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Small Business Facts

Sources for Facts: The following small business facts have been compiled from publications by: U.S. Bureau of Census International Data Group (IDC) Small Business Administration (SBA), and numerous other publications and online sources. See bottom of page for a partial summary list.

Quotable U.S. Small Business Facts

Stat-USASTAT-USA
STAT-USA/Internet is a service of the U.S. Department of Commerce. Access to business, trade, and economic information.

IDCIDC
A market intelligence firm specializing in technology trends and predictions.

U.S. Census BusinessU.S. Census Bureau
A comprehensive source of data on business-related statistics in America, including e-commerce statistics, business expenses, survey of business owners, and economic data for different industry sectors such as retail, services, and manufacturing.


- Index -

Business Expenses

Percentage of Goods & Services Purchased by Companies with Less than 100 Employees
Banking Services ............................. 74.9%
Truck purchase, rental, or lease ............. 69.2%
Advertising promotion ........................ 65.3%
Automobile purchase, rental, or lease ........ 64.1%
Freight, express services .................... 62.7%
Printing services ............................ 58.9%
Temporary help ............................... 50.8%
Web development .............................. 50.5%
Travel arrangements .......................... 48.3%
Security systems .............................. 46.0%
Consultation services ........................ 44.3%

Source: MRI, 2004

Costs of Doing Business

It has been estimated that workers taking home office supplies costs businesses over $50 billion a year.
Employeetheft.com, 06/2006

40% of small business owners predicted their greatest expense in 2006 would be payroll.
MasterCard International, 01/2006

Return fraud is expected to cost retailers $9.6 billion in total for 2006.
National Retail Federation, 11/2006

65% of retailers predicted their expenditures for customer relationship managment (CRM) will increase this year.
Ogden Associates, 03/2006

More than 40% of small businesses have reduced energy use in response to higher energy costs.
Open from American Express, 06/2006

56% of small businesses say they use the internet to purchase supplies.
Open from American Express, 06/2006

The average small business spends nearly $8,000 per employee to stay in compliance with government regulations.
SBA, 07/2006

There are an estimated 23 million shoplifters in the US, costing retailers more than $27 million each day.
Shopliftingprevention.org, 09/2006

Small businesses account for nearly 30% ($4.7 trillion) of commercial spending in the U.S.
Visa USA, 02/2006

- Index -

Business Technology

Over 12 billion IMs are sent globally every day, an increase of 19% since 2004.
AOL, 11/2005

4 out of 10 workers check their e-mail before going to work.
America Online/Opinion Research Corporation, 11/2005

60% of businesses are planning to boost their spending on web design, e-mail, and data quality initiatives.
CSO Insights Inc., 09/2005

6 out of 10 small and medium-sized business use e-mail marketing.
Frank N. Magid Associates, 12/2005

In the first half of 2006, handheld vendors sold 4 times as many smartphones as PDAs .
Gartner, 10/2006

5 out of 10 small businesses say they update their websites once a month or more.
Interland, 09/2005

53% of small businesses say their website is used primarily to increase company credibility; 49% use it to generate sales; 38% use it to create brand awareness; 29% believe it acts as a critical building block for product and service development.
Interland, 09/2005

By the end of 2006, 63% of big companies plan to syndicate content via RSS.
Jupiter Research, 05/2006

7 out of 10 business executives believe that technology has significantly improved company efficiency.
Korn/Ferry International, 07/2005

87% of corporate managers say that internet communications technology plays a key role in supporting sales and marketing operations.
Larstan Business Reports, 07/2005

2 out of 3 small business owners believe technology gives them a competitive edge.
MasterCard, 12/2005

By 2009, it is predicted that 75% of all U.S. corporate phone systems will use VoIP connects.
Radicate Group, 09/2005

By 2010, it is predicted that business use of mobile IM will lead to a $2 billion-plus market in Western Europe and North America.
Strategy Analytics, 10/2006

3/4 of small business owners have a plain cell phone; 1/2 have a smart phone that sends/receives text messages and a lap top computer; 1/10 have a Blackberry or other device that sends/receives text messages and files.
The Wells Fargo/Gallup Small Business Index, June 2005

