Small Business Study: 2018 Small Business Owner & Buyer Demographics

SAN FRANCISCO May 2018 - BizBuySell the Internet's largest business-for-sale marketplace, surveyed 2,300 small business owners and buyers to better understand the people behind the record breaking business-for-sale market. The study also examines the most used marketing practices in small business as well as concerns over data security as it relates to small businesses.

Small Business Owners

Gender:

  • Male - 78%
  • Female - 22%

Age:

  • 20 to 29 - 3%
  • 30 to 39 - 11%
  • 40 to 49 - 27%
  • 50 to 59 - 34%
  • 60 to 69 - 19%
  • 70 or older - 6%

Highest Level of Education:

  • Some high school - 2%
  • High school graduate - 7%
  • Some college - 22%
  • College graduate - 36%
  • Trade/technical/vocational training - 5%
  • Some post-graduate work - 5%
  • Post-graduate degree - 22%
  • Other - 1%

Military Status:

  • Active duty - 1%
  • Veteran - 11%
  • Reserve - 1%
  • National Guard - 1%
  • No military experience - 86%

Ethnicity:

  • White/Caucasian - 71%
  • Hispanic/Latino - 6%
  • Black/African American - 7%
  • Asian/Pacific Islander - 11%
  • Other - 5%

Political Affiliation:

  • Democrat - 13%
  • Republican - 34%
  • Independent - 22%
  • Libertarian - 4%
  • Green - 0%
  • Undecided - 26%

United States Citizenship Status:

  • Natural born citizen - 65%
  • Naturalized citizen - 18%
  • Permanent resident - 12%
  • Visa holder - 2%
  • Applying for permanent status - 1%
  • Other - 1%

Of those not of natural born citizenship, 48% percent are first-generation U.S. immigrants; 10% are second-generation. India (1), China (2), Pakistan (T3), Republic of Korea (T3), United Kingdom of Great Britain and Northern Ireland (T5) and Mexico (T5) were the most commonly selected countries or origin.


Percentage of Business Owners whose Parents and/or Grandparents Owned a Business:

  • Parents owned a business - 29%
  • Grandparents owned a business - 10%
  • Parents and grandparents owned a business - 16%
  • Neither parents or grandparents owned a business - 41%
  • Unsure - 4%

Marital Status:

  • Single, never married - 10%
  • Married/domestic partnership - 75%
  • Widowed - 2%
  • Divorced - 13%
  • Separated - 1%

Children Under the Age of 18 Living in Household:

  • None - 57%
  • One - 17%
  • Two - 17%
  • Three - 5%
  • Four - 2%
  • More than Four - 1%

Household Income:

  • Less than $50,000 - 11%
  • $50,000 to $74,999 - 15%
  • $75,000 to $99,999 - 14%
  • $100,000 to $149,999 - 25%
  • $150,000 to $199,999 - 15%
  • $200,000 to $249,999 - 9%
  • $250,000 to $350,000 - 5%
  • More than $350,000 - 6%

Full-time Equivalent Employees:

  • None - 23%
  • 1 to 5 - 51%
  • 6 to 10 - 12%
  • 11 to 20 - 7%
  • 21 to 50 - 4%
  • 51 to 99 - 1%
  • 100 to 249 - 1%
  • 250 or more - 1%

Years as a Business Owner:

  • Less than a year - 10%
  • 1 to 2 years - 14%
  • 3 to 5 years - 21%
  • 6 to 10 years - 17%
  • More than 10 years - 38%

How Came into Business Ownership:

  • Started business from scratch - 64%
  • Business was passed down from relative - 4%
  • Purchased an established business - 21%
  • Purchased an established franchise - 3%
  • Purchased a new franchise - 4%
  • Other - 3%

Most Challenging Part of Purchasing a Business (of those who bought a business):

  • Finding the right business - 40%
  • Coming up with the down payment - 8%
  • Getting approved for financing - 10%
  • Negotiating the price with the previous owner - 12%
  • Understanding how much the business should be valued at - 23%
  • Other - 7%

Small Business Marketing Usage Rates:

  • Social Media - 62%
  • Direct Mail - 24%
  • Newsletter - 15%
  • Events - 26%
  • Content (Blogs, Whitepapers, etc.) - 15%
  • Email - 50%
  • SEM (Search Engine Marketing) - 16%
  • SEO (Search Engine Optimization) - 27%
  • Paid (PPC, Display Ads) - 19%
  • Print Advertising - 26%
  • Print Brochures - 24%
  • None of the Above - 19%

Social Media Platform Usage Rates (of owners who use social media to market their business):

  • Facebook - 87%
  • Twitter - 34%
  • Instagram - 38%
  • Reddit - 3%
  • Snapchat - 7%
  • Google + - 38%
  • LinkedIn - 43%
  • YouTube - 21%
  • Pinterest - 13%
  • Yelp - 27%
  • Tumblr - 3%
  • Other - 6%

32% of current business owners plan to sell their business within the next 2 years

54% of current business owners have previous business ownership experience

37% of current business owners are concerned about how they store & handle customer data, in light of Facebook's data breach

60% of current business owners do not believe small businesses as whole are equipped to protect internal data.

