Interesting Facts About U.S. Businesses

by | Oct 17, 2018


Last week I attended the fantastic 4th Annual Olin Business School Family Business Symposium at Washington University. One of the speakers mentioned a few amazing facts about business in America. Here are those facts (#1 and #2 below) and other really interesting facts about U.S. businesses:

1. A mere 6% of the companies in America produce 50% of the profits.

2. According to Verne Harnish (founder of EO) in his book Scaling Up, 94% of American businesses never achieve $1 million of revenue in a calendar year. (Note that revenues and profits are not the same thing: revenue minus expenses equals profit.)

Similar data from BusinessKnowHow finds that just 9% of businesses earn over $1 million of revenue:


3. According to the Census Bureau, there are about 30 million businesses in the U.S. Of those businesses, only about 1/4th have employees, with 89% of those having less than 20 employees. Three quarters of businesses haveno employees (meaning that the owner/founder was the only person working in the business).

4. According to the Small Business Administration, small businesses are defined as having fewer than 500 employees. Small businesses make up 99.7% of all businesses in the U.S.

5. According to the U.S. Census Bureau, small businesses employ 48% of the U.S. workforce, with the other 52% employed by businesses with over 500 employees.Businesses with over 1,000 employees account for about 1/3rd of U.S. jobs. Small businesses are responsible for 64% of new job creation.

6. In terms of new business survival, according to the Bureau of Labor Statistics, about 80% of businesses make it to their first birthday, 2/3rd survive two years, about 1/2 survive five years and about 35% survive ten years. About a quarter of businesses make it to their sweet 16. The below chart shows this in graphical form.


7. In terms of profits, the American public believes that U.S. companies have much higher profit margins than they actually do. A survey by the American Enterprise Institute asked “Just a rough guess, what percent profit on each dollar of sales do you think the average company makes after taxes?”  The answers averaged to 36%. The actual profit margin of U.S. companies is 7.9%.


8. Immigrants are an important contributor to business creation and ownership. They start about 25% of businesses in the U.S. and own about 20% of all businesses. That’s impressive as immigrants make up only about 13% of the overall population.


  1. Very interesting. Too bad President Trump doesn’t understand number 7. His immigration policies are making it difficult for legal immigrants. Other studies show the each H-1B worker generates 10 jobs.

    • President Trump is not against immigration.
      He just wants to control who comes in.
      It makes great sense to want to keep out criminals and let in people who will be good citizens.


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