How much money do small business owners make? That’s a question that’s difficult to answer simply, since there are so many different types of businesses and industries that fit within that category. However, there are some recent statistics that can shed light on what types of salaries certain small business owners are likely to bring in.
How Much Do Small Business Owners Make These Days?
Payscale has found that the average salary for a CEO is $164,749 per year. However, that includes people who hold that role at large companies and those who came into that role without actually starting or owning the business themselves.
According to a recent study by Fundera, 86.3 percent of small business owners said they take a salary of less than $100,000 per year. In fact, 30.1 percent said they don’t pay themselves at all. Of those who do take a salary, most put their range within $20,000 to $50,000 per year.
When you break down earnings by industry, you can learn a bit more. For example, the median salary for a restaurant owner/operator is around $60,000. Retail store owners earn a median income of $51,270 per year. Those who run warehouses earn an average of $55,000 annually. And the median income for those who own construction businesses sits at $62,449 per year.
While some of those numbers were fairly modest, some other types of businesses tend to bring in significantly more. For example, manufacturing executives and executives of holding companies earn an average of around $250,000 per year.
Ten years ago, those figures looked a bit different. Some were significantly lower. For example, the average firm in accommodations and food services earned $37,992 in income, according to the IRS Statistics of Income in 2007. But others have dropped since then, including retail firms, which earned an average of $63,194 back in 2007.
Some of the most profitable types of businesses weren’t even around, or at least weren’t as prominent, at that time. According to Fundera, mobile businesses, sharing economy business and online education businesses are among the most profitable today.
So essentially, the exact salary of a small business owner varies greatly depending on the industry, time in business, and the individual. While many choose not to take a salary at all, at least at first, others earn well into the six figure range. If a high salary is important to you when starting a business, then it might be best to choose scalable businesses like tech or manufacturing firms, rather than Main Street businesses like restaurants and retail shops.
Photo via Shutterstock