack basic digital infrastructure, placing them even further behind their more digitally advanced medium and big business counterparts. Many factors contribute to this, but the fact that most cutting-edge digital solutions are developed with enterprise-level businesses in mind is a major one, according to the study’s findings.

Sometimes, it becomes too complex (somehow too challenging) to scale down to the small business level. 

Singapore data shows that 40% of business owners feel they lack the necessary digital skills to manage emerging technology, which is an effectively important factor.

Indeed, digital transformation for small businesses is a hot topic, and there still is a gap in adopting high-end techniques on the SME scale. 

The Most Common Justification for Establishing a Company is the Desire to Become Self-Employed

(Guidant)

Yes, it’s not just a random idea we heard people talking about. Actually, it’s a profound belief!

“Be your own BOSS!” 

In general, there is no single motivation behind why people launch enterprises. Yet, Guidant’s research shows interesting results on why people even start their own businesses.

When entrepreneurs were asked why they started their businesses, 29% said they wanted to be their own boss!

In case you’re curious about other common explanations, here they are frustrated with 9-to-5 office life and need to do a meaningful job.

Only two per cent of business owners attribute their success to seizing an unfilled market niche.

Actually, it’s pretty interesting; why? Because that explains a lot — why most of these small businesses fall short of achieving their dreams! It should start with market research. Passion alone doesn’t pay off.

70-80% of SMEs Worldwide Saw a 30–50% Drop in Income Due to COVID-19

(McKinsey)

COVID-19 hurt businesses, and its severe impacts were more prominent between February 2020 and April 2021; all industries suffered from lockdown, supplement shortages, and a slowdown in daily sales. 

It is estimated that 80% of SMEs lost up to 50% of their profits during the height of the pandemic. The analysis of small and medium-sized business environments in 32 nations provides this data, which shows that COVID-19 had a significant impact on national and global economies.

It was reported in another study conducted in the United States in 2020 that 45% of small businesses had experienced disruptions in their main supply chain.

44% of Small Business Owners Belong to Gen X 

(The Guidant Financial)

Cheers! That’s promising. We still have a chance. 

The Guidant Financial index for 2021 disclosed another interesting fact about global business statistics— Gen X (between the ages of 39 and 54) dominates the business population, representing about 45%. 

But older adults still have something to share (baby boomers, between 1946 and 1964), as around 40% of businesses are run by them.

Ever wonder what millennials do now? 12% of them have their own businesses, and this rate will keep growing!

Well, who is behind these businesses? Men still take over entrepreneurship with more than 66%.

About 15% of All Small Businesses Are in the Retail Industry

(Guidant Financial)

The retail sector accounts for almost 15% of all small enterprises, whether eCommerce or brick-and-mortar. Some more important types of SMEs are:

• Restaurants and food (13.7%).
• Health/ beauty/fitness services (9.7%).
• Business management and services (10%).
• Residential and commercial services (9%).

More Than Half of All Small Businesses Would Like to Add to Their Workforce

(Guidant Financial)

There was a lack of workers in 2022 due to layoffs during the pandemic, according to business statistics. However, 51% of small businesses aim to hire more people in the coming year. 41% of them also are thinking of increasing the size or restructuring the company.

Plus, 40% of owners wanted to invest more in digital marketing, and 23% needed to invest in traditional marketing. 

Others intend to increase their technological holdings by purchasing new information services (13%) or commercial services (14%).

56% Struggle to Fill Open Positions With Qualified Candidates

(Indeed)

More than half of all business owners in the country require assistance finding and hiring top talent.

According to the data, business owners report having a harder time locating qualified workers than in the past. However, 35% of people who took the survey indicated it is now more difficult to get the proper personnel than it was five years ago.

+50% of Small Business Owners Are Still Interested in Educational Degrees

(Fundera)

Forget about these inspiring stories to start your career without getting into a college. Yes, it happens, and creating a business has no qualification standards, but you need to set your rules based on your experience and knowledge.

Back to number language, most SME owners seem to have a high level of education— a bachelor’s degree or higher. 15% of respondents had some college education, 32% had a BA, and 54% had earned a Master’s.

Working Overtime is Very Common Among Entrepreneurs

(Fundera)

Being your own boss doesn’t mean freedom— or at least more free time. On the contrary, it actually means more working, and more working from home at that!

