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How Much Do Business Owners Make on Average?

Small white model shop storefronts surrounded by gold coins business making money

“How much does a business owner make?” If you’ve ever asked this question, you’re not alone. After all, as an entrepreneur, revenue is a top priority for you if you wish to expand, scale, and grow your business.

How do you determine what other business owners make, though, and what should you be looking to make? While there’s no single answer to these questions, here’s what we know about how much business owners make and how you might improve your profits.

How Much Does a Small Business Owner Make?

According to the US Code of Federal Regulations, a “small business” is defined either by the number of employees or the value of its annual receipts. Given that the definition is so broad, there’s no single “average” amount of money that a small business makes. However, we may consider some generalizations to give you a better understanding of salary ranges.

  • As of February 2023, the average small business owner makes $64,358 per year, according to Payscale
  • New business owners – with less than 12 months of experience – earn just under $58,000
  • More experienced owners – with between one and four years of experience – earn roughly $60,000

Typically, the more experienced the small business owner, the more they earn and take home in annual salaries. There’s significant variation, though. Many small business owners make far more, or less, than these figures.

How Much Does a Business Owner Make in my Industry?

Unsurprisingly, business income varies widely across the US depending on industry. So, the average business owner salary for a retail business could be entirely different from, say, a tech firm’s salary.

If we look at some data from the U.S. Bureau of Labor Statistics, however, we can see what individuals across the US earn based on their occupation or the type of business they run. Personal trainers, for example, earn around $45,870, while makeup artists can make over $124,380.

What Affects How Much a Business Makes Per Year?

Businessman in white shirt adding another coin to a rising pile of money.

There are many variables affecting how much a business in the United States makes per month, quarter, or year. The variables include:

  • Demographics: The size of the customer base can directly affect a small business owner’s salary
  • Experience: More experienced business owners may have a better understanding of how to streamline their business to generate revenue (e.g. by increasing profit margins and reducing operating costs)
  • Industry: Industry demand can impact how much you might charge for your services, which influences your overall profits
  • Location: The physical location of your business can play a significant role in determining how much your company makes per year

Other factors, such as seasonal demand and the cost of living, can also influence your profits.

How Can I Earn More Money As a Business Owner?

It all depends on your industry. However, if you’re a small business owner looking to earn more money, here are some general tips. 

  • Look for ways to boost productivity. This might include streamlining your operations or automating some processes
  • Make sure you’re charging a competitive fee for your goods and services
  • Undercharging could be costing you revenue
  • Market your business to increase your audience reach, find new customers, and upsell your products
  • Monitor your cash flow, ensure invoices are paid promptly, and develop a process for chasing late payments

Can Financing Help Me Earn More Money?

Yes. When used responsibly, business loans can help you grow your business – and earn greater profits. 

  • If you’re ready to scale your business, a loan can give you the funds you need to invest in new equipment, hire team members, and accelerate growth  
  • You can use the money to boost your marketing efforts and reach customers, which helps you grow your business in the long term 
  • When you’re hoping to move into new territories or markets, a loan enables you to expand without worrying about the financial implications of your decision 

Although there’s no guarantee that a loan will help you earn more money, it gives you the freedom you need to take your venture to the next level. Over time, this can result in higher revenue.

Get Small Business Financing | Yarrow Financial

At Yarrow Financial, we understand how important it can be for business owners to access funding quickly and with minimal fuss. That’s why we offer small business loans which can be processed in as little as 24 hours – and we approve 95% of the applications we receive! 

If you need a business loan, cash advance, or refinancing solution with flexible payment options, we can help. Simply browse our website and check the rates on offer today!

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