Small Business Statistics in 2024

The U.S. Small Business Administration defines a small business as a firm with revenue ranging from $1 million to over $40 million and an employee workforce of under 500.5 Based on the SBA’s definition, the 33.2 million small businesses in the United States make up 99.9% of all firms across the country.27

These businesses form the backbone of the United States economy as not only a vital source of innovation and employment opportunities but also a huge driver of the nation’s financial growth.

We’ve researched the latest data and statistics in the U.S. and around the world to bring you the big picture of small businesses and the factors that shape their struggles and successes.

Key small business statistics

Here’s a roundup of the key small business statistics in 2024:

Small businesses make up 99.9% of all U.S. firms, with around 33.3 million of these businesses in total across the country.28 They’re also responsible for almost two-thirds of newly created jobs in the U.S. between 1995 and 2021.27
Small businesses also comprise 99.7% of firms with paid employees and 97.3% of exporters while contributing 43.5% of the country’s total gross domestic product (GDP).29
Small- and medium-sized enterprises are the backbone of our world economy, with over 400 million existing worldwide.31
According to Fora Financial, there are nearly 36,000 small businesses that are making $1 million to $2.5 million per year.9
Self-employed small business owners in the U.S. earn an average of $51,816 per year. However, for unincorporated businesses, this decreases to an average of $26,084 per year.5
Small businesses that have one employee typically bring home around $44,000 per year, according to Fora Financial.9
Texas is home to one-tenth of all small businesses in the U.S., the most in the country. It is followed by California (9%), Florida (9%) and Georgia (6%).11
Around 18% of small businesses will fail within a year of opening, while half fail after five years and approximately 65% after operating for up to 10 years.5
Women own around 26% of all small businesses in the U.S., while just under half are owned by Generation X, and only 14% of small business owners are Black, Hispanic or Asian.11
Almost four-fifths of small business owners were self-financed when launching, while 16% were funded by bank loans. Loans from family and friends made up the remaining 2% to 6%.5
Nearly half of all online micro-businesses in the United States made their supplemental income their main income as of August 2023.10

How many small businesses are in the U.S.?

According to data from the U.S. Small Business Administration, there are 33.3 million small businesses across the country, making up 99.9% of total U.S. firms.28 These figures also show that there are 61.6 million people who work at a small business, making up 45.9% of all U.S. employees as of 2023.28 Of the 33.3 million small businesses, over 4.5 million were in the professional, scientific and technical services industries.28

Around 1.2 million small businesses opened between March 2021 and March 2022, while nearly 834,000 closed. Small businesses contributed to 70% of the total new jobs created during this same period.28

Figures from the SBA also suggest that around half of all businesses start at home, and 60% of businesses with no staff or employees are based at home. That means around 19 million businesses in the country are home-based.5

How many small businesses are there in the world?

Statistics from the SME Finance Forum’s Economic Indicators Database and the World Bank’s Country Indicators show that there are 196 million micro businesses and 11 million small businesses in the world.16

India has the highest number of micro and small businesses out of any country, with over 63 million.16 This is followed by:16

Indonesia: Over 62 million.
Nigeria: Almost 37 million.
United States: 33.3 million.28
Bangladesh: Almost seven million.

However, when assessing these figures by the number of firms per 1,000 citizens, Indonesia comes out on top with over 235 micro and small businesses for every 1,000 citizens. This is followed by Nigeria (215) and San Marino (141).16

Looking at all micro and small businesses worldwide, the service industry is the largest, with over 93 million firms, followed by:15

Trade industries: Nearly 72 million.
Manufacturing: Over 34 million.
Agriculture and other: Over eight million.

How many new businesses are started each year?

Almost 5.5 million new business applications were filed in 2023, breaking the 2021 record of 5.41 million. In fact, the rate of new business applications has more than doubled since 2012.24

According to U.S. Census data, these applications dropped by 6.3% in Michigan and 8.7% in South Carolina but only by 1% in North Carolina. Retail trade industries saw the biggest number of business applications at over 978,000. This was followed by professional services (686,000) and construction (542,000).5

If you’re interested in starting a new business but unsure of where to start, read our guide on the best LLC services of 2024.

