The small business owner is the fuel which powers every economy. This is especially true in an economy like that of the United States. These are the businesses that hire employees, spend locally, and take care of the well-being of the economy. Yet the small business owner demographics show that changes may be coming in the future.
52% of small business owners in the United States are between the ages of 50-88.
These demographics also show that minority groups are struggling to become small business owners in the United States. White/Caucasian business owners make up 85% of this population group. This means minorities and Hispanics are more likely to become employees than small business owners and that can have a trickle-down effect on many local economies.
Who Is The Average Small Business Owner?
- Men [65%] are more likely to own and operate a small business when compared to women [35%].
- Only 16% of small businesses today are owned by individuals who are under the age of 35.
- In 2013, 9% of small business owners in the United States were military veterans, which is almost double the percentage of veterans who are working as employees.
- More than 67% of small business owners are married.
- Business owners are more likely to have a bachelor’s degree or higher education level than employees.
- 9% of small business owners in the US are in the country on a visa or work permit.
- 77% of small business owners own their home.
- About 4 out of 5 small business owners locate themselves in metropolitan areas for the best chances of success.
- Hispanics are 25% less likely to be small business owners, but Asians are 51% more likely to be small business owners.
One of the faithful components of the American dream is to build for oneself a journey toward success. It is said that it doesn’t matter who you are or from where you come, the US is the place where you can find that success. Unfortunately if you happen to be a young woman in a minority demographic, the odds are stacked against you in this data for you to become a small business owner. Maybe anyone can own a small business, but if you’re an older Caucasian/White male, you’ve got the best chances to see that dream become a reality.
Does Being A Small Business Owner Bring Affluence?
- 99.7% of the businesses in the United States qualify as being a small business, which totals about 23 million businesses in total.
- Small business owners have an income which is 21% higher on average than workers who prefer to remain employees.
- 75% of small business owners have a home that is valued at $500k or more.
- 30% of small business owners regularly enjoy activities such as boating, golfing, or foreign travel.
- Small business owners are 45% more likely to reside in the highest wealth classes and 2% less likely to reside in the lowest wealth classes.
- Small business owners are 25% more likely to have children and 20% more likely to be in a household with a male head of the household.
We embrace the ideas of the entrepreneur and the youthful energy of the freelancer, but the typical small business owner tends to come from a traditional household. They are married, typically follow conservative values, want to own their own home if they don’t have at least one home already, and desire to leave a legacy for their children. These facts apply to all of the age, racial, and ethnic demographics in this category. This leaves one inescapable fact: if you own your own small business, then you’ve got the best chance to chase your dreams.
How Small Business Owners Are Finding Success
- Small business owners are 54% more likely to be regularly engaged with their email than the general population.
- 30% of small business owners will spend more time online, working at their computer, or using mobile technologies to work than the average employee.
- Small business owners are 50% more likely to purchase upscale, DIY, news, and financial items from mail-order organizations.
- A small business owner is 20% more likely to use mail-order marketing than the overall population.
- As a result, the average income for a small business owner is just over $59,000 annually. For those in finance, insurance, ore real estate, the average income jumps to over $80,000 per year.
- Younger small business owners find the most success in construction, transportation, or real estate – these are the only 3 categories where the owner’s average age is below 50.
It is important to realize some overall demographic data about the United States in these key points about small business owners. The average age of someone living in the US is actually 52. That means having the largest proportion of small business owners being over 50 isn’t out of the ordinary. If anything, the only group that is punching below their weight class is the Millennial generation when it comes to small business ownership. Why is this? It is quite possible that the younger generation is working for their parents and will one day take over ownership of the small business.
Life As A Small Business Owner
- Only 53% of small businesses in the United States have a stable commercial credit score.
- 24% of commercial scores have declined over the past decade compared to 16% of personal credit scores for small business owners.
- Small business owners are 3x more likely to give to an environmental charitable cause and 2x more likely to donate to a political cause than they are to give money to a religious organization.
- Real estate and insurance professionals are the most likely to give to religious causes. Miners and those who own public administration businesses. This is likely a result of these groups having higher income levels than other industries.
- Small business owners in construction and transportation have the lowest charitable donation rates. Transportation charitable giving rates are actually lower than those of the general population.
- Retail and transportation are the two categories which are the most likely to see minority small business owners thriving.
In general terms, life as a small business owner is pretty good. On average, owners are married, have kids, make a decent income, and give some of that money away to help others. What stands out here is that the people who make the most money tend to donate the most money to charitable religious causes. Yet even in the finance industry, which sees the most religious charitable giving, environmental causes still see 3x the amount of cash when compared to other giving. In no US industry does religious giving overtake environmental or political concerns. This means the small business owner demographics focus most of their resources, even charitable ones, to places where they believe they can continue having their business grow.