Small businesses with 20 to 99 employees spend roughly $70,000 per year on IT and half of these say their biggest IT challenge is the integration of different applications and systems.
Yankee Group, 03/2006

- Index -

Business Travel

The average corporate traveler is overcharged $11.35 a night.
Corporate Lodging Consultants, 07/2005

43% of workers polled said they use laptops on vacation for work-related e-mails.
Harris Interactive, 07/2005

48% of employees polled said they travel for work less frequently compared to five years ago.
Robert Half International, 07/2005

- Index -

Consumer Trends

Only 8% of America's affluent inherited their wealth.
Harrison Group and Worth Taylor Harrison, 03/2006

71% of teens say they are interested in becoming entrepreneurs; up from 64% in 2004.
JA Worldwide, 08/2006

Roughly 57 million adult Americans read blogs; 54% of these bloggers are under 30.
Pew Internet and American Life Project, 07/2006

13-to-21-year-olds influence 81% of their families' apparel purchases.
National Retail Federation, 10/2006

The majority of boomer wealth is held in 12 million privately owned businesses, of which more than 70% are expected to change hands in the next 10-15 years.
Robert Avery, Cornell University, 02/2006

In 2004, 4 out of 10 working households were in danger of having too little income to fund their retirement.
The Center for Retirement Research, 06/2006

By 2010, retirement plan rollovers will put another $13 trillion into baby boomers' hands.
Tiburon Strategic Adviser, 04/2006

By 2007, the buying power of Hispanics ($863 billion) will surpass that of African Americans ($847 billion).
University of Georgia, 09/2006

When asked, "What age do you think it would be too late to start your own business?" 60% responded "never too old."
Yahoo Small Business/Harris Interactive, 04/2006

- Index -

Cyber Security

The average loss per phishing victim jumped from $257 in 2005 to $1,244 in 2006.
Gartner Inc., 12/2006

3/4 of computers use spam blockers.
Arbitron/Edison Media, 10/2006

At large organizations, 68% of information security professionals say laptops pose the largest security risk.
Enterprise Strategy Group, 03/2006

People who use online banking are less likely to become victims of fraud. They suffer an average loss of $551 compared with $4,500 for traditional paper and mail bankers.
Javelin Strategy & Research, 12/2005

20% of all e-mail messages received by corporate servers are spam.
Panda Software, 09/2006

8 out of 10 internet users no longer open attachments from unknown sources.
Pew Internet & American Life Project, 07/2005

1/4 of internet users say they always read privacy policies, user agreements, or other disclaimers before downloading and installing files from the internet.
Pew Internet & American Life Project, 07/2005

1/5 of consumers will terminate a relationship with a company after being notified of a security breach.
Ponemon Institute, 12/2005

Computer security threats, including viruses, worms and Trojan horses were up 48% in 2005 from the previous year.
Sophos, 01/2006

64% of small businesses say they've taken action to better protect customer financial information.
VISA / U.S. Chamber of Commerce, 07/2006

- Index -

E-Commerce

Do E-commerce Websites Focus on Products or Services?
 
ALL
SBs
Website
SBs
Products only ..................... 9.9% 10.2%
Mostly products, some services .... 23.8% 25.5%
Some products, some services ...... 17.2% 19.3%
Mostly services, some products..... 22.1% 23.2%
Services only ..................... 27.0% 21.8%

Source: IDC, "Web Site Development in U.S. Small Businesses" 2004

E-Commerce Buying Trends

3/4 of online shoppers say they would not return to a website that took longer than 4 seconds to load.
Akamai, 11/2006

Roughly 30% of the total U.S. internet population visited blogs in the first three months of 2005.
comScore, 08/2005

Online retailers are acquiring new customers at a 15% annual rate versus 2% for traditional brick and mortar retail outlets.
Deloitte & Touche USA, 11/2006

U.S. consumers are expected to increase their retail online spending from $877 per consumer in 2005 to $1,512 per consumer by 2009.
eMarketer, 05/2006

Consumers are 50% more likely to be influenced by blogs and e-mails than TV or radio advertising.
EPM Communications, 04/2006

1/4 of all retailers offer information about their products online.
Forrester, 07/2006