What are the most common small businesses?

The U.S. Bureau of Labor Statistics reported that there are more small businesses in professional and business services than in any other industry.21

This is followed by education and health services, then trade, transportation and utilities. Financial activities and construction round out the top five industries when it comes to the number of small businesses in the U.S.21

What percentage of businesses are small businesses?

In the United States, small businesses make up 99.9% of all firms.28 When looking across the world, small businesses account for 95% of all firms and between 60% and 70% of all employment.31

However, in the E.U., small businesses represent around 99% of businesses and provide 85% of new jobs and two-thirds of private sector employment.31 At the start of 2023, there were 5.5 million small businesses in the United Kingdom, accounting for 99.9% of businesses in the U.K.30

What percentage of small businesses fail?

18% of small businesses don’t last to the end of their first year, according to the U.S. Bureau of Labour Statistics. Around half of all small businesses fail within five years, and around 65% by their tenth year of operation.22 Although around 595,000 businesses close each year in the U.S., 627,000 new businesses are created on average, which means there is a net overall growth of around 32,000 new businesses a year.5

A survey by CB Insights indicates that finances are unsurprisingly the biggest cause of business closures, with 38% of startups failing as a result of being unable to secure financing or running out of existing funds. However, 35% also failed due to the lack of market demand and one-fifth due to their competition.4

Breaking it down by industry, small businesses in healthcare and social assistance have the best success rate, with 85% of enterprises still operational after one year, putting the industry 5% above the national average survival rate.5

The healthcare industry as a whole has a success rate of 60% for small businesses in their first year. However, on the other side of the scale, businesses in construction, transportation and warehousing have a success rate of 30% and 40%, respectively, after five years of operating – the lowest of any industry.5

Looking at outright failure rates, the technology industry has the highest in the United States — almost three in four fintech startups close within two decades, and just under a third of fintechs with venture backing also result in failure.5

Figures from the BLS show that over one-fifth of failing startups don’t have a solid marketing strategy in place. Over one-third fail as a result of lacking a product-market fit.5

Small business revenue statistics

Almost 19 out of 20 firms experienced challenges with business finances in 2022, with over 80% reporting issues with increases in costs for goods, services and/or wages. More than half of all businesses also said they had difficulties with operating expenses and uneven cash flows.7 Additionally, U.S. Census data shows that around 58% of small business owners were concerned about their business’s financial health in 2022.23

However, based on research from Fora Financial, it’s estimated that there are around 36,000 businesses that make between $1 million and $2.5 million per year — a number that is continuing to grow.9 At the same time, a U.S. Chamber of Commerce report suggests that approximately 65.3% of small businesses in the U.S. are “thriving and making money.”5

The average small business revenue in the U.S.

Small businesses in the U.S. with a single owner/employee — the majority of which are based out of the home — make, on average, around $44,000 per year, although almost two-thirds of these businesses bring in under $25,000 annually.9

However, revenue tends to grow as the number of employees does — businesses with one to four employees make an average of $387,000 per year. For those with up to nine employees, that jumps to around $1 million annually, and small businesses with 10 to 19 employees average $2,164,000 in annual revenue.9

A report from Biz2Credit shows the continued prevalence of gender inequality, with the revenue gap between women- and men-owned small businesses at 34%, or $237,503, in 2023. Despite this, annual revenue for women-owned businesses did go up by 15.5% between 2022 and 2023, increasing from $391,582 to $452,446.2

What percentage of sales are small businesses responsible for in the U.S.?

