Last week was National Small Business Week, which went virtually unnoticed by most business owners who were busy working. The Small Business Administration and big brands try so hard to celebrate small businesses with events like these. But what they miss are a few sobering facts.
According to Pew Research, almost two-thirds of our country’s 33m small businesses have fewer than four employees, with most of them being solely owned and operated.
Yes, the number of startups grew during and in the immediate aftermath of Covid. But these are mostly freelance, side gig or independent “businesses” for workers who need extra money.
Is a side gig a small business? Maybe? To me, a real business is an employer-owned business, one that has paychecks and workmen’s compensation and HR policies. According to the US Census Bureau, there are only about 7m employer-owned companies in the country. That’s a far cry from 33m.
Black-owned businesses are regularly featured in TV shows, but according to Pew Research, 85% of our nation’s business owners are white and 76% are men. And more than half are over the age of 50.
According to research from the financing site Fundera, small businesses with no employees have an average annual revenue of $46,978, the average small business owner makes $71,813 a year, and 86.3% of small business owners make less than $100,000 a year in income.
Not a week goes by for me without getting some survey or research gauging small business “optimism” or “sentiment”, and they’re all in conflict. The National Federation of Independent Businesses says that small business confidence is the lowest it’s been since 2012. The US Chamber of Commerce says that small businesses see a “stable” economic environment. Latino business owners are showing a “growing optimism” according to Verizon. A poll of 500-plus business owners from a marketing firm “paints a picture of cautious optimism and resilience”. The messaging platform Slack says that many small business owners are calling 2024 a “make or break year”. Republicans say small businesses are struggling. Democrats say they’re doing just fine.
Just as opinions differ for the economy and the weather, no one really knows how small businesses in this country are doing. And you can’t blame them – we live in a big country. A roofing company can be crushing it in Texas yet a similar company can be struggling in Wisconsin. A tech company may be facing cashflow issues where an energy company is flush. You can’t just generalize.