National Small Business Week has arrived from Sep. 13-15! The U.S. Small Business Administration has celebrated National Small Business Week (NSBW) for more than a half-century, celebrating the contributions of our entrepreneurs and small business owners. Small businesses are not only the heart of our community, but they are also responsible for two out of every three new jobs in the U.S. annually.
While it’s a common misconception that franchises are owned by large corporations with deep pockets, franchise operations are small businesses too with much in common with their independent counterparts. Both have similar staffing and revenue models, depend on local employees, community involvement, and attracting a consumer base with an organic, grassroots appeal.
When exploring business ownership options, an individual has three options: buy an existing business, start from scratch, or buy a franchise. Buying a franchise can still give you the appeal of a local business while setting you up for success and reducing risk. Below are some facts and figures that compare independent small businesses with franchise operations:
Total U.S. Small Businesses and Franchises
According to some of the most recent figures available from the U.S. Small Business Association’s Office of Advocacy, there are approximately 31.7 million small businesses in the U.S., employing over 60 million people, or 47.1% of the workforce. Approximately 770,000 of these small businesses are franchised operations, employing over eight million people.
Franchise operations typically have more annual sales revenue than non-franchises, by a margin of $6.5 to $4.7 million. Franchises also generate an economic output of over $760 billion, equal to about three percent of the total gross domestic product (GDP).
Success Rate Comparison
The success rate of independent small businesses is close to 80% after the first year of operation. It drops to 50% after five years and two-thirds will fail within 10 years. In contrast, and according to a multi-year FranNet study, 92% of their franchise placements were still in business after two years and 85% were still successful after five years.
Beginning next week, the U.S. Small Business Administration will be holding a three-day virtual summit, “Getting Back on Track: Resources to Build Back Better” to mark the occasion, Monday, Sep. 13 – Wednesday, Sep. 15, from 11:00 a.m. to 6:00 p.m. ET. You can register for free here.
If you’re an entrepreneur looking to become a small business owner through franchising, we can help you get started today by setting up a no-cost, no-obligation appointment with a qualified FranNet representative who both lives and works in your area. Together, we can find a franchise ownership opportunity that matches up perfectly with your lifestyle and income-oriented goals.