Small businesses are a crucial part of the U.S. economy, making up the vast majority of the country’s exporters at 97.3%. With over $413 billion in known exports, these firms represent almost one-third (32.6%) of known export value from the U.S.29

In addition to this, small businesses make up 43.5% of the country’s GDP and 35.6% of all private sector receipts — valued at roughly $13.3 trillion.29

Small business growth statistics

While specific metrics and measurements will vary by industry and business type, generally speaking, you can define a good growth rate for a small business as one that is higher than the growth rate of the economy as a whole.13

According to research by Fincent, small businesses in the U.S. have an average growth rate of between 7% and 8% per year, roughly equating to a small business with 10 employees adding one or two new employees to their team every year.8

Fastest-growing small business

Data from the U.S. Bureau of Labour Statistics in 2020 reveals that employment in the forestry industry is projected to grow faster than any other, with a 3.7% annual rate of change.20 This is followed by:

Individual and family services: 3.4%.
Support activities for mining: 2.8%.20

However, five of the fastest-growing industries are in healthcare and social assistance, the most prevalent sector of all.20

Small business ownership statistics

How many small business owners are in the U.S.?

Data suggests that in the United States, there are currently over 783,183 business owners, with the average age of business owners being around 44 years old.32

The majority of business owners in the U.S. are white, and although studies vary in the exact percentage, it’s thought that around 85% of businesses in the country have majority-white ownership.18 This was followed by:18

Asian Americans: 11%.
Hispanic or Latinx: 7%.
Black or African Americans: 3%.

In terms of age ranges, the majority of small business owners in the U.S. are part of Generation X (47%), with just over one-third of entrepreneurs categorized as Boomers and 16% as Millennials.11 When it comes to education levels:11

44% of small business owners hold up to a Bachelor’s degree.
Around 27% held a Master’s degree.
15% carried a high school diploma or GED.
11% held an Associate’s degree.
4% were Doctorate holders.

Research from the Small Business Administration suggests that, while women made up 47.2% of workers, they owned 43.4% of total businesses in the U.S.28 Hispanics made up 17.2% of the workforce and 14.5% of business owners, and other racial minorities formed over a quarter (26.6%) of total workers and just over one-fifth (20.4%) of business owners.28

Overall, it’s believed that while immigrants make up only 13.6% of the U.S. population, they represent around a quarter of the country’s entrepreneurs.1

However, the smallest group was veterans, who made up 4.6% of the workforce but owned 6.1% of businesses — the only group with a higher owner percentage than worker percentage.28

The main motivation for those going into business for themselves was to be their own boss, with 28% of respondents to a Guidant survey saying they felt ready to do this. 23% were dissatisfied with corporate America and 14% were driven to pursue their passions.11

Women-owned small business statistics

The National Women’s Business Council projects that around 39.1% of U.S. businesses, or 14 million, are owned by women — an increase of 13.6% between 2019 and 2023. Around 10.2% of all women-owned businesses are employer firms, and these make up almost a quarter (23.8%) of all employer firms countrywide.17

These businesses employ over 12 million workers, and between 2019 and 2023, their total share of the workforce grew from 8.4% to 9.2%. They also generated $2.3 trillion, comprising the majority (84.5%) of revenue made by women-owned businesses and around 5.1% of all revenue made by U.S. employer firms.17

Looking at non-employer firms, those owned by women represent 42.2% of all nonemployer firms nationwide, coming in at around 12.6 million. They also make up the vast majority (89.8%) of all women-owned businesses. These businesses generated $419.3 billion in revenue, over a quarter of all non-employer firms in the U.S. and 15.5% of all revenue made by women-owned businesses.17

Businesses owned by Black and African American women have increased to over two million. They make up almost 15% of all women-owned businesses as well as over half of all Black-owned businesses.17

With around 528,000 employees, these businesses employ around 4.3% of the total women-owned business workforce and contribute 3.6% of total women-owned business revenue, with $98.3 billion generated.17

The average revenue of Black and African American women-owned businesses increased by 32.7% between 2019 and 2023, while the average revenue across all women-owned businesses grew by 12.1%.17

Hispanic and Latino women-owned businesses also grew in this time period, now making up 14.3% of all women-owned businesses and 42.3% of all Hispanic and Latino-owned firms. With around 845,000 employees, these companies employ around 6.9% of the total women-owned business workforce.17

They have also generated over $175 billion in revenue during this time, making up 6.5% of the total revenue generated by women-owned businesses.17

In total, the funding acceptance rate for women-owned business applicants was 35%, higher than the 20% acceptance rate for men-owned business applicants. This represents an 18% increase year over year. This indicates that female entrepreneurs are more likely to seek funding for their business ventures.2

How much do business owners make?

