What is the Average Small Business Revenue in 2025?
The truth is small businesses are the backbone of the economy, but their financial reality can be a mystery.
We’ve all seen headlines boasting astronomical success stories, but what about the average small business?
Today, we have gathered data to reveal the unfiltered truth about small business revenue in 2025. We’ll uncover shocking statistics that expose the wide spectrum of incomes, from surprisingly modest to potentially impressive.
But wait, there’s more! We’ll also explore the factors that dramatically impact revenue from industry to location.
So, whether you’re a curious customer, a budding entrepreneur, or a seasoned small business owner, this article has something for you.
Contents:
– Top 5 Small Business Revenue Statistics
– What is the Revenue of Small Businesses in 2025
– Revenue of Non-Employer Businesses: A More Modest Reality
– Revenue Generation Based On Industries
– Businesses Revenue Based on Urban vs. Rural Areas
– Startup Struggles: The First Year’s Revenue
– Growth Trajectory: How Revenue Increases Over Time
Top 5 Small Business Revenue Statistics
1. Small Businesses generate $60,000 in revenue annually.
2. The average for all non-employer businesses in the U.S. is around $46,900 per year.
3. Rural businesses generate $484,327 compared to $408,800 for urban.
4. 20% of new businesses fail within the first year.
5. Most new businesses need 18 to 24 months to reach profitability.
6. Businesses experience their fastest revenue growth in the first three to five years.
What is the Revenue of Small Businesses in 2025
An average revenue of $60,000 annually for small businesses is reported, encompassing self-employed individuals. This figure is significant, but it’s crucial to remember it represents a broad spectrum. Many small business owners, especially those just starting out, fall below the $100,000 mark in yearly earnings.
Source: Tidio
Revenue of Non-Employer Businesses: A More Modest Reality
The U.S. Small Business Administration defines small businesses based on industry and employee count, not a single revenue threshold. This highlights the vast differences across sectors.
The picture becomes clearer for solopreneurs and non-employer businesses (those without employees). A Federal Reserve Bank study reveals that nearly 45% of these businesses generate $25,000 or less in annual revenue. The average for all non-employer businesses in the U.S. is around $46,900 per year.
Sources: AdvancePoint Capital, Lisa Zhou
Revenue Generation Based On Industries
Even within the non-employer category, industry plays a crucial role. Data from altLINE reveals a significant disparity. Construction businesses, for example, boast a higher average non-employer revenue of $65,051. This reflects the potentially higher costs of materials and equipment in this sector. Conversely, agriculture, forestry, and fishing businesses see a lower average of $47,742.
Industry Types | Percentage |
---|---|
Construction | 40% |
Agriculture, Forestry, Fishing | 30% |
Other | 30% |
Source: altLINE
Businesses Revenue Based on Urban vs. Rural Areas
The hustle and bustle of city life might translate to higher revenue for some businesses, but is that always the case? While national averages provide a starting point, location plays a significant role in small business finances.
A 2021 Canadian study by Statistics Canada found that small businesses in rural and small towns (RSTs) had higher average annual revenue than their urban counterparts. The study revealed an average of $484,327 for RST businesses compared to $408,800 for urban businesses.
It’s important to note that this data is specific to Canada and might not directly translate to the US. Additionally, these figures likely include businesses with employees, which can skew the average upwards compared to solopreneurs.
Source: Statistics Canada
Rural Areas | Urban Areas |
---|---|
$484,327 | $408,800 |
Startup Struggles: The First Year’s Revenue
The dream of launching a successful business is powerful, but the initial stages can be a financial rollercoaster. How much revenue can a new business realistically expect in its first year?
Unfortunately, there’s no magic number. A small business’s first-year revenue can vary widely depending on industry, location, and business model. However, some statistics offer a glimpse into the financial realities of young businesses.
The Survival Rate
A sobering reality is that many businesses fail within their first year. According to the U.S. Bureau of Labor Statistics, roughly 20% of new businesses fail within the first year, and the rate climbs to 50% within five years. This highlights the challenges of establishing a customer base and generating revenue in the early stages.
Revenue Generation Prediction
Studies suggest that many businesses don’t see significant profits in their first year. Forbes reports that most new businesses need 18 to 24 months to reach profitability. This doesn’t necessarily mean zero revenue but indicates that initial income might be used to cover operational costs and reinvestment.
Data on first-year revenue is limited, but some insights exist. A benchmarking platform for small businesses found that the average revenue for service-based businesses in their first year was $65,000, while product-based businesses averaged $35,000. It’s important to remember that these are averages, and individual businesses may fall above or below these figures.
Product Based | Service Based |
---|---|
$35,000 | $65,000 |
Based on the numbers if you are moved by the projection as an entrepreneur aiming to establish their business in the U.S., an E2 visa business plan is crucial for securing the necessary visa.
References: BLS.GOV, Forbes, Bench.
Growth Trajectory: How Revenue Increases Over Time
The story of small business revenue isn’t just about the first year. Crafting detailed investor business plans can attract potential investors and provide the necessary capital for growth. Understanding how average revenue changes over several years can provide valuable insights for aspiring and existing entrepreneurs. While data on year-by-year breakdowns is limited, some studies offer glimpses into this growth trajectory.
The Kauffman Foundation reports that businesses experience their fastest revenue growth in the first three to five years. This can be attributed to factors like establishing a customer base, refining marketing strategies, and potentially expanding product or service offerings.
However, the growth doesn’t necessarily follow a straight line. A 2023 study by the U.S. Bureau of Labor Statistics (BLS) sheds light on this. The study analyzed data on employer businesses (those with employees) across various industries. It revealed that average revenue for these businesses increased by 12% in the first year, followed by a more modest 5% growth in the second year.
Beyond the initial growth spurt, the trajectory can vary based on industry and business model. For instance, a study by Bench.co, a small business benchmarking platform, found that service-based businesses tend to see steady and consistent revenue growth over a five-year period. Conversely, product-based businesses might experience fluctuations due to factors like product life cycles and market saturation.
References: The Kauffman, BLS.GOV, Bench.
Conclusion
The average small business revenue in 2025 paints a complex picture. While headlines might tout impressive success stories, the reality is that many small businesses, particularly those just starting out or without employees, fall well below the $100,000 mark in annual earnings.
The data reveals a wide spectrum of revenue, influenced by factors like industry, location, and business model.
For aspiring entrepreneurs, understanding these realities can help set realistic expectations. The initial stages can be challenging, with statistics showing a high failure rate within the first few years. Engaging with a professional business plan writer can significantly improve your chances of success by creating a robust business strategy.
However, with a solid plan and an understanding of your target market, there’s also the potential for significant growth over time, especially in the first three to five years.
For more statistical article, check out Number of Small Business in the US.
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