93% of consumers say they are unlikely to purchase from or even return to a website after encountering annoying pop-up ads; 89% are annoyed when they need to install extra software; 83% are annoyed when registration pages block access to online content.
Hostway, 07/2005

2/3 of adults say they would not pay for content to avoid online advertising. However, 31% of online adults paid for content in 2005, up 5% from 2004.
Jupiter Research, 09/2005

79% of small businesses shop online regularly.
Jupiter Research, 07/2006

16% of consumers say they would contact a vendor through e-mail. 68% of consumers say they would use the phone number listed on a website to contact a vendor.
Nielsen/Net Ratings, 09/2006

54% of consumers referred a friend to a vendor found online.
Nielsen/Net Ratings, 11/2006

Online sales are growing at a rate between 20 and 25% per year. Online sales (including travel) are projected to reach $211.4 billion this year.
Shop.org, 07/2006

1 second: the frequency new blogs are created.
Technorati, 11/2005

93% of those who have a net worth of $10 million or more have purchased a luxury product on the internet in the past year.
The Luxury Institute, 07/2006

Marketing promotions U.S. online retailers are planning to use to generate revenue from loyal customers during the 2005 holiday season: 63% free shipping, 42% value-added promotion, 33% online-only sale, 33% special repeat buyer discount, 29% bundle offer, 28% early-shopper discount - 28%, 11% rebate; 22% othe, 12% no special offer.
WebTrends, 08/2005

- Index -

Entrepreneurship

"What is the single most important challenge that your business will face in the new calendar year?"

Here's what 300+ CEO's said of small- and mid-sized companies:

Finding and retaining qualified employees .... 18%
Increasing sales/revenue/demand .............. 15%
Growing the business ......................... 14%
Changing economy conditions .................. 10%
Increased costs of materials/energy/health ... 8%
Developing new products and services ......... 7%
Developing new markets/distribution channels . 6%
Other ........................................ 22%

Source: Entrepreneur magazine and PricewaterhouseCoopers' "2006 Entrepreneurial Challenges Survey"

Interesting Trends and Entrepreneurship Facts

Nearly 7 out of 10 business students are interested in owning their own business.
Collegiate Entrepreneurs Organization, 07/2006

7 in 10 people feel that taking risks is more important to success than avoiding mistakes.
Caliper, 06/2006

7 out of 10 teens say they would like to start their own business; 1/4 of these say they would like to start a retail business.
JA Worldwide Interprise Poll, 09/2005

Of the top 50 highest growth companies in the Fortune 1000, 98% have mission statements.
Kinetic Wisdom, 08/2006

1 out of 2 of the nation's businesses are operated from home.
US Census Bureau, 09/2006

On average, small-business owners work 52 hours per week.
Wells Fargo/Gallup Small Business Index, 08/2005

3/4 of U.S. adults who go online say the internet has made it easier to start a business.
Yahoo Small Business/Harris Interactive, 04/2006

- Index -

Home Based Businesses

Number of U.S. Homebased Businesses in 2005
Income-generating homebased businesses . 13.8 million
As primary income-generating ........... 9.7 million
As part-time income-generating ......... 4.2 million

Source: IDC, "U.S. Home Office 2004-2008 Forecast" 2004

Office Equipment Owned by Homebased Businesses
PC ........................................... 85.3%
Cellular Phone ............................... 80.7%
Inkjet Printer ............................... 80.7%
Scanner ...................................... 63.4%
Fax Machine .................................. 55.5%
Digital Camera ............................... 49.4%
Copier ....................................... 46.5%
Multifunctional Peripheral ................... 30.3%
PDA .......................................... 21.8%
Monochrome Laser Printer ..................... 19.1%
Color Laser Printer .......................... 14.8%

Source: IDC, "Technology Use in Home Office Households" 2004

- Index -

Human Resources

Executives say their managers spend 7 hours or more a week on average sorting out personality conflicts among staff members.
Accountemps, 10/2006

49% of small business say they cannot attract and retain top quality employees without offering competitive health benefits.
Aflac, 06/2006

7 out of 10 college job seekers say they would prefer working for a medium or small employer compared to a large company.
CollegeGrad.com, 02/2006

