2024 Small Business Revenue Statistics
Last Updated July 26, 2024
Small businesses play a critical role in our local and global economies, but it can be difficult to make informed business decisions without having benchmarks or statistics to base your decisions on. We have put together some key small business revenue statistics to give business owners an idea of how their companies stack up against national averages and trends.
Small Businesses Make Up 99.9% of All U.S. Businesses
Small businesses are the backbone of our economy, making up 99.9% of all business nationwide. In total, 61.7 million Americans work for a small business, making up an astonishing 45.9% of the total workforce.
The number of small businesses (both employer and nonemployer firms) has increased over the last few years, and small businesses have even been responsible for 62.7% of net new job creation since 1995. Most recent data shows that amongst these small businesses, 80% of them are nonemployer firms, meaning they do not have any paid employees.
Average Small Business Owner Salary
According to PayScale, the average small business owner takes home a salary of $69,301 per year. However, this figure varies greatly on a case-by-case basis, as the top 10% of owners make more than $150,000 annually while the bottom 10% makes $30,000 or less per year.
However, there is quite a bit of variance from source to source regarding small business owner salary statistics. For example, Zippia reports that the average business owner salary is $50,934 per year, while Comparably reports the average small business owner makes $80,469 per year. Even still, Fundera found that 30% of small business owners decide against taking a salary entirely, and 86% take a salary of less than $100,000.
Nonemployer Business Statistics
A nonemployer business is one that has no paid employees and makes more than $1,000 per year in revenue. According to fedsmallbusiness.org, there are 27.1 million nonemployer businesses nationwide, making up 82% of all registered small businesses.
Average Annual Revenue for U.S. Nonemployer Businesses
Based on data from census.gov, the average revenue for a US nonemployer establishment was just under $49,489 in 2019, up 1.38% from 2018.
Additionally, there is quite a bit of variation in the average revenue of establishments by industry. For example, businesses in the real estate, rental, and leasing industry bring in 106% more revenue, on average, compared to the cross-overall nonemployer average. Other higher earning industries include wholesale trade (+97%) and finance/insurance (+71%).
There are more industries that earn below the overall average than those that earn above it. The lowest earning industries include educational services (-70%), administrative, support, waste management, and remediation services (-51%), and arts, entertainment, and recreation (-44%).
| Industry | Average Revenue | Compared to the Overall Nonemployer Average |
|---|---|---|
| Real estate, rental, and leasing | $102,040 | +106.2% |
| Wholesale trade | $97,685 | +97.4% |
| Finance and insurance | $84,664 | +71.1% |
| Mining, quarrying, and oil and gas extraction | $68,949 | +39.3% |
| Utilities | $68,796 | +39.0% |
| Construction | $65,051 | +31.4% |
| Manufacturing | $54,083 | +9.3% |
| Professional, scientific, and technical | $49,077 | -0.8% |
| Agriculture, forestry, fishing, and hunting | $47,742 | -3.5% |
| Retail trade | $44,826 | -9.4% |
| Transportation and warehousing | $43,671 | -11.8% |
| Information | $40,170 | -18.8% |
| Accommodation and food services | $39,171 | -20.9% |
| Health care and social assistance | $35,786 | -27.7% |
| Other services (except public administration) | $31,886 | -35.6% |
| Arts, entertainment, and recreation | $27,506 | -44.4% |
| Administrative, support, waste management, and remediation services | $24,132 | -51.2% |
| Educational services | $15,110 | -69.5% |
78% of US Nonemployer Establishments Make Less than $50,000 In Annual Revenue
Even though the average nonemployer revenue is $49,489, more than three fourths of nonemployer establishments make less than $50,000 per year (census.gov).
However, there is still an opportunity to bring in quite a bit of revenue as a nonemployer business; 1.3% of nonemployers bring in more than $500,000, and 0.2% bring in more than $1 million per year.
| Annual Revenue | Number of Establishments | Percent of Establishments |
|---|---|---|
| > $1,000,000 | 45,953 | 0.2% |
| > $500,000 | 358,375 | 1.3% |
| > $250,000 | 1,052,664 | 3.9% |
| > $100,000 | 3,201,418 | 11.8% |
| > $50,000 | 6,064,822 | 22.4% |
| < $50,000 | 21,039,184 | 77.7% |
| TOTAL ESTABLISHMENTS | 27,104,006 | 100.0% |
When breaking down the nonemployer average revenue by entity type, we found that sole proprietorships make $35,897, on average, which is 28% less than the overall nonemployer average. On the flipside, S-corporations, partnerships, C-corporations, and other corporate legal forms of organization each make more than $100,000 in revenue, on average, per year.
Nonemployer Business Owners Often Lean on Personal Funds
Most nonemployer entrepreneurs—65%—rely on their personal funds to alleviate financial struggles, according to recent findings.