Almost 80% of business owners put in extra hours working. That usually includes working during late hours as well as during the day.  

“Flexible hours” has a different concept for small business owners. When it means for you that you can go to your work late or complete your tasks and go, it means for entrepreneurs that they work on the weekends (around 9 out of 10 said that). 

92% of Many Entrepreneurs Think That Having a Website is The Best Way to Promote Their Business Online

(Fundera)

We can’t agree more. According to our marketing analysis, developing a unique website strategy with the best user experience always pays off!  

Even though the majority of companies recognise the benefits of having a business website, there is still a sizable minority (11%) that does not.

In addition, 47% of businesses, according to Fundera’s survey, spend less than £8100 per year on digital marketing.

One-fifth of organisations never engage in digital marketing, and one-tenth invest nothing at all in marketing.

We Hear You: Why Most Small Businesses Fail

(CB Insights) 

The short answer is poor sales and cash flow.

While there are certainly exceptions, research shows that cash flow problems and a lack of sales are responsible for the closure of one in twelve businesses every year.

Also, poor sales can be translated into a lack of demand, as more than 40% of the entrepreneurs confirmed their failure because they could not find the right segment to purchase their offer.

23% found that hiring at the right time was the number one reason. 19% of these companies failed because they were out of competition or getting outcompeted in the industry. 

So, there is one common thing among all business owners who failed; they didn’t investigate the need for what they were offering to customers.

They might have learned the hard way, but you must be sure about your customers’ expectations and needs before starting your business. 

Other causes for the failure of startups are cost-related issues and unfriendly (in other words, low-quality) products. 

To sum up, the reason why new businesses fail is a mix between customer-centric reasons and a lack of resources and finance, which are enough to build blocks of having a successful business. 

Note: again, this makes more sense! Remember the only 2% who opened their business after spotting a market gap! Marketing analysis is the most prominent factor in success.  

Some 31% of Businesses Report That Increasing Sales is Their Primary Goal

(Keep)

31% of business owners cite increased sales as their top marketing objective. In addition, 25% claim that re-engaging and maintaining clients is their top goal in order to boost sales. Other significant features include cost savings (8%), lead generation (8%), and increased brand awareness (17%).

92% of Entrepreneurs Say They Have No Regrets about Launching their own Businesses

(Fundera)

However the high possibility of failure, approximately 92% of small business owners say they don’t regret their decision to launch their project. 

They affirmed that opening your business has multiple challenges and requires a lot of work and commitment, even though the majority (70%) put in more than 40 hours per week.

Who Made Profits Durning the Harsh Time of COVID-19? Only 63%

(Guidant Financial)

I guess they were producing masks! (Kidding!)

The truth is: Since the outbreak of the pandemic, over 41% of businesses have seen a decline in productivity.

In addition, only 63% of the businesses overall were profitable after lifting COVID-19 restrictions. 

Fewer than 5% of businesses feared their operations would be wiped out by the pandemic. In contrast, nearly 80% of those polled by Guidant Financial were optimistic about the future of their firm.

Nonetheless, what is the pandemic’s most widespread effect? A drop in revenue.

New Generations (Millennials and Gen Zers) are More Likely to Start Their Side Business 

(SalesForce)   

According to the data, young entrepreneurs from generations of millennials and Gen Z are more likely to launch a side business.

Indeed, these new generations are 188% more likely to have the motivation to create a side business compared to traditionalists and Baby Boomers. 

Compared to Baby Boomers, Zers and Millennials Gen are around 48% more likely to start a business because they had a good idea they were passionate about bringing to the market. 

And thanks to the easy regulations that enable you to start your own business, the process has become super comfortable for newer generations or anyone looking to become their own boss. 

Also, thanks to the rise of easy tools, online marketplace, and no-code or low-code and outsourced development, you need to hit simple buttons to operate your business from your comfortable sofa.

Nearly Half (47%) of All Company Marketers Are Sole Proprietors

(Fundera)

Owners of small businesses who are still strapped for cash often have to juggle a number of tasks at once. This survey found that nearly half of the small business owners are in charge of their marketing. 

This is why nearly half of all entrepreneurs of small businesses devote fewer than two hours per week to advertising their enterprise because they don’t have time!

UK Business Statistics

The last few years have witnessed a lot, making them the most turbulent era on record for small businesses.

