On average, small businesses are realizing profit margins of only 1.5 to 7 percent per year, depending on the number of employees and company size. In their latest blog, The Kickass Entrepreneur explores what this means and how it affects small business owners.
Richmond Hill, ON -- (ReleaseWire) -- 09/30/2019 --In a world where more and more people are making the choice to become small business owners, it's important to take note of profit. Average small business profits are showing significant declines, and many people don't realize just how low some of these numbers may be. Starting a small business is no longer a "get rich quick option", and many potential entrepreneurs shy away from choosing that path when they are provided with this information.
In his latest article, Jeff Wiener (founder and owner of The Kickass Entrepreneur) takes some time to really break down the numbers, sharing his thoughts on the public perception of small business profit margins versus reality.
To begin his analysis of the profits that small businesses really earn, Wiener uses an authoritative study that cites net profit margins for small businesses ranged from 1.5% to 7% for 2004-2012. The bulk of his analysis then explores the 7% high-end of that range, which is significantly lower than many would expect.
His findings include that the majority of businesses don't have any employees other than the owner, and on average, those businesses make around $44,000 in overall revenue. 7% of that is around $3000 a year in profit margins - and that's the only profit that is made. While that number differs based on the number of employees, most companies are not looking at a significant amount of profit margin until they hit around 20 employees.
In the article, Wiener states that "If you're thinking of starting a small business because you're hoping to hit the "get rich quick jackpot", you might want to consider a different profession". But, he makes sure to go on and explain that, if you've got the drive and you want to work for yourself, it's worth it. As an early retiree entrepreneur, Wiener states that he would "do it all over again if I could."
The graphs and information in the article are very much a wakeup call for many potential entrepreneurs, and those who are looking to start their own business should read this so that they can understand the profit average small business information that Wiener explores in the article.
With a simple-to-understand format and a number of charts and graphs, this blog is an excellent stepping stone and resource for current small business owners as well.
About The Kickass Entrepreneur
The Kickass Entrepreneur is a business-focused website that works with and for small business owners looking to find success as entrepreneurs. Started by Jeff Wiener, a 49 year old retiree (thanks to his success as an entrepreneur in both Canada and the United States), TheKickassEntrepreneur.com has been built as an entrepreneur's "one stop research site". With tips on building business, improving profits, and creating wealth, plus a robust coaching program, The Kickass Entrepreneur is constantly expanding their resources for every small business owner.