Although the entrepreneurial spirit remains strong among small business owners, a lot has changed over the past six decades. Here are some of the major differences between the business world of present-day and those from the 1950s, 1960s, 1970s…
Major differences between small businesses then and now
- During the 1960s, big business dominated the domestic economic landscape, which made it difficult for small firms to compete. In the 1950s, small business output accounted for roughly 58 percent of total domestic output. This number dropped to around 48 percent in the early ’60s, and by 1977, small businesses with fewer than 500 employees produced only 46.5 percent of business output in the United States. Today, small businesses’ contributions are starting to grow again, and the SBA estimates that small businesses accounted for 44 percent of U.S. economic activity (Forbes).
- In 1965, the top five industries for startup companies were: housing, computer technology, chemicals, electrically powered consumer durables, and automobile services/parts. Today, the top five fastest-growing industries are healthcare, technology, construction, retail, and non-durable manufacturing (Investopedia).
- In the 1950s and ’60s, the SBA only classified companies employing less than 250 employees as small businesses. This number increased to less than 500 employees in the 1970s. Today, firms with fewer than 500 workers account for 99.7 percent of employer firms (SBE Council). There are currently 31.7 million small businesses in the United States (CDN).
- In 1960, minorities owned roughly 10 percent of small businesses in the United States. As of 2019, the number of minority-owned businesses is 18.7 percent of the nation’s 31.7 million small businesses (Census).
- In 1972, women-owned only 4 percent of all American businesses. By 2018, 22.35 percent of American businesses that employed people in the United States are owned by women (Guidant Financial).
15 iconic American businesses founded in the 1950s
Dunkin’ Donuts, founded in 1950
Sonic Drive-In, founded in 1953
Denny’s, founded in 1953
Williams-Sonoma, founded in 1956
Holiday Inn, founded in 1952
H&R Block, founded in 1955
Mister Softee, founded in 1956
Sbarro, founded in 1956
IHOP, founded in 1958
Trader Joe’s, founded in 1958
Hush Puppies, founded in 1958
Pizza Hut, founded in 1958
Conair, founded in 1959
Guitar Center, founded in 1959
Little Caesars, founded in 1959
Small business facts and figures
- Only 50% of all small businesses will survive their first five years. Only one-third will make it to ten (SBA).
- Small businesses employ about 57.3 percent of the private workforce (NTIA).
- Scientific and Technical Services; Construction; Health Care and Social Assistance; and Retail Trade combined are estimated to consist of 2.8 million businesses that employ about 51.1 million people and have an annual payroll of approximately $2.6 trillion (Census).
- 30% of entrepreneurs only have a high school degree, 31% have an associate degree, 17% have a bachelor’s degree, 18% obtained a master’s degree, and 4% have a Ph.D. (Guidant Financial).
- Immigrants make up 21.7 percent of small business owners in the United States (New American Economy).
- Gen X, at 46.46%, took first place as the largest generational segment. Boomers, at 45.45%, took second place. At 7%, millennials came in third place. And Gen Z and Post War era business owners both had less than 1% each (Guidant Financial).
- 50 percent of small businesses are operated from home or home offices (Fundera).
- 90% of new American billionaires are self-made (Forbes).
- 63% of adults believe entrepreneurship is a good career (Babson).
- 60.87% of business owners primarily went into business because they were ready to be their own boss, and 47.64% of them went because of overall dissatisfaction with corporate America (Guidant Financial).
- With a Global Entrepreneurship Index of 83.6, the US is the best country for entrepreneurs (GEDI).
- Only 9% of entrepreneurs have a Bachelor’s Degree in business (TSheets).
- At 15.05%, Retail was the largest industry category in 2022. At 13.71, food and restaurants were just behind. The next largest category was business services at 10.10%. (Guidant Financial)
- 46% of people who start small businesses are between the ages of 41 and 56 (Small Biz Genius).
- For online shopping statistics, nearly 63 % of shopping starts online. With nearly half of consumers shop on their phone rather than in-store (Oberlo).
What must a company do or have to be successful in 2023?
Here are some of the top tips for small business owners to be successful in 2023:
- Have a mission with great core values that employees can believe in.
- Keep detailed records to know where the business stands financially and what potential challenges you could be facing.
- Take calculated risks to help your business grow and gain insight.
- Look for ways to improve your business and make it stand out from the competition.
- Prepare to make sacrifices in order to make your business work, such as time with your family and friends.
- Remember to provide great communication with your customers through phone, email, internet, or social media.
- Be consistent and keep doing what is necessary to be successful day in and day out.
- Have an online presence. This can include having a social media account and a website or support page that works on mobiles and on computers. You can try using email or text messages so your costumers can get any update about your store immediately.
Frequently asked questions
According to McKinsey Quarterly from their 1966 archive, we can observe the following major changes in the marketing field over the last 50 years.
1. The dominance of the customer. The need to understand and anticipate future customers is becoming more essential than in the past. Because the end users of almost every company’s products are changing in age range, location, and number at an ever-increasing rate.
2. The spread of marketing research. As the influence of marketing grows, marketing research is expanding and becoming more important. For example, artificial intelligence (AI) is rapidly changing how market research is done. Globally, the AI market captured over $27B in 2019 and is expected to expand at a CAGR of 33% to $266.9B by 2027.
3. The rise of technology. In the past, companies did not have the advantage of electronic data-processing analyses, online communications, and information-retrieval systems as tools to help make marketing more efficient. Today, companies can quickly employ marketing analytics tools that help track and forecast how well an ad campaign did with attribution modeling and aggregate marketing data from different channels. Or even just reach across the screen through in-app video calls to help visitors make a purchase decision.
4. The expanded use of test marketing. Test marketing is a way to get feedback about a product before it’s released to the public. This helps to make the product better and hopefully more popular. During the test, businesses share a prototype of their service or product and solicit customer feedback to improve their offerings before it is officially launched.
5. The movement toward integrated marketing from field selling. 50 years ago, a company needed to spend an average of $15,000 to $17,000 of direct costs per year, including compensation, to keep a typical salesperson on the road. Today, companies invest heavily in digital marketing, by which their marketers and sales reps can reach customers using a variety of different sales tools, different channels and marketing types, such as content marketing, social media marketing, conversational marketing, a focus on product-led-growth, etc.
According to Hubspot, the following 13 companies have excellent global marketing strategies:
• Dunkin Donuts
• Innocent Drinks
• Pearse Trust
• Red Bull
• Traffic Ticket Clinic
• World Wildlife Foundation
1. Run a dropshipping business.
2. Design and sell print-on-demand products.
3. Sell digital products or online courses.
4. Open an online fashion shop.
5. Become an affiliate marketer.
6. Start freelancing.
7. Become a social media planner/media manager.
8. Design websites, UI/UX, or graphics.
Bonus infographic: Small businesses then and now
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