Many events have tipped the scales of economic growth in the UK. The impact has been felt everywhere, from the pandemic to the Russian invasion of Ukraine. That has led to some surprising UK small business statistics. These events have been changes in the number going under and new company formation. However, different trends have also emerged that might positively change the entrepreneurship future. 

Yet, the overall makeup of the business world in the UK still has many familiar statistics. So let’s uncover the most important.

UK Hosts More than 5.5 Million Private Section Companies

(GOV.UK)

The number of businesses in the UK declined by 1.5% from 2021. 99.9% of these 5.5 million companies are considered small and medium-sized enterprises— 75% don’t employ anyone other than the owners.

Let’s dive deeper into these 5 million companies:

1. 5.47 million companies with fewer than 50 workers represent 99.2% of all businesses.
2. 35.900 businesses (0.7% of the business landscape) were considered medium-sized, with 5–249 employees.
3. Nearly 8.000 businesses (0.1% of the total business population) were large, with 250 or more employees.
4. The private sector in the kingdom comprises substantially non-employing companies and small employers.  
5. Only 1.4 million (or 26%) of these firms actually employed people; the remaining 4.1 million (or 74%) were solely handled by their proprietors.

Additionally, there was a drop of £390,000, or 6.5%, in the number of businesses from 2020 to 2021. That potentially explains the high-cost entrepreneurs found themselves obligated to pay to deal with the pandemic impact. 

On the other hand, the 2013-2014 annul year witnessed the highest increase when there was a 6.8% up in the business population.  

57% of Small Business Owners Feel Their Enterprises are at Risk

(Towergate)

A survey showed that more than half of business owners in the UK feel their business is at risk of closure due to economic instability.

This study surveyed 750 small business owners across the UK to find out the threats they’re facing in the wake of many crises, such as the cost of living and the impact these are having on their current projects. 

But where are small businesses in the UK most at risk? 

According to the same survey, the small businesses in Norwich are at the top of the list, with 73% of small business owners saying they are at risk of closure, 28% higher than any place in the kingdom.

Then, you can see Manchester (67%), Sheffield (66%), and Brighton (62.96%).

Human Resources Small Businesses are Most at Risk

(Towergate)

74% of small businesses in the human resources sector said that they are at risk of closure, followed by finance (68%), manufacturing & utilities (59.57%), and legal (58.54%) sectors among those vulnerable businesses.

Supply Chain Delays are the Biggest Threat Faced Small Businesses

(Towergate)

In the wake of economic instability, many crises have emerged, with 32% of small business owners citing supply delays as their primary threat.

Along with these threatened disruptions, retaining uniquenesses (27%) and changing consumer behaviour (26%) put many small businesses in the UK at risk of closure.   

However, threats to business manifest in a variety of ways and might take many incompetent business owners by surprise.

Sometimes it can be hard to predict and pinpoint threats. That’s why taking time to plan and identify probable risks over the coming year will strengthen business adoption and stability. 

Large Businesses in the UK Represent the Major Contribution to Turnover and Employment

(GOV.UK)

SMEs in the United Kingdom don’t embrace a large proportion of employment, only three-fifths— even though they generate around 50% of revenues. Here are the highlights you need to know:

In numbers, there were over 16 million (61% of the total) employees in SMEs, which contributed to £2.1 trillion in turnover (+50% of the total).

But what if we break them down into small and medium-sized businesses?

Roughly 13 million employees chose to work for small businesses (48% of the total), generating £1.4 trillion in revenue (only 34% of the total).

The second created 3.5 million jobs (13% of the total) and contributed to generating £0.7 trillion (17% of the total).

Can you put large companies in the context?

Sure! 39% of employees get hired in large companies, totalling 10.6 million. However, these companies are generating around £2.0 trillion (around half) in revenue.

1 Million Businesses Were Located in London

(House of Commons Library)

In 2022, the region most comprised of companies in the UK was London, followed by the South East of England (over a third of the UK business population). 

Also, London hosts the most businesses per 10,000 adult residents, with 1,593, and the other parts of England, especially the South East, is 1,257. 

On the other hand, the South of England comprises 1,214, and the East of England represents high rates. 

If you have a look at the United Kingdom as a whole, you will notice that the North East of England shares the lowest business density rate. Northern Ireland (990), Wales (807), and Scotland (815) all had slightly lower business density rates than the nationwide average.

