Who Are Small Business Owners in America?

In this video, Matt reads through an article that dives into the qualities that small business owners have in 2024. Watch Matt and his take on the article as he goes one by one on some different areas that encompass owning a small business.

Video Transcript: 

Matt’s Review:

This article is about who are small business owners in America. There are 33 [million] small business owners. And this is the businesses with fewer than 500 employees. Well I mean really when you think about small business, when I think about small business, what I think the average person thinks about small business, they think about businesses that are either one-person businesses or maybe up to 10 employees. At 10 employees still pretty small. Business owners still very likely involved day to day. As you get bigger, the owner may be less involved There may be partners, there may be, you know, management team. And certainly, by the time you get to 50 employees, it’s a pretty good size business. So going up to 500, I mean for government purposes maybe that makes sense, but I don’t think anyone else thinks of a business with 450 employees as a small business. Oh, it kinda talks about the number of businesses – well here’s a chart. Where of the 33 million small businesses, 93.8% of them have zero to nine employees. And 5.5%  of them have 10 to 99 employees. And literally 0.5% of all the businesses in the US only, you know, have 100 or more employees. And 0.1% have more than 500 employees. So it very quickly tops out at under 9 employees. 

The average age of a small business owner is, let’s see, 51% start when they’re 55 years old or older. So I guess the point being you’re never too old to start a business. 6% start when they’re 34 and under. 43% start between 35 and 54. So I guess I was an exception cause I started before I was 34. But I think a lot of times you – when you’re in your 20s and even early 30s you don’t have enough experience, you don’t have enough skills, you don’t have enough confidence, you don’t have enough capital to launch your own business. It becomes challenging. So it makes sense to me that people as they get older, they have business experience, they know what they wanna do, and they have some money and savings set aside, that’s when you can start a business. 

How many hours do small business owners work? 58% work at least 50 hours a week. Only 57% take vacations. Of the 57% who take vacations, 67% check in to work at least once a day. well, I think that’s probably true, but it’s also a problem. I mean if you’re a solo business owner then, yeah, working a lot of hours is the only way to get it done sometimes. Cause there’s no one else to delegate to. But if you’re in that even two or three employee situation, then I think you really should start striving for that work-life balance. Try to cut yourself off at 40 hours a week. And try to take some weeks off every year. Otherwise, you get burned out. and no matter how well the business is doing, you decide you wanna sell it or close it down and do something else cause you just never get a day off. But I think a lot of people don’t ever get to that cause they don’t set it as their goal. If you set your goal to be where you can take time off, delegate work, have employees, stick to 40 hours a week, and have some vacation, then you can get there. But if you don’t set that as your goal, it’s probably never gonna happen on its own. 

How much do small business owners make? Average income is 70,781 annually. I don’t know if that’s – if they’re – where they’re getting that number if they’re taking off tax returns. The one of the benefits of being a small business owner a lot of times is that you can write things off. The business pays for them. It looks like an expense from a business standpoint. Doesn’t show up on your tax return as income. But you get the benefit of it as the business owner. So if that’s a tax return number it’s probably on the low side. If they actually survey people to find out how much they’re getting from their business, you know, it might be closer to the right number. 

Who is a small business owner? No, they don’t really say. Really I mean anybody could be a small business owner. A lot of people get into it cause they have a certain skill they’re working a job and they decide to freelance and then it turns into a business. Or they decide they wanna take over their boss’s business, or something like that. A lot of people don’t plan to be entrepreneurs it’s just something that happens to them. I was probably somewhat unique that way and I really wanted to be an entrepreneur so I figured out a way to make it happen. But a lot of people fall into it. And that’s great. The downside is, if you get into it by accident, you’re not intentional about it, you’re not thinking about how to best run a business, not just do the thing that you’re doing that you charge people for that seems like a business. It’s not gonna go nearly as well. And you’re not gonna get as much out of it. And you’re gonna be one of those people working 50 or 60 hours a week. So it’s great to be an entrepreneur but be intentional about it, set goals, set boundaries, and make the most of it.