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8 Revenue Statistics for Small Businesses

The average yearly income of small companies with no workers is $46,978.

The average annual salary for a small company owner is $71,813 dollars.

Small company owners earn less than $100,000 per year in 86.3 percent of cases.

In 2016, the median income for small company owners who are self-employed by their own incorporated companies was $50,347.

In 2016, the number of non-employer businesses with revenues of $1 million to $2.49 million rose by 1.6 percent, from 35,584 to 36,161.

In 2015, companies with less than $5 million in yearly revenue experienced an average increase of 7.8% in annual sales.

In 2007, female small company owners made an average of $130,000 in revenue, while male small business owners made $570,000 on average.

According to one research, a lack of cash flow was a factor in 82 percent of unsuccessful companies.

Small companies abound around us. You engage with them every day, whether you know it or not, and they influence your life and the way you live it. It’s no surprise that small companies employ almost half of the nation’s workers, with 30.2 million of them accounting for 99.9% of all enterprises in the country.

As a result, you may be interested in learning more about the financials of these companies. The Small Company Administration tracks small business income every year, and additional data may be gathered from census records and other sources. Here are some income data for small businesses in the United States to give you a more comprehensive view of how they perform.

Annual Revenue Average

When we speak about small companies’ typical annual income, we’re referring to the amount of money they make each year. That is, how much money the company earns before costs and taxes are taken into consideration. Because revenue appears on the first line of a small business’s income statement, with the breakdown of everything else below it, revenue is often referred to as the “top line.”

The average yearly income of a small company is the total amount of money brought in by all of those companies. Revenue is defined as “gross revenues, sales, commissions, and income from trades and companies, as reported on yearly business income tax filings,” according to the United States Census Bureau. The average yearly revenue for nonemployers in the United States is $46,978.

So, if you were under the idea that all small company owners are billionaires, or if you were expecting to establish your own firm to earn your fortune, you should know that this is seldom the case. The typical company owner’s yearly revenue is a considerably smaller amount. Also, bear in mind that revenue is prior to deducting costs and taxes.

Smaller companies with workers, on the other hand, tend to do better. Employer-owned companies generate greater income on average than non-employer-owned enterprises. It should come as no surprise that the more workers a company has, the more money it generates on average, allowing it to recruit additional people.

Businesses with one to four workers earned an average of $387,000 a year in 2007, while those with five to nine employees earned an average of $1,080,000. From then, the numbers continue to rise: Small firms with 10 to 19 workers made an average of $2,164,000 in sales, those with 20 to 99 employees made an average of $7,124,000, and those with 100 to 499 employees made an average of $40,775,000. Those are not insignificant figures.

How many small businesses make it to $1 million in revenue?

Before you give up hope that you’ll never be a millionaire as a small company owner, consider this: The number of one-person companies, or nonemployer businesses, reaching $1 million in sales is on the rise. In 2016, the number of non-employer businesses with revenues of $1 million to $2.49 million rose by 1.6 percent, from 35,584 to 36,161.

While the chances of a single-person company becoming a billionaire aren’t great, it’s still remarkable when you realize that just one person is in responsible of everything from manufacturing to marketing to sales—and everything in between.

Household Income of a Small Business Owner

Small companies may be a significant source of revenue for some entrepreneurs; in fact, according to a study of non-employer firms, two-thirds of them are the main source of income. [4]

In 2016, the median income for small company owners who are self-employed by their own incorporated companies was $50,347. Unincorporated business owners earned less than half of that, with a typical income of $23,060. [5] The SBA only looks at median income, so we’ll have to seek elsewhere for averages.

According to a survey of hundreds of small company owners, 86.3 percent earn less than $100,000 per year, whereas Payscale reports that the typical small business owner earns $71,813. [6]

A small company owner’s typical income also varies by industry. Retail shop owners, for example, earn an average of $50,454 [7], whereas construction company owners earn an average of $72,346.

Sales Growth in Small Businesses

In 2015, companies with less than $5 million in yearly revenue experienced an average increase of 7.8% in annual sales. [9] Small companies in three industries—construction, health care, and food and lodging services—saw the most rapid expansion during that period, with growth rates a percentage point higher than 2014 projections.

What Are the Differences Between Male and Female Business Owners?

Not only are there fewer female company owners than male business owners, but women also generate less revenue each year. In 2007, there were 7.8 million female company owners compared to 13.9 million male business owners. Men made more than four times as much money as women, with an average of $570,000.

What Is the Small Business Failure Rate?

Money is essential for keeping your company afloat. According to one research, a lack of cash flow was identified as a significant cause in the collapse of 82 percent of companies. Cash flow is the leading cause of company failure with that proportion. A company’s failure may be caused by a number of minor issues, such as operating a seasonal business or entering an oversaturated industry, but the underlying issue is always the same: a lack of funds.

If you haven’t launched your company yet, do a cash flow study to identify any obstacles to healthy earnings and ensure that there is a clear demand for the products or services you’ll be offering.

What Do These Numbers Imply for Small Business Owners?

While some small companies succeed (after all, some company owners earn millions), this isn’t the case for the majority of entrepreneurs. After looking at the revenue and income of companies and their owners, it’s obvious that although several are successful, the majority of small company revenue data indicate that most owners make considerably less.

The important thing to remember is that even if you aren’t making a lot of money, many companies manage to stay up and operating. In reality, only around 80% of companies survive their first year, and only about 50% survive five years. [11] Also, as previously stated, a lack of cash flow is the primary cause of company failure. If you’re thinking about establishing your own small company, utilize these small business income figures, as well as this supplementary information, to make educated choices and develop a solid business strategy.