How Much Do Small Businesses Make?
Small businesses are a major cog in the economy. They can take many forms, from mom-and-pop shops to private law firms and restaurants.
Money is important to small business owners, but it’s not the only thing that drives them. They’re also driven by the satisfaction of creating their own destiny and taking their businesses to the next level.
Average Revenue for Small Businesses
Many small business owners dream of becoming millionaires through their business. In reality, however, most small businesses only bring in enough revenue to pay for their expenses.
Depending on the industry, how large a company is and whether or not it carries any unearned revenue (money that has been received but not yet delivered), gross revenues for small businesses vary. The number of employees also plays a big role in how much a small business makes.
In general, the average revenue for a small business with a single owner/employee is around $44,000 per year. This figure increases as the number of employees rises. Companies with up to four employees bring in an average of $387,000, while those with five to nine employees make $1,080,000.
Similarly, the average revenue for a small business that has 10-19 employees is $2,164,000 and those with 20-99 employees break seven million on average. Of course, these figures are just averages and not indicative of every small business.
Average Revenue for Non-Employer Small Businesses
A small business’s annual revenue is the total amount of money it brings in. This number is also called “receipts,” and it includes sales, commissions, gross receipts, and income from businesses and trades, as reported on the company’s tax returns.
As of 2007, small business owners with one to four employees brought in $387,000 on average, while those with five to nine employees had revenues of $1,080,000. These numbers increased significantly the more employees a business had, with companies with 10 to 19 employees bringing in $2,164,000 and those with 20-99 employees breaking $7 million on average.
However, revenue isn’t everything when it comes to small business ownership. Even if you bring in a million dollars in revenue, it doesn’t necessarily mean your business is profitable. Ultimately, how much you make as a small business owner depends on your industry and location. It also depends on the type of legal entity you operate your business under.
Average Revenue for Employer Small Businesses
There are a lot of things that can affect the amount of revenue small businesses make. For instance, the industry they operate in can play a role in how much they make. And, the number of employees a business has can also affect its revenue.
Small business owners can make quite a bit of money. However, it is important to remember that the revenue a small business makes does not necessarily translate into profit. Oftentimes, the owner of a small business uses their company as a source of income and may not take home much more than what they are making in revenue.
Small businesses exist in nearly every industry. Freelance writers, retailers, hairdressers, tax experts and private-practice doctors all qualify as small business owners. As of 2007, small companies with one to four employees brought in an average of $387,000, while those with five to nine employees saw their revenues jump to $1,080,000. And, companies with ten to 99 employees bring in an average of $2,164,000 per year.
Average Revenue for Non-Employer Non-Employer Small Businesses
As the name suggests, non-employer small businesses do not have employees and as such they bring in less revenue than small businesses with employees. However, they still make a decent living for themselves. The amount that they earn depends on their industry. For example, retail and construction companies bring in more than businesses that specialize in technology or food and accommodation services.
Business owners with a single employee make the most money as they bring in an average of $44,000 per year. This figure increases as the number of employees grows with small businesses that have one to four employees bringing in an average of $387,000 in revenue.
It is also worth noting that there is a difference in the amount of money that male and female business owners make. As of 2007, male business owners brought in an average of $570,000 in annual revenue whereas women brought in $130,000. This is a significant difference and is something that needs to be addressed.