Scaling Small Businesses to $1 Million Revenue

This report examines the revenue growth of small businesses in the United States, focusing on the journey of nascent firms toward achieving $1 million in annual revenues. It utilizes a unique dataset to analyze the performance of small businesses during their initial years, specifically comparing outcomes based on the race and gender of the owners. The findings indicate that a small percentage of small businesses reach the $1 million revenue milestone within five years, with significant disparities observed among different racial and gender groups. Black- and Hispanic-owned firms, as well as female-owned businesses, are less likely to achieve this milestone compared to their White- and Asian-owned counterparts. The report also highlights the limited revenue growth among young small businesses and suggests that initial revenue levels may influence the likelihood of reaching $1 million. The implications of these findings point to the need for targeted support from policymakers and financial institutions to address the barriers faced by underrepresented entrepreneurs.