15+ Average Small Business Revenue + Profit Margin Statistics [2026]

Research Summary: Small businesses represent over 99% of all American enterprises, making it crucial to comprehend their average revenue and profit margins. Whether you are a self-employed business owner or manage a small team, here are key insights into small business revenue and profit margins:

• The average small business in the US generates $53,000 in revenue.

• 81% of US small businesses operate without employees.

• A self-employed business without employees in the US averages $44,000 in annual revenue.

• Businesses with employees can see average revenues ranging from $387,000 to $40.7 million, depending on employee count.

• The typical profit margin for small businesses falls between 7% and 10%.

For a more detailed analysis, we categorized the data as follows:
Revenue | Profit | Revenue and Profit Challenges | Business Owner

Small Business Revenue Statistics

Average small business revenue can vary significantly based on factors such as employee count and owner demographics. Here are some essential insights:

• Small businesses with five to nine employees have an average annual revenue of $1.08 million.

  Most small businesses have ten employees or fewer, with many earning less than $1 million. Below is a detailed breakdown of average revenue by employee count:

  Average Small Business Revenue By Number Of Employees

  Number of employees	Average annual income
  1-4	$347,000
  5-9	$1.08M
  10-19	$2.16M
  20-99	$7.12M
  100-499	$40.77M

• The average small business generates $100,000 in revenue per employee.

  This figure varies greatly, with smaller companies (under $1 million in revenue) averaging $43,000 per employee, while larger firms (up to $50 million in revenue) can exceed $230,000 per employee.

  Average Small Business Revenue Per Employee

  Average annual revenue	Average revenue per employee
  Less than $1 million	$43,000
  Up to $50 million	$230,000
  Average	$100,000

• 86.3% of small businesses earn less than $100,000 in annual revenue.

  This statistic indicates that only 13.7% of small businesses exceed $100,000 annually, highlighting that a significant proportion of small businesses function without employees.

• On average, female small business owners earn 40% less than their male counterparts.

  For instance, after two years in business, female small business owners average $59,000 in revenue, while similar male owners average $91,000.

  Average Small Business Revenue By Gender Over Time

  Number of years in business	Female average annual revenue	Male average annual income
  One year	$50,000	$75,000
  Two years	$59,000	$91,000
  Four years	$68,000	$104,000

• Black small business owners earn 11% less than their Asian counterparts.

  On average, White and Asian small business owners report the highest revenues in the US, at $55,549 and $56,808, respectively, while Black small business owners average only $50,539.

  Average Small Business Revenue By Race/Ethnicity

  Race/Ethnicity	Average annual revenue
  Asian	$56,808
  White	$55,549
  Hispanic/Latino	$53,705
  Black	$50,539

• Small business owners aged 18-34 earn 6% more than those aged 35-64 on average.

  While older Americans generally earn more, the average small business run by an 18-34-year-old generates $81,300, compared to $76,500 for those aged 35-64.

Average Small Business Profit Statistics

Revenue does not equate to profit, as expenses must be considered for a business to thrive. Here are the average profit statistics for small businesses in the US:

• The average profit margin for small businesses is between 7% and 10%.

  A margin of 10% is typically viewed as healthy, while margins reaching 20% are considered excellent. Profit margins vary significantly based on industry, employee count, and whether goods or services are sold.

• Only 40% of small businesses are profitable at any given time.

  Approximately 30% of businesses operate at a loss, while another 30% break even, indicating that profitable small enterprises are less common than unprofitable ones.

• The average profit per employee is only $10,215.

  Despite high revenues from employees, the actual profit generated from each employee can be significantly lower.

• The Financial Services industry boasts the highest net profit margin at 32.33%.

  In contrast, the Hotel & Gaming industry sees the lowest average net profit margin at -28.56%.

Average Business Profit Margins By Industry

Small Business Revenue and Profit Challenges

Generating substantial revenue as a small business owner presents various challenges, some of which can lead to failure. Here are critical factors to consider:

• On average, it takes two to three years for a business to become profitable.

  Planning for initial unprofitable years is essential, as businesses that run out of funds early on are often the first to fail.

• 82% of small businesses fail due to cash flow issues.

  Cash flow problems are the leading risk for small businesses, often stemming from underlying issues such as:

  • Lack of a minimum viable budget (overspending)

  • Poor credit management or delayed payments

  • Poor inventory management

  • Insufficient cash reserves

  • Not employing an accountant

• 50% of new businesses fail within the first five years.

