Small Business FAQ's, Data & Statistics

FNBC™ licensed business brokerage offices have been involved in the sale of thousands of different small businesses since 1982, totaling hundreds of millions of dollars in small businesses brokered.

There are over 25,000,000 small businesses in the United States today, up from just 14.7 million in 1977.

60% of present small business owners expect to sell their businesses within 3 years.

At any given time, in any given year, approximately 20% of present small business owners would be receptive to selling their businesses.

Most businesses that are available to purchase are on the market, not for "sinister" reasons, nor because the business is "in trouble," but rather, for simple, human reasons, such as:

  • divorce
  • partnership split-ups
  • health reasons
  • death of the owner
  • a feeling of "burn out" leaving the seller uninterested in continuing the business
  • a desire by the present owner to move to another part of the country
  • other business interests or opportunities available to the owner that would be hard to pursue unless he/she sells their present business
  • and/or any number of other, simple, human reasons

"Small" businesses collectively represent more than 95% of the businesses in the USA.

Small businesses have been often referred to as "The Backbone of the American Economy." They act as a driving force in the local economic dynamic of virtually every metropolitan region.

Small businesses create 75% of the new jobs made available in the economy annually. They provide, by far, the majority of the "first jobs" most Americans find when they enter the workforce. They have also contributed 40% of the new high-technology jobs created since the late 1980’s and early 1990’s.

As of 2003, there were 130,659 convenience stores in the United States. As of the end of 2004, there were 138,205 convenience stores. According to the national Association of Convenience Stores, that is an increase of 5.8%. 
 
This compares with a total of 98,200 such stores in 1994. The industry has traditionally been dominated by small, independent, non-chain store operators. The number of one-store owners in 2004 equaled 61.3% of all the convenience stores in the USA.

As of 2005, there were 168,987 outlets and retail stores selling gasoline. According to the National Petroleum News, this is an increase of 1,641 stores from 2004.

Today nearly 60% of women 16 years of age and older are working, up from 48% in 1977. More females own their own businesses now than at any time in our history.

Today there are over 3.1 million minority-owned small businesses in the United States, with gross receipts totaling over $591 billion. In 1977, there were 561,396 minority-owned small businesses, with gross receipts of about $26 billion.

9 out of 10 small businesses in the country have fewer than 20 employees.

More than 75% of all the firms engaged in exporting are small businesses.

Over 95% of the companies in America have less than 500 employees.

As of 2005, the number of U.S. firms without paid employees reached 20.4 million. That is 78% of the nation’s 26 million businesses. This business category generated more than $950,000,000,000 (yes, 950 BILLION) in revenues in 2005. 
 
That’s an average of $46,568 in revenues each. Many of these are part-time ventures, but many are also full-time businesses that have desirable revenues.

The Small Business Administration says the number of non-employee businesses grew by 25.5% from 2000 to 2006. That’s more than triple the rate of businesses with employees, which grew by 7.6% during that period.

Web search portal firms are among the fastest growing business types, which drive Internet traffic to online retailers, up 41% from 2004 to 2005. Internet service providers are up 17% and nail salons are up by 18%. 
 
Many of these “one-man” businesses eventually become some of the most impressive companies in our economy. Millions of them start out with no employees, and as they grow, are bought and sold by entrepreneurs entering and leaving “the great American game” of business ownership.

Over 90% of the buyers of the thousands of businesses brokered by our offices during the last 25 years used financing sources that were introduced to the buyers by our sales associates, taking advantage of our voluntary, "No Fee" acquisition financing services.

Over 90% of the buyers of small businesses, year after year, acquire businesses that are engaged in industries different than the buyer's previous professional experiences.

Over 90% of the buyers who have purchased small businesses, over the last 26 years, are first-time buyers, and have never owned a business before.

Financing is not difficult for buyers buying good businesses that have adequate cash flow and good records. Especially if the buyers contribute at least 20% of the purchase price in cash invested, with the other 80% available from lenders and/or seller financing.

Financing is easy for buyers buying established franchised businesses, because the failure rate nationwide is so low for franchised owners.

Over 85% of the thousands of business sold by FNBC™ sales associates since 1982 were businesses priced so that the cash flow available from the business operations, at present sales, without growth, would easily: 

  • Service the acquisition debt
  • Pay all the business overhead expenses
  • Deliver income to the new owner
  • And also provide an above-average "Return on Investment" to the buyer, in addition to delivering equity build-up benefits.

We are happy to provide actual case study examples upon request.

Currently, buyers of small businesses can arrange financing with the buyer contributing 15% to 25% of the non-real estate purchase price as a down payment. The balance is available from traditional lenders, and/or seller financing
 
Buyers commonly only need 10% down on any real estate purchased as part of the acquisition of an operating business.

SBA loan guarantees are available to small business buyers for purposes such as:

  • the acquisition of operating business assets and good will
  • to purchase inventory, furniture, fixtures, equipment, leasehold improvements
  • to purchase business real estate
  • to finance receivables and augment operating capital
  • finance seasonal lines of credit
  • construct commercial buildings
  • fund start-ups
  • fund the establishment of franchised business opportunities

For over 27 years, our agencies have specialized in guiding business buyers, at no fee, in the details related to utilization of the various SBA loan programs available. We also assist buyers, at no charge, in filling out SBA loan documents, when the buyer is acquiring one the businesses listed with our agencies.

FNBC™ licensed business brokerage offices have one of America’s most extensive, up-to-date, regularly revised data bases of available lending institutions. This allows our sales associates to stay "on the cutting edge" of information about which lenders are most likely to approve the various loans available to small business buyers.

Approximately 95% of all businesses are eligible for SBA financing assistance. Business eligibility size standards vary depending on the industry. However, as a general rule, a loan project is within SBA size limits if it is:

  • manufacturing or wholesaling with fewer than 100 employees
  • retail or service with annual sales under $5,000,000

Ineligible businesses include not-for profit organizations and businesses which deal in real estate investments, religious indoctrination, pyramid sales or illegal activities.

Out of the thousands of small businesses our sales associates have brokered since 1982, approximately 95% of the transactions were structured as a sale of the business assets, not a sale of the corporate stock.

It is not uncommon that the "Return On Investment" for the buyer of a business to be much higher than the ROI in public stocks, bonds or mutual funds, with the ROI on the purchase of a business commonly being 25% to 100% annually on the dollars invested by the buyer. Actual case studies will be provided upon request.

According to Dr. Chad Moutray, Chief Economist for the SBA Office of Advocacy, “Business ownership has traditionally been a route to prosperity for Americans”. In 2001, small business-owning households were more than twice as likely as non-owning households to be high income (57.1% to 25.5%).

According to “The Millionaire next Door,” 64% of American millionaires achieved their wealth by owning a business. 13% of millionaires had professional practices; 10% became millionaires through investments; 7% held corporate jobs; and 6% gained their wealth through inheritances.


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