Northern Ireland Business Statistics

Do you need up-to-date information on Northern Ireland’s economy in the year 2023? First, let’s discover trends to ensure your company succeeds. 

The Number of businesses operating in Northern Ireland Rose By 1.6% 

(Department for the Economy)

Despite the pandemic, new businesses have opened, increasing the total number of companies by 1.6% over the year to March 2022.

With an additional 1,245, there are now 78,885 businesses in Northern Ireland that are VAT and/or PAYE registered.

After a decline from 2008–2014, that was the eighth year in a row of expansion.

There Are 114,876 Businesses in Northern Ireland 

(Hit Horizons)

Northern Ireland’s small businesses made up 1.2% of the UK’s total (more than 9 million companies).

Northern Ireland ranked 12th among UK regions in the number of companies. 

The Majority of Businesses in Northern Ireland Were Fewer-Than-10-Employees Businesses 

(Department for the Economy)

In 2022, micro-businesses (those with 10 employees or less) made up 89% of all businesses in Northern Ireland, representing over 2% (1.640) of businesses with 50 or more employees.

45% of businesses in Northern Ireland, or 35,415, came with a turnover of less than £100,000, while 10% (8,220) had more than £1 million turnover.   

The City With the Highest Number of Companies is Belfast

(Department for the Economy)

Belfast hosts 29,873 companies, whilst Moyle has the lowest number of businesses (only 414). The top three most registered business activities go to wholesale, retail (15.0%), followed by construction (12.3%) and science (10.2%).

5% of Active Trade Companies Sent Products from the UK to Northern Ireland

(Parliament.UK)

Northern Ireland sent 2% of its products to the UK in all industries in 2022.

86% of firms in Northern Ireland are presently trading and continue receiving products from the UK in the same year.

Plus, UK exports to Ireland totalled £41.6 billion, whilst imports from Ireland were worth£20.4 billion, reflecting a trade surplus of £21.3 billion in 2021.  

US Business Statistics

Let’s go deeply through the most important facts about small business statistics in the US. 

38 Million of All Small Businesses in the US Hire Fewer Than 100 People

(Small Business Administration)

Earlier, we mentioned that there are more than 33 million such enterprises in the United States.

But, still, if we explore the larger scale of America, we can see there is 38 million small business with fewer than 100 individuals and 23 million with fewer than 20. 

If we wish to categorise the 33 million small enterprises in the United States, let’s check these facts:

1. Over half of all small businesses are operated by at least 5 people. 
2. Most of these companies are usually started by one person with assistance from friends and family. 
3. Other businesses are usually started by a small group of people who have successfully pooled their resources. 
4. Nearly eight out of ten enterprises (27.1 million) have only one owner, and those that do are almost always “owner-operated,” meaning the owner also handles most of the sales.
5. 85% of US enterprises have 20 or fewer employees, while 12% have less than 100.
6. Only 3% of 33 million businesses in the US have over 100 employees, representing the big boys of the small businesses in the globe (however, they have been in the market for many years and have expanded to a size that puts them in a position of their own).
7. Similar to small businesses in Northern Ireland and the UK, these private-sector companies are the most active institutions in the US in offering jobs and generating cash flow.
8. The same study refers that these businesses also tend to be the most agile, adaptable, and innovative.
9. Almost all these businesses have been in operation for several years before starting to see real growth.

Regardless of the business size, all business statistics concluded that all small companies have one thing in common— these structures are the backbone of the US economy.  

Small Businesses Create 47% of Private Sector Jobs 

(Fundera)

Small businesses are essential to any economy, creating the most jobs. Policymakers have known this fact for a long time on both sides of the political and economic spectrum. 

Indeed, small firms have created almost 65% of all US jobs since the year 2000.

Enterprises with fewer than 500 employees create more than 100 million vacancies. While huge corporations were responsible for creating only 5.6 million new jobs during the past two decades, small businesses were responsible for creating 10.5 million.

Sounds interesting, right?

But how much that reflects in revenues and GDP? In other words, how much do small business owners make?

An Average Small Business Owner Earns Nearly £50,000 per year.

(Small Business Administration Council)

Small businesses contribute nearly 44% of the US GDP. Yet, while they are important to the economy, the majority of these companies need to roll in the dough, which could be for many reasons.