U.S. Census data suggests that the average annual income of small business owners who are self-employed is $51,816, although for unincorporated businesses, this drops to $26,084.5 However, a GoDaddy report shows that one in six microbusiness owners in the U.S. and the U.K. are bringing in over $100,000 per year.10

In the U.S., this equates to:10

56% of Generation Z business owners.
60% of Generation X business owners.
62% of Baby Boomer business owners.

In the U.K., just around a quarter of each age group brings in over £180,000.10

In terms of average earnings by the businesses themselves, those owned by women have seen their revenue remain largely consistent between 2022 ($87,953) and 2023 ($87,364). However, average earnings for men-owned businesses have decreased by 3%, from $152,054 to $147,522 in the same time period.2

Small business employment statistics

Figures from the Small Business Administration credit small businesses with 63% of new jobs created in the U.S. between 1995 and 2021.27 These businesses make up 99.7% of employment firms, as well as almost half of the private sector workforce (46.4% – 61.7 million workers) and 39.4% of the private sector payroll at $2.9 trillion.29

Small businesses employ a similar percentage of the United States private sector workforce (46%) and overall contribute 43.5% of the country’s GDP. These firms are demonstrably crucial to America’s economy, creating 1.5 million jobs per year.27

SBA data shows that 17.9 million jobs were added by opening and expanding U.S. establishments, seven million more than the jobs lost by closing and contracting establishments between March 2021 and March 2022.28

Of these, small businesses contributed 4.9 million, or 70%, of the net increase in employment opportunities.28

However, at the same time, the National Federation of Independent Business reported that 47% of small business owners had difficulty filling job openings.27 Additionally, a 2023 report on employer firms found that almost two-thirds of small businesses that were struggling to hire employees increased wages to combat this, compared to just over a quarter that enhanced benefits and non-wage compensation.7

Just 22% of small businesses offered remote or flexible working, while over half increased their employees’ workload and 29% reduced their total operations.7

How many employees does a small business have?

The SBA reports that the vast majority of small businesses — around 81.7% — have no employees.29 These are called nonemployer firms. In 2020, small firms averaged around 11.7 employees, while large firms averaged 3,297.3.29

Businesses under two years old had on average six employees compared to those older than 20 years which averaged 60.29 Overall, across 2020, the average number of employees at all employer firms was 24.9.29

What percentage of U.S. businesses employ more than 100 workers?

There are a total of 132,989,428 U.S. employees as of 2019. While larger companies (over 500 employees) make up less than 0.5% of entities, they employ 23% of the workforce. 25% work at medium companies (100 to 499 employees). 52% of employees work at businesses with less than 100 employees.19

Small business website statistics

It’s estimated by Zippia that around 73% of online shoppers search for a business’s website before making a purchase.32 The U.S. Chamber of Commerce estimates that 71% of small businesses have a website.5

Additionally, 55% of online shoppers look for online reviews, and a whopping 81% will run a general web search on the business before buying.5

Small business lending statistics

Thanks to the Community Reinvestment Act, large banks are required by law to report new small business loans. As such, in 2021, banks reported $102.7 billion in loans to businesses across the U.S. that brought in $1 million or less in revenue.3

Through loans that amounted to $100,000 or less only, it was reported that a total of $125.7 billion was lent — and for loans amounting to $1 million or less, the total figure rose to $354 billion.3 The Small Business Index from Q1 2023 reports that 49% of small business owners reported good access to capital or loans, down from 67% in Q2 of 2017.25

Not all startups and entrepreneurs rely on bank loans immediately. In fact, just 16% are funded by bank loans, and 2% to 6% of initial funding for small businesses comes from friends and family. Around 78% of small business owners launch using their own money.5

