Don’t let the word, “statistics” scare you. This will not be an advanced math class. It will, however, provide useful information about other small businesses like yours. This is how you can learn tips and tricks to make your own company thrive.
Take Some Tips From Other Businesses
Learning lessons from your errors is good; avoiding mistakes by learning from other businesses is even better. The following statistics might help you do just that.
Start your business with your eyes wide open
If you haven’t opened the doors to your business yet, the following facts can provide a bit of extra wisdom that helps ensure that you do it right.
- About 66 percent of small businesses survive their first two years. but only half of them survive five years. These numbers are across industries, so they illustrate the importance of a good business model and smart activities. If you start with a well-considered plan, your business can become part of a positive statistic.
- Having two founders significantly increases the chances of success. This makes sense. For one thing, two founders raise about 30 percent more money than one founder raises. And, when it comes to making decisions, two heads with unique viewpoints are better than one.
- Individuals who previously started a successful business fare better on a second try. They have a 30 percent chance of success for their second try. Even individuals who failed at a previous business have a 20 percent chance of success when they try again. Failure teaches great lessons.
- Nearly 70 percent of businesses start as home-based businesses. Clearly, the majority of startups don’t initially require big warehouses or manufacturing facilities. Of course, if you need a more professional flare occasionally, leasing space in a co-working facility can provide an affordable option.
- There are about 1.4 million U.S. businesses owned by spouses. But, businesses that are owned by spouses or even close friends can fail (along with the relationships). Before forming such a partnership, make sure that you understand the risks — and potential rewards.
- Small business owner responsibilities are numerous. About 66 percent of owners handle three or more of the following: operations, finance, sales, marketing, human resources, customer service, product development, and IT. In other words, don’t plan on focusing solely on your passion when you start your company.
Consider a range of financing options
Most small businesses rely on financing, whether they need funds in the early days, or even to make major capital expenditures down the road. While you might seek private investors, the following statistics apply to bank-related lending.
- Large banks only approve about 24 percent of small business loans. On the other hand, small banks approve at a higher rate of nearly 50 percent. Even if you need a loan to avoid taking on equity investors, don’t forget about your local small banker.
- As many as 62 percent of small business owners don’t know that their companies have a credit score. And, 82 percent of them don’t know how to interpret their scores. To find out your business’ credit score, you may have to go to all three sources (Experian, Equifax, and D&B) to see if it’s listed. If so, you’ll have to pay for the reports, but it’s worth it.
- Recent numbers show about 13.9 million small business credit card accounts in use. By 2022, credit card purchase volume is expected to rise from $493 billion in 2017 to $686 billion. Although business credit cards generally carry higher spending limits and lower interest rates than consumer cards, they don’t offer the same consumer protections. Nearly 90 percent of small businesses still seek loans and lines of credit. Only 30 percent turn to credit cards. As a general rule, you’re probably better off following the more common financing practices when planning major expenditures.
Digital marketing is vital
Regardless of industry, virtually every business should engage in some form of online marketing. If your business is hiding from the Web, then it’s time to learn how to do it — and how to get the most out of it.
- Only about 60 percent of small businesses have established an online presence. Yet, about 83 percent of small businesses that have websites recognize their competitive advantage. Regardless of your industry, you need a website. Blogs and social media participation help to bring your business into the light, as well. You can contract out for these services, and the expenditure is probably an important investment.
- About 56 percent of all internet traffic comes from mobile devices. If your website is designed for display on a standard computer screen, tablet and smart phone users might not get a meaningful view of it. It is possible to design your website to automatically adjust to other screen sizes using a technique known as responsive design. Make sure that your web designer knows how to do this.
- According to one survey, about half of small business owners do not know the ROI for their marketing efforts. About 14 percent of them were aware that they didn’t know the effectiveness of their marketing efforts. Clearly, anyone who carefully watches the budget should not spend money unnecessarily, so keep a close eye on the results of every marketing effort. If the data shows that it doesn’t bring in more business, then try something else until you get the desired results.
Numbers That Help Your Business are Always Worthwhile
Hopefully, you have gained some new and useful knowledge from the preceding statistics. Maybe you can even see that data is interesting and helpful. I encourage you to spend some time online regularly reviewing other business statistics. Every number can provide ideas, while helping you learn from other businesses to take the right path when making decisions.