Indeed, many business owners couldn’t make ends meet. As a result, they struggled to achieve their forecasted sales. The average revenue of a small business ranges from £50,000 yearly, based on a report by Payscale. Only around one-tenth of all small companies can make $120,000 a year in revenue.

It’s important to note that this average revenue includes the self-employed. On the other hand, 83% of small companies make less than £80,000.

Not to forget this significant number: less than 20% of small businesses in the US generate less than £40,000. 

Here is the coolest part: many business owners don’t pay themselves a month’s salary at all in the first years because only a fraction of their business is profitable in the early years!

On top of that, they often burn through their savings to get through or mostly to get their business off the ground. 

According to many business statistics, taking businesses from startups to being profitable is a primary challenge for most small companies.

31% of Small Business Hit Hard by the Panadamic Crisis 

(Facebook)

Uncertainty is one primary factor that can really hurt small businesses, and this has been especially evident during COVID-19. 

According to a Facebook report for 2020, nearly one-third of small companies in the US were out of operation after the pandemic crisis.

Not just that, but 70% of US small businesses closed their doors in March 2020 when the US became the epicentre of the deadly virus. More than 60% of these small businesses shut down due to health authorities and government orders when large parts of the US states went into lockdown in a bid to curb the virus spread. 

Some small business owners had to take measures to adapt to the de facto situation this pandemic created, such as working remotely and enhancing online activities.

Indeed, the more flexibility and adoption companies developed, the more ability they showed to survive tough times. 

Digital transformation was the key to trying and reaching out client base and keeping business alive by offering an eCommerce website to sell products and services online. Consequently, more than half say they have enhanced their interactions with customers over the internet. Plus, 36% of personal businesses that invested in online tools also made all their sales online. 

Moreover, 28% of these small business owners say cash flow is the biggest challenge, followed by a need for more customer demand. 

So, what percentage do small companies earn and how many fail?

45% of New Businesses Fail During the First Five Years

(US Bureau of Labor Statistics)

There is a common belief that an enormous number of small businesses fail within a year. But that’s not the whole story. According to BLS’s data, the number of business failures in the first year is closer to 20%. After that, however, the survival rate declines significantly over time. 

When these businesses reach the 10th year, the rate shrinks to 35%.

It seems horrible! But let’s listen to the main reasons for small business failures. 

The most common reasons are poor management, lack of capital, and not targeting their products for a niche market. 

And the surprising one is that companies that don’t pay enough attention to a well-laid digital marketing strategy and advertising to promote a brilliant online presence have a higher failure rate! 

The Majority of Small Businesses Set Less Than 2% of Their Budget to Marketing Efforts 

(Small Business Administration Council)

On average, small businesses allocate only around 1% of their budget to marketing! Not to mention the best rule of thumb is to spend around 7% of your gross revenues on advertising. 

But most new business owners don’t tend to spend for that—only a fraction (1.08%) of their annual budget is allocated to marketing!  

That is a massive mistake because marketing is essential for any business to grow. New companies must inform potential customers about their products and services to generate sales.  

In today’s world, it has become a subject of life and death for business success. Therefore, having an online presence and using various marketing apps and tools should be included in each good marketing strategy.

However, many small companies still don’t even have a domain name!

30% of Business Owners Disagree With Retail Locations

(SalesForce)

Despite the pandemic, the number of new businesses in the United States grew by 24% in 2021.

These businesses have their own management modules compared to other organisations. For example, the survey found that 30% of entrepreneurs who launched their projects during the pandemic will never open a retail store.

Salesforce has something to say about this, too. It reveals that 32% of people who left their jobs during the pandemic (layoffs or furloughs) chose to start their own projects.

71% of Small Businesses Have a Website

(Top Design Firms)

The number has doubled in recent years. For instance, in 2018, only about 50% of small businesses in the US had a website. Now, we can see 71% of small businesses built their own website and 75% in EU countries. 

This general trend is upward, and the number of small businesses with inspiring websites has been maximising steadily.

The study also shows a big correlation between the company size and whether they have a website. Businesses with more staff are likelier to have an online presence than businesses with fewer people. 

That is more likely because they have multiple resources to invest in website management and development. 