Workers can waste more than 20 hours monthly thinking about personal finances during company time.
Debt-Free America, 10/2006

46% of new hires leave their jobs within the first year.
eBullpen, 09/2006

The top five reasons new staff fail is related to: 26% coachability, 23% emotional intelligence, 17% motivation, 15% temperamant, and 11% technical competence.
Leadership IQ, 09/2005

4 out of 10 employers worldwide are having difficulty meeting their employment needs due to the lack of talent available to them.
Manpower Inc., 02/2006

84% of executives say it takes just one or two typographical errors in a resume to remove a candidate from consideration; 47% said one typo is a deciding factor.
OfficeTeam, 09/2006

83% of CEOs believe that the workforce is the single largest expense for their businesses. 49% of CEOs are concerned that a shortage of qualified workers could limit the growth of their company in the year ahead.
PricewaterhouseCoopers, 09/2006

30% of executives say motivating their employees is their toughest challenge.
The Creative Group, 09/2006

When equity, achievement and camaraderie are all present in the workplace, employees are 15 times more enthusiastic
Sirota Survey Intelligence, 06/2006

7 out of 10 human resources managers say businesses are embracing formal coaching as an employee-development method.
Society of Human Resource Management, 04/2006

- Index -

Marketing & Advertising

Roughly 7 out of 10 computers use pop-up ad blockers.
Arbitron/Edison Media, 10/2006

For generating leads for direct marketing media channels, email and telephone produce the highest response rate at 2.45% and 2.60%.
Direct Marketing Association, 11/2006

By 2011, companies are expected to spend $26 billion on internet classifieds.
JupiterResearch, 10/2006

66% of newer businesses that have been in operation less than 10 years use a company website for marketing, while only 51% of older businesses do so.
Kelsey Group, 05/2006

Viral marketing campaigns produce 7 to 8 times more clickthroughs than traditional banner ads.
MarketingExperiments.com, 11/2006

3/4 of consumers say they can remember the brand name of a promotional item they had received within the past year.
MarketingSherpa, 02/2006

47% of small business owners use the internet to market or advertise their business.
Open from American Express, 05/2006

1/4 of advertisers have stopped or slowed their pay-per-click advertising.
Outsell Inc., 10/2006

In 2005, North American advertisers spent $5.75 billion on search engine marketing, a 44% increase from 2004. In 2010, it is projected that search engine marketing spending will reach $11 billion.
Search Engine Marketing Professional Organization, 01/2006

64% of retailers conduct up to three e-mail campaigns per month.
WebSurveyor Corp, 10/2006

In 1970, the average city dweller was exposed to 500 to 2,000 ad messages a day; today it's up to 3,000 to 5,000.
Yankelovich, 10/2006

- Index -

Minority Entrepreneurs

  • Minority-owned businesses account for $591 billion in revenues.
  • Minorities own 15.1% of all U.S. businesses, or more than 3 million firms, and 99% of these firms are small businesses

Source: SBA, "Dynamics of Minority-Owned Employer Establishments, 1997-2001"

Minority Business Survival Rates 1997-2001
Asian Owned .................................. 72.1%
Hispanic Owned ............................... 86.6%
American Indian & Alaskan Native ............. 67.0%
Black-owned .................................. 61.0%

Source: SBA, "Dynamics of Minority-Owned Employer Establishments, 1997-2001"

- Index -

Online Business

Small Business Website Development Method
"Do It Yourself" ............................. 82.2%
Off-the-shelf software for use on PC ......... 55.9%
HTML editor .................................. 35.7%
Basic template provided by others............. 12.5%
Basic template provided by ISP ............... 7.6%
"Do It For Me" ............................... 24.6%
Website design firm/consultant ............... 17.1%
Friends/others ............................... 5.0%
ISP or ISP partners .......................... 3.0%
ISP with name registration and other services 1.0%

Source: IDC, "Web Site Development in U.S. Small Businesses" 2004

Do it Yourself Small-Business Website Locations
On server owned by company ................... 33.1%
Other third-party (e.g. Aplus.net, Verio) .... 26.2%
Space purchased from ISP ..................... 24.1%
Space provided by ISP at no extra charge ..... 10.8%
Service from firm that created site .......... 1.2%
Free service (but not from ISP)............... 4.6%

