How much profit would the business need to make, for the owner to recoup his $5,000 investment? In the table below, I show the income and sales of the average sub chapter S Corporation in the latest year the data are available. While the income of the average S corp was less than seven percent of its sales, there was wide variation across major industry sectors on this measure.
More financially successful entrepreneurs tend to form sub chapter S corporations, and less successful ones tend to run sole proprietorships. As one would expect, the numbers are much lower than for the average sub chapter S corporation.
But, as with subchapter S corporations, the the variance across industries in income and revenue is quite large.
Click here for an Excel table that shows average income, sales, and income as a percentage of sales for sole proprietorships in 135 industries in 2008.
Based on this data, what is the average point in revenue when a sole proprietor upgrades to an S corp?
Excellent information, Imagine the 2009 and 2010 figures will show drastic reductions in income.
Looks like many businesses are under reporting income or exploding taxable business expenses.


The statistics shown here are NOT what the owners make- these are statistics for the entire company. Pingback: 30 Days to Becoming an Entrepreneur: What are realistic expectations for self-employment? The balance sheet is a very important financial statement that summarizes a company's assets (what it owns) and liabilities (what it owes). No balance sheet statement is complete (in my opinion) without an income statement to go along with it.
The balance sheet informs company owners about the net worth of the company at a specific point in time. These include the obligations to be paid within one year, including accounts payable, short-term loans, income taxes payable, wages, unearned revenue (e.g.
This is basically the amount left over when you subtract Total Liabilities from Total Assets. Disclaimer: This balance sheet spreadsheet and the information on this page is for illustrative and educational purposes only.
The IRS Statistics of Income provides some data on the average income of sub chapter S corporations and sole proprietorships, which helps to estimate small business owners’ earnings.
The IRS Statistics of Income data also show how well the average sole proprietorship performed.


Because there sole proprietorships are more common than S corps, the IRS provides industry numbers at a much more fine-grained level for sole proprietorships.
Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University. As a small business owner, I find the income statement to be more useful in the general operation of the business, but the balance sheet is still a critical accounting tool that provides a key piece of information. This is done by subtracting the total liabilities from the total assets to calculate the owner's equity, also known as shareholder's equity (for corporations) or simply the net worth. Common current assets includes cash (cash, coin, balances in checking and savings accounts), accounts receivable (amounts owed to your business by your customers usually within 10-60 days), inventory (goods for sale), and prepaid expenses (e.g. In includes the owner's investment(s) and retained earnings (the portion of the profits reinvested in the business).
The average income per owner is far lower than shown here, per the IRS about 73k per owner across ALL of these industries. You can also see how the company resources are distributed and compare the information with similar companies.



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