Owning a business can be both rewarding and risky. It is the dream of every entrepreneur to call the shots and control their destiny. It is rather interesting to note that small businesses are a much larger contributor to adding new jobs in the industry than the large honchos and so it is the small guys that power our economy.
What is a small business?
Small businesses are those that have fewer than 500 employs although most of them reach nowhere near that figure and usually have 200 employs (full and part-time). They vary in their sizes and capacity for growth. From a small bakery shop to a unicorn, from operating in a garage or dorm room to running a factory, they vary vastly and come in all shapes and sizes.
What are the various stages of a business?
The various stages through which business goes through is called the business cycle that usually repeats itself. It starts from the existence stage when the business has just started and is new in the industry. It is called the start-up stage. The company then moves onto the survival stage when it has established itself in the market but may not still be earning any revenue. The mom and pop stores are in this stage.
The next is the success stage where the firm needs to decide to expand and grow or keep the firm stable and profitable and maintain the status quo. The next is the take-off stage where the business grows rapidly and the firm needs to decide how to finance that growth.
The next stage is the maturity stage where its resources are maturing. The last stage is ossification where the firm is big and established but fails to innovate and avoids risk, and thus may fail to repeat the cycle.
What statistics one needs to know before starting a business?
The business statistics for growth and expansion that one needs to know before starting a business or during the stage of expansion are as follows:
According to the Small Business Association (SBA) of the United States, more than 50% of all Americans either own or work for the small businesses, 51% of the small and medium-sized businesses (SMBs) are embracing the Artificial Intelligence (AI) technology, 18% of the business owners are immigrants and 51% of the billion-dollar businesses known as Unicorns are founded by the immigrants.
Other important statistics are that over the past 20 years (1997-2017), the women-owned businesses have grown 114% as compared to 44% growth rate for all businesses. The survival rate for the businesses is that half of all of them will survive 5 years or more and 82% of the businesses that fail do so because of the cash flow problems.
Economic uncertainty and a decline in customer spendingare the biggest challenges of running a business. Small businesses employed a whopping 57.9 million people in the US in 2017 and 47% of them identified advertising and marketing as their key strategies. 86% of them are taking home a salary of less than $100K. The net profit margins have increased to 7.5%. 51% of the Americans prefer to shop online and 74% of the small businesses have no eCommerce.
Being an employee in a large firm is safe and rewarding but being the owner of a business and employing people helps one to take the matters in their own hands and this is when the real learning starts.The small businesses have accomplished great things in the past and they compel companies to innovate. They support our communities by providing jobs and innovation and thus have a huge impact on our day-to-day lives and so it very important to be aware of the business statistics for growth and expansion.