Small businesses are everywhere and with the newly surged age of startups, the trend continues to grow on a global scale. The success of small businesses has advanced to a point that their influence is shifting the paradigm of achievement. The year 2017 marks the highest rate of success, 79.9% of business startups survive their critical first year in business, which is the lowest percentage of business failure rate in a decade.79.9% of business startups survive their critical first year in business, which is the lowest percentage of business failure rate in a decade.
A new study from the Small Business Association (SBA)has brought small business owners, as well as all who support us a wealth of good news. According to the encouraging survival rate of new businesses, job creation, and the employee retention rate, the SBA has highlighted enormous growth for the collective small business entity.
Small businesses, or businesses that have less than 500 employees, as per The Office of Advocacy, were a revolving door, often of disappointment, for aspiring entrepreneurs. Small businesses had a high rate of failure that seemed top heavy and insurmountable. Even with a good handle on business and a great idea, many small businesses wouldn’t last a year, much less the three, five or ten years that a business’ success is gauged by.
However, with this new information released by the SBA, the trend seems to be taking a turn for the better. With 406,000 new businesses starting annually in the US, the survival rate for the is over half. At fifty-one percent, it means that over 203,000 new businesses will continue throughout their first five years.
The second hurdle indicates that thirty-three percent of those businesses will survive for a decade. That means that nearly 67,000 new businesses formed annually will have a legacy of at least a decade.
That is an excellent statistic, considering the seemingly insurmountable odds that have plagued small business over the generations.
That number is no longer a longshot, it’s an achievable, quantifiable goal.
Job creation has always been a thorn in the side of the American people. There never seemed to be enough jobs to cover the vast amount of unemployment that inundated the nation.
Thankfully, with the rise of small business success, job creation is also seeing an influx.
According to the SBA, small businesses have created sixty-percent of net new jobs, with over ninety-nine-percent of US firms considered to be a small business.
Now, while this is encouraging, at first glance these numbers seem strange. If there are so many small businesses, shouldn’t the small business percentage of jobs be even higher?
The reason this isn’t the case, however, is because businesses are always converting their business status. Since the business status is determined by the number of employees a firm has, an increase in employees potentially breaks the business out of the category of becoming a small business; though that is only another indication of success.
Having a high turnover rate in any business is not something that any business strives for but for small businesses, it can be especially detrimental.
Fortunately, with the number of small business that hire employees reaching over ninety-nine percent, it gives the impression that the employee retention rate is also on the rise.
This comes to no surprise for us, however, since we know that most of the time, working in a small business is far more rewarding than working for a typical corporation. Small businesses are generally a more welcoming and appreciative environment, which makes people want to stay with the business and help it prosper.
To close, this new information from SBA is wonderful encouragement, not only for the small businesses owners but also for the communities they serve.
For more information about how to help your business succeed, check out my website.
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About the Author:
Marsha Kelly sold her first business for more than a million dollars. She has shared hard-won experiences as a successful serial entrepreneur on her Best4Businesses blog, where she also regularly posts business tips, ideas, and suggestions as well as product reviews for business readers. As a serial entrepreneur who has done “time” in corporate America, Marsha has learned what products and services really work well in business today. You can learn from her experiences to build your business.