However, 28% is still a significant number of small businesses that need to establish an online presence. That represents a missed opportunity because investing in a website is one of the most influential leads-driven marketing tools available. Also, it enables you to reach a larger audience and find out what your company offers. 

But it’s not just about building any website!

Yes, having one is necessary for business in the modern world, but implementing it poorly or unprofessionally can result in a lot of money and time and would hurt your brand image.

If you cut corners in the development or web-design process, you will end up with a website that will not inspire trust or, maybe worse, get hacked!

There are many things to consider when structuring your website, but cybersecurity is a notoriously overlooked aspect for many small businesses. 

Just remember that all it takes is only one weak link in your website that will hurt your security, resulting in a devastating data breach.

32.4 Million Businesses are Family-Owned

(FamilyBusiness.org)

59% of the private sector workforce is a family-owned business. The sectors with the highest share of this kind of business are manufacturing and consumer services, representing 27% and 37%, respectively. 

Moreover, wellness and health sciences have the lowest share— only 4%. This is understandable because the American government is dominating this particular sector and leaving tight space for independent contractors to penetrate this sector.  

Northern Ireland’s Economy in 2024: An Update

While 2024 is still unfolding, several key trends and statistics paint a picture of Northern Ireland’s current economic climate:

Current Performance:

• Growth: After flatlining in 2023, the Northern Irish economy is projected to expand by 0.7% in 2024. (EY Economic Eye, February 2024)
• Services Sector: Leading the charge, the services sector is expected to grow by 3.5%, with significant gains in retail, business services, and transport. (Department for the Economy, January 2024)
• Production Sector: Facing some headwinds, the production sector is forecasted to decline by 4.1%. However, it remains 1.0% above pre-pandemic levels. (NISRA, January 2024)
• Unemployment: At a record low of 2.4%, unemployment is a positive sign but raises concerns about labor shortages. (EY Economic Eye, February 2024)

Challenges and Opportunities:

• Labor Shortages: A significant challenge, with redundancies increasing and companies struggling to find skilled workers. (NISRA, January 2024)
• Political Uncertainty: Ongoing political developments and the Northern Ireland Protocol remain concerns for businesses.
• Global Uncertainties: Inflation and potential recessions pose international risks.
• Exports: Strong export performance, fueled by a more settled external environment, is a key opportunity. (Barclays Corporate Banking, 2024 Outlook)
• Digitalization and Innovation: Embracing these trends can boost productivity and competitiveness.

Looking Ahead:

• Economic growth is expected to continue, albeit at a slower pace.
• Focus on attracting and retaining talent will be crucial.
• Adapting to a changing global landscape and political uncertainties will be key.
• Investing in digitalization and innovation is essential for long-term success.

Important Resources:

• Department for the Economy: https://www.economy-ni.gov.uk/
• Northern Ireland Statistics and Research Agency (NISRA): https://www.nisra.gov.uk/
• EY Economic Eye: https://www.ey.com/en_us
• Barclays Corporate Banking: https://www.barclayscorporate.com/

How Can ProfileTree Help You?

Who we’re?

WE ARE growth specialists!

WE ARE passionate about exploring new digital marketing opportunities for ambitious brands seeking to define their boundaries and then push them to drive meaningful impact on your business.

WE AER professional strategists driven by integrated digital marketing skill sets that will help transform your brand from market player to market leader— and keep you there!

Business statistics are bleak. Our digital marketing services are unique!

We will help you write your chapter on business success.

Combing sector knowledge with marketing expatriates, our specialist teams develop digital marketing programs for each of our clients to address your marketing challenges head-on. 

Working closely with each individual across all industries, you will definitely find something that will resonate with your audience because we can fulfil all goals, from launching a startup to brand awareness and lead generation. 

How?

• Understand your audience’s needs in each step in your buyer’s journey across all conversion points. 
• Deliver the best service and achieve your objectives through our team, which is not only made up of marketing experts across social media, branding, websites, content creation, design, and digital acquisition— but is also immersed in each client’s industry. 

“Great team committed to personalised professional support and passionate about each of their respective areas of expertise. I received great support and input for my business development plans, very highly recommended.”

• Drive your business towards sustainability by adopting an approach that starts with an assessment to set out a path to the plan. 
• Develop a well-tailored strategy and then support its implementation. 
• Every activity will be measured and optimised, so it always provides ROI.

Let’s talk!