The small business community in the US is one of the largest in the world. There were 440,000 business applications submitted monthly between 2021 and 2023. One of the main reasons why small businesses survive in the US is the acceptance of products and services offered by local brands amongst Americans without bias. Of course, the US economy benefits greatly from the small business community too!
Here are some startling statistics about small businesses in the US.
The big small business footprint
In 2019, there were over 27 million businesses with no employees and around 6 million businesses with at least 1 employee. The total number of employees in the small business community was around 135 million. This sector had annual sales of around $8.8 trillion between Q4 2019 and Q4 2018. More than 16 million new business applications have been submitted in the last 4 years. Back in 2019, around 44% of all economic activity was generated by the small business community
The world is searching for novel and interesting solutions that solve the issues we currently face. The nation’s small business community is gearing up to address these problems with innovative and extraordinary solutions.
Survivor, small business edition
Not every small business that opens stays in operation, and not every business makes a profit. 18% of small businesses fail in their first year of operations. Another 50% of businesses fail in the first five years, and somewhere around 65% of them fail within a decade. This can be attributed to a variety of factors, including faulty ideas, poor execution, consumer awareness, market penetration, or even geographic location. Geographical barriers are gradually disappearing, and online businesses/ companies are growing, but small business failure rates remain high.
It’s the economy, still…
After COVID, small businesses made a remarkable comeback and created about 13 million new jobs to support the economy. In fact, small businesses create two out of every three jobs in the US market. According to a report, over 50% of small businesses have plans to expand their business this year as economic circumstances turn around. Around 86% of the small business owners reported that they had achieved their 2023 business goals. as inflation moderates, the year might bring even better outcomes for the small business nation.
It’s (digital) war
We cannot ignore the different threats and attacks that small business owners face in the digital age. Most small businesses aren’t digitally savvy and safety is often ignored. Back in 2017, 68% of small business owners had no worries about cyber-attacks, and most of them believed that they could easily rebound from any attack of that kind. However, that has changed dramatically. Cyberattacks can bother even the biggest giants in the industry. A few days ago, healthcare giant UnitedHealth was impacted by a ransomware attack, and news of cyber threats has remained in the headlines. A report in Australia suggested that there are around 144 online cybercrime reports in a day, with around 43% of these attacks being directed at the small business community. The condition is similar in the American community, and small businesses should take some precautionary measures to survive the attack like cyber insurance.
Taking to technology
The world needs technological advancements. So, how can a small business keep up with the changing technological landscape? By diving in, that’s how! According to reports, 95% of US small businesses use at least one type of technology platform. Regulations are catching up too. For example, the new Artificial Intelligence Regulation Act in the EU. The effects of this could potentially be felt globally regarding the responsible use of AI. One thing is certain: technology will play a major role in the future, and an increasing number of small businesses will take advantage of it.
Sustainability in the sights
Another popular trend in the US economy right now is sustainability. Every year, small and new enterprises emerge with products and solutions that keep the whole world in mind. Big and small businesses are searching throughout the value chain for suitable substitutes for wasteful or harmful approaches. As the market tilts toward sustainable practices, small businesses get new opportunities to penetrate new markets.
Show me the money
The future appears to be bright for US-based startups and small businesses as economic conditions improve. The US government is doing a great job as well, supporting the community of small businesses. The US government offers a range of grants and runs programs for small businesses. In 2023, US-based startups were awarded approximately $138 billion. Investments fell last year, but they may increase this time around.
The assurance of insurance
Small businesses must constantly address and reassess certain fundamental and essential insurance needs. Over 90% of small business owners surveyed in a recent report expressed doubt about whether their company had the appropriate insurance. A large number of surveyors lacked sufficient understanding of fundamental insurance models and specifications. As the US is continuously impacted by natural disasters, cyberattacks, and economic upheavals, it will be crucial to concentrate on developing reliable insurance protection. A small business cannot hire full-time experts to provide guidance, or they cannot focus on too many aspects of their business. However, one thing that can be done is to have a comprehensive risk assessment performed frequently by experts, to monitor the company’s insurance health.
We at Gonzalez Insurance understand the requirements of a small business very well. We understand that small businesses cannot be burdened with a one-size-fits-all insurance portfolio. They require customized insurance bundles based on their specific business needs. We can offer customized plans after doing a portfolio analysis for each small business. So that you are never over or under-insured. Get in touch with us to learn more.