Small Business Buyers

Gender:

  • Male - 77%
  • Female - 23%

Age:

  • 20 to 29 - 4%
  • 30 to 39 - 19%
  • 40 to 49 - 29%
  • 50 to 59 - 32%
  • 60 to 69 - 13%
  • 70 or older - 2%

Highest Level of Education:

  • Some high school - 1%
  • High school graduate - 8%
  • Some college - 22%
  • College graduate - 36%
  • Trade/technical/vocational training - 6%
  • Some post-graduate work - 3%
  • Post-graduate degree - 24%
  • Other - 1%

Military Status:

  • Active duty - 1%
  • Veteran - 10%
  • Reserve - 1%
  • National Guard - 1%
  • No military experience - 88%

Ethnicity:

  • White/Caucasian - 65%
  • Hispanic/Latino - 7%
  • Black/African American - 7%
  • Asian/Pacific Islander - 14%
  • Other - 7%

Political Affiliation:

  • Democratic - 17%
  • Republic - 29%
  • Independent - 20%
  • Libertarian - 4%
  • Green - 0%
  • Undecided - 30%

United States Citizenship Status:

  • Natural born citizen - 70%
  • Naturalized citizen - 19%
  • Permanent resident - 7%
  • Visa holder - 2%
  • Applying for permanent status - 1%
  • Other - 1

Of those not of natural born citizenship, 64% percent are first-generation U.S. immigrants; 16% are second-generation. India was the most commonly selected country or origin by a wide margin.


Percentage of Business Buyers whose Parents and/or Grandparents Owned a Business:

  • Parents owned a business - 27%
  • Grandparents owned a business - 8%
  • Parents and grandparents owned a business - 15%
  • Neither parents or grandparents owned a business - 51%

Marital Status:

  • Single, never married - 14%
  • Married/domestic partnership - 72%
  • Widowed - 1%
  • Divorced - 12%
  • Separated - 1%

Children Under the Age of 18 Living in Household:

  • None - 54%
  • One - 17%
  • Two - 18%
  • Three - 7%
  • Four - 3%
  • More than Four - 1%

Household Income:

  • Less than $50,000 - 19%
  • $50,000 to $74,999 - 19%
  • $75,000 to $99,999 - 16%
  • $100,000 to $149,999 - 21%
  • $150,000 to $199,999 - 11%
  • $200,000 to $249,999 - 6%
  • $250,000 to $350,000 - 5%
  • More than $350,000 - 3%

When Buyers Plan to Begin the Process of Purchasing a Business:

  • Less than 3 months - 21%
  • 3 to 6 months - 18%
  • 6 to 12 months - 19%
  • 1 to 2 years - 13%
  • 3 to 5 years - 3%
  • Currently looking - 26%

Most Challenging Part of Purchasing a Business:

  • Finding the right business - 58%
  • Coming up with the down payment - 12%
  • Getting approved for financing - 10%
  • Negotiating the price with the previous owner - 2%
  • Understanding how much the business should be valued at - 13%
  • Other - 5%

45% of business buyers have previously owned a business

57% of business buyers do not believe small businesses as whole are equipped to protect internal data



Media Contact:

Cara Lutz
Walker Sands Communications
office: (312) 561-2484
email: cara.lutz@walkersands.com

NOTE: For additional statistics, please see the latest BizBuySell Insights Report


About BizBuySell

BizBuySell is the Internet's largest business for sale marketplace. Since 1996, BizBuySell has offered tools that make it easy for business owners and brokers to sell a business, and potential buyers to find the business of their dreams. BizBuySell currently has an inventory of approximately businesses - spanning 80 countries - for sale at any one time and receives more than monthly visits. The site also features an extensive franchise directory as well as an easy-to-use business valuation tool. Please visit www.bizbuysell.com for more information.

BizBuySell was founded in 1996 and in 2012 became a division of CoStar Group, Inc. (NASDAQ - CSGP) - commercial real estate's leading provider of information and analytic services. CoStar conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of commercial real estate information and offers a suite of online services enabling clients to analyze, interpret and gain unmatched insight on commercial property values, market conditions and current availabilities. For more information, visit www.costar.com.


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