Despite the many issues with business ownership, small businesses are more determined than ever to succeed. At last count, over 32.5 million small businesses across the United States provide opportunities for customers and workers and keep the economy flourishing.
Here are some interesting small business statistics that may give you a glimpse into small business ownership for 2023.
Job Creation by Small Businesses
Small businesses have played a critical role in creating meaningful jobs for workers. According to the Bureau of Labor Statistics (BLS), small businesses created 12.9 million jobs in the past 25 years. Small businesses employ a significant percentage of the U.S. workforce.
Another interesting statistic is the length of time that small businesses have remained open. Around 20 percent of small businesses close within a year, a significant number of companies remain open for ten years or more.
The BLS also reports that 34.6 percent of small businesses that opened in March 2012 have remained open into 2023. Even though some small businesses fail to make it five years, many outlast expectations and operate for decades.
The lack of finances is one of the reasons why many people may not start a business. That is why the government helps provide certain financial resources to small business owners. In 2022, the Small Business Association (SBA) provided small businesses $25.7 billion in SBA loans.
According to the SBA, 68 percent of those loans were $350,000 or less. Another financial program that the SBA provided to small businesses was the Surety Bond Guarantee Program. This program helps small businesses compete for government contracts, particularly small businesses in historically underserved areas.
In the fiscal year of 2022, the SBA aided in the distribution of $2 billion in contracting awards for small businesses. More than 62 percent of those awards reached small business owners from underserved areas.
Compared to the corporate world, small business ownership is diverse. Women account for 21.4 percent of small business owners. As of 2023, the United States has 1.2 million women-owned businesses.
Minority business owners account for 19.9 percent of businesses, and immigrants account for 21.7 percent. From these statistics, it seems like diversity may be encouraged by entrepreneurship.
Increase of Revenue
In addition to encouraging diversity, small business owners are also optimistic about their future success. According to Bank of America’s 2022 Small Business Owner Report, 64 percent of business owners expect an increase in their revenue over the next year.
Areas of Concern for Small Businesses in 2023
However, that doesn’t mean business owners have no concerns. One of the most pressing concerns is inflation. Thirty-two percent of small business owners cited inflation as the most important problem.
In a monthly survey by the National Federation of Independent Business (NFIB) Research Foundation, more than one-third of small business owners declared inflation the most important problem they face today.
Another pressing issue is the ability to fill out jobs. The NFIB survey also revealed that small business owners have issues filling out jobs. 41 percent of small business owners cited their struggle to fill open positions.
Another issue small business owners are having is finding qualified job applicants. 93 percent of small business owners actively hiring in December of 2022 cited that the applicants for their open positions were not qualified.
Supply Chain Issues
Supply chain issues are another problem for small business owners. The NFIB survey also reports that most business owners have felt the impacts of supply chain issues. Nearly a quarter of small business owners cited that these issues significantly impacted their businesses.
Cybersecurity for Businesses of All Sizes
Another concern for small business owners is cybersecurity. According to the Bank of America Small Business Owner Report, cybersecurity is considered the most important emerging technology by 57 percent of business owners. 39 percent of small business owners consider other technologies like automation to have an important role.
Overcoming the Pandemic
Small business owners are also concerned about overcoming the negative effects of the pandemic. Small business employment decreased significantly during the pandemic, with 8.6 million jobs lost.
However, during the second half of 2020, small businesses created nearly 5.5 million jobs. Still, small business owners have cited the negative effects that the pandemic has had on their businesses.
Twenty-one percent of small business owners reported experiencing large negative effects on their businesses due to the pandemic. But don’t expect small business owners to worry about the effects for too long.
Just over 18 percent of small business owners plan to change their business strategies within the next six months.
Business strategies are not the only changes that small business owners will make in 2023. The Census Bureau reveals that small business owners want to remain resilient after experiencing the pandemic.
Over 20 percent of small business owners plan to improve their goods and services. 18.5 percent plan on shifting their business strategies, and 13.9 percent plan to adopt or expand the use of digital technologies.
What the Future Holds for Small Businesses
These statistics provide a realistic view of the landscape for small business owners. Based on these statistics, small businesses are diverse entrepreneurs who stay innovative. They acknowledge the issues in the marketplace but continue to press forward. They also continue to learn more about the issues in their industry and how to overcome them.
One of the issues that small business owners want to address is cybersecurity. Small business owners consider this a main technological issue for the coming decade. One of the ways to address the issue of cybersecurity is through a great disaster recovery plan. Working with the right IT services provider will help many small businesses with their disaster recovery plan.
Talk to an IT Professional Today
Does your small business need tech, IT, and security services? Whether you are already running a small business or building a startup, an IT professional can make all the difference. Call one today for your free consultation.