As of 2018 there are 30.2 million businesses in the United States. The proportion of those that are small businesses is a whopping 99% and they employ more than 47% of the private workforce in jobs. There are many other interesting statistics related to small businesses, such as the statistic that 50% of small businesses survive beyond five years. Ownership typically has a bigger impact on small businesses, as compared to medium or large businesses, because of the level of involvement and control they have. This article will focus on a 2 key statistics related to the ownership of small businesses: age and gender.
Because of the extensive media coverage of technology companies, and the perception that they are all founded by 20-something year olds, the perception could be that today most of America’s small businesses are owned by young adults. But is that true? Looking harder at data from the government and various surveys and research studies, it turns out that is not true. As of 2016, the median age of a small business owner is around 50 years old, per a Babson College study. Note that this accounts for traditional small businesses that have multiple employees and not those who only employ independent contractors or are “one-man-armies.” This should not come as a shock given that even though there is more financing and other resources available to start small businesses than ever before, it is typically middle-aged people who take advantage of the resources. This could be due to many reasons, such as more young people going to college to get bachelor’s, master’s, or doctorate’s degrees than ever before. Most young people focus on their school work instead of trying to split time between going to school and starting a small business that has multiple employees. The finances of most younger people are also typically not ready to own a small business given the other major expenses that typically accompany early adult life: a house, child expenses, new vehicles to accommodate growing families, etc.
When it comes to gender, the percentage of small business owners that are male is still in the majority (55%), per the same study, but there is a growing number of small businesses owned by females. The difference in proportion to begin with could be due to a variety of reasons, but one that is typically cited is that women have to take (at least some) time off from their professional life when they have a child (or children). Though there are more resources available to such small business owners than in decades past, this still has a huge impact when it comes to ownership vs a front-line employee due to the involvement and responsibilities of a small business owner.
