Tuesday, May 26, 2020

Much Small Business Spending is Essentially Similar to Consumer Spending

There’s a reason tier-one service providers often report small business revenue in a “mass market” category with consumer accounts. Very-small businesses tend to buy consumer connectivity products, with buying processes very similar to that of consumers. Some surveys of small business suggest just 10 percent of such firms generate $500,000 or more of annual income.


source: Business Knowhow


According to the U.S. Census Bureau, there were about 7.6 million employer firms (businesses with employees) operating in the United States in 2017. Of those businesses, 89 percent have fewer than 20 employees.


According to statistics from the US Small Business Administration's Office of Advocacy, 81 percent of small businesses are classified as nonemployers because they have no employees. 


Possibly 40 percent of SMBs had annual revenue less than $100,000 in 2013, according to Parks Associates. Perhaps another 30 percent had annual revenue of less than $500,000. 


According to the U.S. Census Bureau, perhaps 26 percent of U.S. small businesses generated more than $1 million in annual revenue. 


source: U.S. Census Bureau


source: Parks Associates


One often hears rather big numbers where it comes to the number of SMBs. But a huge percentage of total businesses actually are very small, home-based businesses with no employees. 


source: the kickassentrepreneur


Average small business owner salaries were about $66,000 annually, according to PayScale, which gives you some idea of likely profits from many small businesses.  


The point is that much small business connectivity spending is not going to be that different from consumer accounts.


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