Source: IDC, "Web Site Development in U.S. Small Businesses" 2004

E-Commerce Focus: Products or Services?
  DIY DIFM
Products only ..................... 5.7% 26.7%
Mostly products, some services .... 24.7% 24.2%
Some products, some services ...... 19.2% 13.6%
Mostly services, some products..... 26.5% 16.4%
Services only ..................... 23.9% 17.2%

DIY: Do It Yourself
DIFM: Do It For Me

Source: IDC, "Web Site Development in U.S. Small Businesses" 2004

How Small Businesses Promote Their Products Online
Company website .............................. 44.2%
Email marketing .............................. 34.4%
Video/pictures on website .................... 16.7%
Banner ads ................................... 10.0%

Source: IDC, "Marketing and Promotion in U.S. SMBs" 2004

- Index -

Small Business at a Glance

Number of Businesses
  • Large businesses of 1000+ employees: 8,000
  • Midsize businesses of 100 to 999 employees: 93,000
  • Small businesses of less than 100 employees: 8.1 million
    (does not include homebased businesses)

Source: IDC, 2005

Small businesses ...
  • represent more than 99% of all employers
  • provide 60% to 80% of the net new jobs annually
  • are 53% home-based and 3% franchises
  • account for 97% of all U.S. exporters of goods
  • produce 13 to 14 times more patents per employee than large patenting firms

Source: SBA, "Small Business by the Numbers" 2004

Small businesses account for:
  • 52.6% of all retail sales
  • 46.8% of all wholesale sales
  • 24.8% of all manufacturing sales

Source: SBA, "Small Business Economic Indicators for 2003"

Small business revenue:
  • The average annual revenue of a small business is $3.6 million
  • The average annual revenue of a small business with a website is $5.03 million

Source: IDC, "Web Site Development in U.S. Small Businesses" 2004

- Index -

Small Business Finance

Small Business Financing Sources
  • More than 80% of small businesses use some sort of financing to grow their business
Credit lines, loans, capital leases .......... 55.0%
Business credit cards ........................ 34.1%
Personal credit cards ........................ 46.0%

Source: SBA, "Small Business by the Numbers" 2004

- Index -

Small Business Growth

Highest Rate of New Startups with Employees in Top Four States
California ................................... +4.0%
Utah ......................................... +3.8%
Nevada ....................................... +3.4%
Florida ...................................... +3.1%

Source: SBA, "Small Business Economic Indicators for 2003"

Survival Rate for Business Startups with Employees
2 years ...................................... 66.0%
4 years ...................................... 49.6%
6 years ...................................... 39.5%

Source: SBA, "Small Business by the Numbers" 2002

- Index -

Women in Business

  • Women own 10.4 million businesses in the United States (nearly 50% or more), generating $1.9 trillion in sales.
  • Women employ 12.8 million workers, generating 1.9(that's one in every seven employees).
  • For the past two decades, majority women-owned firms have continued to grow at around two times the rate of all firms.
  • Over half of all women business owners (57%) have a line of credit for their business and 41% have a commercial bank loan.
  • Seventy five percent of all firms do not have employees; similarly, 81% of women-owned firms also are without employees, for a total of 5.4 million firms.
  • The majority of women business owners in nontraditional industries (85%) believe there is no disadvantage to being a woman or that it is actually beneficial.
  • Women and men business owners have different management styles. Women emphasize relationship building as well as fact gathering and are more likely to consult with experts, employees, and fellow business owners.

Source: CFWBR, Center for Women's Business Research, 01/2007

- Index -

Partial List of Resources Used to Compile Small Business Facts

IDC "Marketing and Promotion in U.S. SMBs" 2004
IDC "Web Site Development in U.S. Small Businesses" 2004
IDC "U.S. Home Office 2004-2008 Forecast" 2004
IDC "Technology Use in Home Office Households" 2004

SBA "Small Business by the Numbers" 2002, 2004
SBA "Small Business Economic Indicators for 2003"

CFWBR Center for Women's Business Research
Gartner
Jupiter Research
National Retail Foundation
Nielsen/Net Ratings
OPEN from American Express

- Index -

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