Small Business Revenue Statistics: Annual Sales and Earnings

1. Small businesses with no employees have an average annual revenue of $46,978.
2. The average small business owner makes $71,813 a year.
3. 86.3% of small business owners make less than $100,000 a year in income.
4. Small business owners who are self-employed by their own incorporated businesses made a median income of $50,347 in 2016.
5. In 2016, the number of nonemployer firms making $1 million to $2.49 million in revenue increased from 35,584 to 36,161—a 1.6% increase.
6. On average, businesses with less than $5 million in annual revenue saw a 7.8% jump in annual sales in 2015.
7.  In 2007, women small business owners averaged $130,000 in revenue, while male small business owners averaged more than four times that with $570,000.
8.  In one study, 82% of businesses that failed cited a lack of cash flow as a factor in their demise. 

We’re surrounded by small businesses. Whether you realize it or not, you interact with them every day and they shape your life and the way you live it. With 30.2 million small businesses in the U.S.—which account for 99.9% of all businesses in the country—it’s no surprise they employ nearly half of the country’s workforce. 

With that said, you might be curious about the finances behind these businesses. The revenue of small businesses every year is noted by the Small Business Administration, and additional information can be gleaned from census records and other resources. Here are some small business revenue statistics to give you a more complete picture of how small business fare in the U.S.

When we talk about the average annual revenue of small businesses, what we mean is the amount of money the business is bringing in. By that, we mean how much money the business makes before accounting for things like expenses and taxes. Sometimes revenue is referred to as the “top line” because it appears on the first line of a small business’s income statement, with the breakdown of everything else below this number. 

The average annual revenue of a small business then is the average amount of money those businesses bring in as a whole. The U.S. Census lists revenue as “receipts” and that includes “gross receipts, sales, commissions, and income from trades and businesses, as reported on annual business income tax returns.” [1] For nonemployers in the U.S. the average annual revenue comes out to $46,978. [2]

So if you were under the impression that all small business owners are millionaires, or were hoping to start a business of your own to make your fortune, be aware that that’s usually not the case. For the average business owner, their annual revenue is a much more modest sum. Plus, keep in mind that revenue is before expenses and taxes are deducted.

However, larger small businesses—namely, those with employees—tend to fare better. Business owners with employees average more in revenue than those that are considered nonemployer businesses. It probably comes as no surprise, but usually the more employees a business has, the more they make in revenue on average—which allows them to afford to hire employees.

In 2007, businesses with one to four employees averaged $387,000 in revenue per year, while those with five to nine employees averaged $1,080,000. And the numbers continue to increase from there: Small businesses with 10 to 19 employees averaged $2,164,000 in revenue, those with 20 to 99 employees averaged $7,124,000, and coming in on top are companies with 100 to 499 employees averaging $40,775,000 in revenue. Now those numbers are not insignificant.

Before you lose hope that you’ll never make millions as a small business owner, we have some good news for you: The number of nonemployer businesses, or one-person businesses, that reach $1 million in revenue is increasing. In 2016, the number of nonemployer firms making $1 million to $2.49 million in revenue increased from 35,584 to 36,161—a 1.6% increase. [3]

While less than 2% of single-person businesses becoming millionaires may not seem like uplifting odds, that is incredibly impressive considering just one person is in charge of everything from production to marketing to sales—and everything in between.

Small businesses can be a key source of income for some business owners, in fact, a report of nonemployer businesses showed that two-thirds of them provide the primary source of income. [4]

Small business owners who are self-employed by their own incorporated businesses made a median income of $50,347 in 2016. Those who are self-employed by unincorporated firms made a median income less than half that, at $23,060. [5]  The SBA looks specifically at median income, so for averages we have to turn elsewhere. 

A study we did of hundreds of business owners found that 86.3% of small business owners make less than $100,000 a year in income, while Payscale reported that the average small business owner makes $71,813. [6]

The average salary of a small business owner varies by industry too. For instance, Payscale found that retail store owners make an average of $50,454 [7] while construction business owners make an average of $72,346. [8]

On average, businesses with less than $5 million in annual revenue saw a 7.8% jump in annual sales in 2015. [9] That level of growth was a percentage point above the 2014 estimates and small businesses in three fields—construction, health care, and food and accommodation services saw the most accelerated growth during that time.

Not only are there fewer female than male business owners, women also bring in less money in receipts each year. In 2007, there were 7.8 million business owners who were women, compared to 13.9 million men. Women averaged $130,000 in revenue, while men averaged more than four times that with $570,000. [10]

Money is the key to keeping your business, well, in business. According to one study, 82% of businesses that failed cited a lack of cash flow as a contributing factor to their failure. With that percentage, cash flow is the number one reason businesses fail. The failure of a business can be a combination of several smaller problems, like running a seasonal business or entering an oversaturated market, but the underlying problem comes down to the same issue: a lack of money. 

If you haven’t started your business yet, conduct a cash flow analysis to foresee anything that might get in the way of healthy profits and make sure there’s a definite demand for the goods or services you’ll be providing.

While some small businesses do make it big (after all, some business owners are making millions), that certainly isn’t the norm for most business owners out there. After examining the revenue and income of businesses and their owners, it’s clear that while many may be successful, the small business revenue statistics show that most business owners bring in much more modest earnings.

The thing to remember here is that while you might not be bringing in a ton of money, many businesses do fairly well for themselves and are able to remain open and running. In fact, about 80% of businesses survive their first year, and about 50% make it to five years. [11] Also, as we mentioned, the main reason businesses fail has to do with a lack of cash flow. If you’re considering starting a small business of your own, use these small business revenue statistics, as well as this additional information to make informed decisions and a strong business plan to make your business a success.

Small Business Revenue Statistics Resources:

1. https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=NES_2016_00A2&prodType=table
2. https://www.forbes.com/sites/elainepofeldt/2019/06/27/million-dollar-one-person-business-revolution-accelerates/#7abf78c64526
3. https://www.forbes.com/sites/elainepofeldt/2018/06/21/why-more-americans-are-breaking-1-million-in-one-person-businesses/#58f71bf2616b
4. https://www.newyorkfed.org/medialibrary/media/smallbusiness/2015/Report-SBCS-2015-Nonemployer-Firms.pdf
5. https://www.sba.gov/sites/default/files/advocacy/2018-Small-Business-Profiles-US.pdf
6. https://www.payscale.com/research/US/Job=Small_Business_Owner/Salary
7. https://www.payscale.com/research/US/Job=Retail_Store_Owner/Salary
8. https://www.payscale.com/research/US/Job=Small_Business_Owner_%2F_Operator/Salary/b53d6869/Construction-Estimating
9. https://www.abrigo.com/blog/2016/02/10/the-state-of-u-s-small-businesses/
10. https://quickbooks.intuit.com/r/money/how-does-your-revenue-stack-up-to-other-small-businesses/
11. https://www.fundera.com/blog/what-percentage-of-small-businesses-fail

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