  The business failure rate is 22% in the first year, rising to 65.7% by year ten. Regrettably, most small businesses in the US do not survive past their fifth year.

  Small Business Failure Rate Over Time

  Years in business	Failure rate
  1	21.9%
  2	31.8%
  3	39.7%
  4	49.7%
  5	50.0%
  6	53.6%
  7	57.7%
  8	61.0%
  9	63.2%
  10	65.7%

Business Owner Statistics

Every business owner aspires for success, but what is the reality for American entrepreneurs? Here are some key insights:

• The average income of a small business owner is $50,934 in 2026.

  Specifically, the top 90% of small business owners earn $94,000 or more, while the bottom 10% earn $27,000 or less.

• Only 5% of small businesses generate over $1 million in revenue.

  Thus, surpassing the $1 million revenue mark is a rare achievement for most business owners.

Small Business Revenue FAQ

1. What is a good profit margin for a small business?

   A good profit margin for small businesses is anything above 10%. While the average profit margin for small businesses is between 7% and 10%, a great margin is closer to 20%.

   However, profit margins can vary significantly based on industry and other factors.

2. Which small businesses have the highest profit margins?

   Large companies (up to 500 employees) in the Financial Services sector have the highest profit margins. These margins average over 30%, positioning these firms well above the average in profitability.

   Here are the top five industries by average profit margins:

   • Financial Services: 32.33%

   • Software (Entertainment): 29.04%

   • Tobacco: 20.58%

   • Software (System & Application): 19.66%

   • Computers & Peripherals: 18.72%

   Conversely, the bottom five industries by profit margin are:

   • Hotel & Gaming: -28.56%

   • Green & Renewable Energy: -19.78%

   • Software (Internet): -10.36%

   • Drugs (Biotechnology): -0.62%

   • Food Wholesalers: 0.69%

3. What is the average revenue of a small business?

   The average small business generates $53,000 in revenue. A significant 81% of these businesses are operated by owners without employees, earning less on average. For example, businesses without employees average $44,000, while those with 1-4 employees average $387,000.

   To illustrate the correlation between employee count and revenue, here is the average revenue by employee numbers:

   Number of employees	Average annual income
   0	$44,000
   1-4	$347,000
   5-9	$1.08M
   10-19	$2.16M
   20-99	$7.12M
   100-499	$40.77M

4. How is a small business valued in terms of revenue?

   The average valuation of a small business is typically around 2x its sales revenue. However, this can vary widely from 1x to over 8x, with the most successful companies often valued significantly higher than their revenue.

   For instance, a moderately successful business with $2 million in revenue might be valued at $4 million, whereas a highly successful counterpart could be valued at $16 million.

Conclusion

Small businesses play an integral role in the US economy, with owners leveraging their skills and knowledge for success. For businesses lacking employees, the average revenue stands at $44,000, while those employing staff can achieve revenues ranging from $387,000 to $40.7 million.

While the average profit margin for small businesses is between 7% and 10%, it is concerning that only 40% of them are profitable, and only 50% will endure beyond five years.

Nonetheless, these statistics should not deter small business owners; with thorough planning, adequate funding, and strong credit management, success is achievable.

References

1. Flora Financial – Average Small Business Revenue: What To Know

2. TKE – What Is The Average Profit Margin for a Small Business in North America?

3. LaConte Consulting – Financial Facts About Women-Owned Business

4. Zippia – Business Owner Demographics and Statistics in the US

5. Tipalti – Profit Per Employee

6. Polymer – What is a Good Gross Profit Margin? (2026)

7. FreshBooks – How Long Does It Take a Business to be Profitable? A Guide

8. Score – The #1 Reason Small Businesses Fail – And How to Avoid It

9. Zippia – What Percentage of Small Businesses Fail? [2026]: Top Reasons and Failure Rate

10. Zippia – Business Owner Salary

11. E+A – Only 1 in 20 Businesses Surpass $1 Million In Annual Revenues. Here Are 5 Reasons Why

12. Doerhoff & Associates CPA – What to Know About the Average Small Business Profit

Author

Jack Flynn

Jack Flynn is a writer for Zippia. In his professional career he’s written over 100 research papers, articles and blog posts. Some of his most popular published works include his writing about economic terms and research into job classifications. Jack received his BS from Hampshire College.