How Does Your Revenue Stack Up to Other Small Businesses?

by Sandi Leyva

2 min read

If you run your own business, you’re probably slammed with work and spend long nights and weekends trying to keep your company afloat. With all this effort you put into the business, you should at least be generating a good amount of revenue. But what constitutes good revenue when it comes to small businesses? You might be very surprised at the statistics, especially if you feel like everyone else is making more than you.

Below are some interesting facts from the Small Business Administration that will help you more accurately determine where you stand.

Small Businesses With No Employees

Don’t feel alone if you don’t have any employees in your small business. Eighty percent of the 28.1 million small businesses in the United States do not have employees. On top of that, more than half of all small businesses are home-based businesses, with construction companies leading the way.

The average receipts (or revenues, not profit) of small businesses with no employees is $44,000 per year. Two-thirds of these businesses earn less than $25,000 per year.

Small Businesses With Employees

Small businesses with employees tend to fare better, with average earnings of $4.9 million per year.

Here’s the breakdown using 2007 data from SBA:

 Firms with… Average Annual Receipts
1-4 employees $387,000
5-9 employees $1,080,000
10-19 employees $2,164,000
20-99 employees $7,124,000
100-499 employees $40,775,000

 

Men vs. Women Business Owners

We all hear about the gender gap in salaries, but what about the difference between what male and female entrepreneurs earn?

In 2007, there were 7.8 million women business owners (of all sized businesses) who averaged $130,000 in receipts. On the other hand, there were 13.9 million men business owners averaging $570,000 in receipts.

Startup Statistics

If you’re starting a business, you’re not alone. In 2011, there were over 400,000 new businesses started, and the number is trending up every year.

From Receipts to What You Make

The Small Business Administration defines receipts as gross income, which is the same as gross sales or revenue. From there, costs must be deducted to calculate net income (i.e. the amount a business owner makes). When you’re comparing the numbers above to how you’re doing in your business, be sure to compare gross sales and not net profit.

Takeaways

The stats featured above aren’t meant to discourage business owners that are struggling to generate revenue. Instead, they’re meant to show that small businesses cover a wide spectrum.

In a time when the internet and our connectivity makes it possible for all types of hard workers to start and run businesses, it’s good to see the stats behind your community of entrepreneurs. The truth is that those larger businesses that average $40 million in revenues per year once had the same issues as the one-person businesses that average only $44,000 per year. So keep trucking along. And if you manage to do things right, the revenues will start to flow.

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