This is likely because these small businesses have the hardest time qualifying for traditional bank loans or other standard forms of financing. Among the 27% of nonemployer businesses that applied for financing, only 38% were approved (fedsmallbusiness.org).
Women-Owned Businesses Make 44% Less Revenue Than Male-Owned Businesses
Small and medium-sized businesses owned by women earned, on average, 30% less revenue in 2021 compared to men-owned businesses ($263,091 vs. $469,372). According to Biz2Credit, despite there being a significant lack of parity in key financial metrics between women and men-owned businesses, women-owned businesses saw stronger year-over-year growth in average earnings (annual revenue – operating expenses) with a 27% YoY growth compared to 22% growth. Despite this growth, average earnings for women-owned businesses was still 47% less than for men-owned businesses.
According to CNBC, “The male advantage can be attributed to the fact that they have been in business longer, and these entrepreneurs have had time to develop strong networks in industries like IT, construction and logistics.” While men-owned businesses continue to outpace women-owned business performance, economists believe that parity could be just a few years off.
On Average, Small Businesses Are Paid 1 – 2 Weeks After the Invoice Due Date
Late invoice payments can be detrimental to small businesses, and according to Chaser, small businesses are paid more often than not after the invoice due date. Solo business owners are most likely to get paid prior to the invoice due date, while companies between 2 and 50 people are least likely to get paid on time amongst small businesses.
So how do these late invoice payments impact revenue? According to QuickBooks, businesses under 500 people were owed, on average, $304,066 in late payments. Not only that but late invoice payments resulted in 89% of small and medium-sized businesses to say that they prevented business growth.
Cash Flow Is the No. 1 Reason Why Small Businesses Fail
Small business survival rates are always a point of interest when starting a new business. According to the Small Business Administration’s Office of Advocacy, 68% of small businesses survive their first two years, and nearly half survive for at least five years. However, survival rates drop off pretty drastically once businesses reach the decade mark with only 34% surviving at least 10 years and 26% surviving at least 15 years.
The primary reason new businesses fail? 82% of startups cite cash flow problems as the reason for closing (Visual Capitalist). While this can sound intimidating, there are plenty of ways to combat cash flow issues, including:
- Collecting invoice payments as quickly as possible and paying vendors as slowly as possible
- Doing credit checks on your customers to ensure they are creditworthy and increase the likelihood of on-time payments
- Increase working capital through an alternative financing method, such as invoice factoring or invoice financing
- Lease equipment instead of purchasing it outright
- Offer early payment discounts
For more ways to improve cash flow, check out our article.
What Do These Small Business Revenue Statistics Mean for You?
These small business revenue statistics may make starting a company sound daunting, but they are important to review to help you make solid business and financial planning decisions. Starting a business is hard work and modest earnings may deter you, but becoming an entrepreneur can be an incredibly rewarding experience. Now that you are equipped with industry benchmarks and nationwide trends, you are better prepared to enter the entrepreneurial market.
Below are some resources that can help you get started with your small business:
- Ways to Fund a Business Without a Loan
- Cash Flow Risk Management and How to Reduce It
- Cash Flow Management for Small Businesses
- How to Do a Budget Analysis for Your Business
Small Business Revenue Statistics FAQs
What is the average annual revenue for small businesses?
The average annual revenue for small businesses varies significantly, ranging from anywhere between $1 million to $41.5 million per year.
Per Zippia, businesses with 1-4 employees bring home $347,000 per year, businesses with 5-9 employees have a return of $1.08 million per year, and businesses with 100+ employees bring in $40.77 million annually.
What states have the most small businesses?
According to the U.S. Small Business Administration, the states with the most registered small businesses are California (4.1 million), Texas (3.2 million), and Florida (3.1 million).
What are the best states to start a small business in 2024?
The best states to start a small business—based on cost, access to resources, and overall business environment—are Utah, Georgia, and Florida.
What states have the most small business growth?
According to the U.S. Chamber of Commerce, the states with the highest increase in registered small businesses from 2022 to 2023 were Colorado, North Dakota, and Iowa.
What is the average small business loan size?
The most recent data revealed that the average small business loan size is $52,158, per a small business lending survey conducted by the FDIC. However, this figure can change significantly from year-to-year based on market and economic trends.
What percent of small businesses fail within their first year?
According to the Bureau of Labor Statistics, 23.2% of U.S. small businesses that opened in March 2022 were closed by March 2023.
What is the small business success rate?
The U.S. Bureau of Labor Statistics’ most recent data shows that 76.8% of small businesses made it to the 1-year mark, while 34.7% of small businesses make it to the 10-year mark.
Angela is the Director of Online Marketing at altLINE where she manages content production, marketing and sales operations, and digital PR. Angela joined altLINE in 2022 after several years of working in digital marketing across various industries including financial services and B2B. Angela loves creating content that helps readers better understand their financing options and helps them make informed decisions about factoring. Her work has been featured in publications like Search Engine Journal and Moz.