A report from the Federal Reserve Banks found that two-thirds of businesses have relied on funds from friends and family or the owner’s personal savings in the last five years. 55% of businesses have taken government funding and 51% have borrowed from a financial institution or lender.7

Here are some more statistics about small business funding:

The SBA said that, in 2020, it loaned over $764 billion in 14 million loans to small businesses. The average loan from the SBA amounts to $417,316, while the maximum the SBA will loan out is $5 million.5
89.5% of smaller loans that small businesses take out come from larger banks. These institutions have a 25% approval rate for SBA loans, while small banks have an approval rate of 49%.5
In 2022, around 45.3% of businesses that applied for credit received all that they requested, while 32.4% received a partial amount and 13% received no funds at all.23
The most common reason given for lending was to meet operating expenses (62.2%), while just over two in five businesses said the loan was to expand business, pursue new opportunities or acquire business assets.5 23.8% needed to replace capital assets or make repairs, and 16.2% needed to refinance or pay down debt.5
26.8% of businesses currently carry at least $50,000 in debt.23

Small business challenges in 2024

Small businesses can be susceptible to a number of challenges, and the biggest of these, according to a Fed Small Business survey, is the rising cost of goods, services and/or wages, with four in five respondents selecting this option.7 It was followed by:7

Cost of paying operating expenses: 54%.
An uneven cash flow: 54%.
Weak sales: 47%.
Repaying debt: 32%.
Credit availability: 27%.

To respond to these challenges in 2023, the most common action taken by 56% of businesses was to raise prices.7 Other common actions taken were:7

Using personal funds or cash reserves: 53%.
Taking out loans: 42%.
Making reductions in staff, hours or general operations: 32%.
Making a late payment or not paying at all: 23%.
Taking financial assistance that didn’t require repayment: 18%.

In another study by the U.S. Chamber of Commerce, its Small Business Index showed that 52% of small businesses saw inflation as their biggest challenge at the end of Q1 2024, consistent with levels at the end of 2023. However, 29% of business owners said revenue is their biggest challenge, an increase of 7% in the same time.26

Small business trends in 2024

Here are some more small business trends in 2024:

24% of businesses plan to increase staff in 2024, while 18% will invest in digital marketing. 17% are set to expand or remodel their businesses, and only one in 10 will invest in traditional marketing.11
It’s predicted that in 2024, 27% of new small businesses will be new independents, while 31% will be bought independent businesses. Just under a third will be new franchises, while one in 10 new small businesses will be bought existing franchises.
Around 77% of small business owners believe their businesses will survive the economy today, while 5% do not. Only a third, however, have real confidence in their business.11
More small business owners are Republican than any other party affiliation — 19% are Democrats, 5% are Libertarians and a third say they are unaffiliated with any party.11
One in 10 small business owners approve of the Biden Administration’s response to the economy, but 60% dislike it. Overall, 46% of small business owners are not confident in the political climate of today.11

AI and small business

AI has become one of the fastest-growing trends, not just in the business world but in many areas of life.6 Here are some key statistics from a Constant Contact report about how artificial intelligence is influencing businesses:

Almost three-quarters of businesses (74%) are interested in using AI or automation, and 55% said their interest grew in the first half of 2023.6
Over a quarter (26%) are already using AI or automation, mostly in social media (52%), generative content creation (44%) and email marketing (41%). However, small- and medium-sized business owners say the easiest ways to leverage AI for their business are social media, content creation and analytics.6
Data security, high perceived costs and a potential learning curve represent the biggest concerns for small businesses regarding AI. 46% say they only have a basic level of understanding about how AI or automation can benefit their business.6

Small business cybersecurity

Cybersecurity is also a significant area of concern for businesses in today’s digital landscape. Here are some important facts about cybersecurity for small businesses:

Cybercrime costs reached $8 trillion worldwide in 2023, and it’s predicted this will rise to $10.5 trillion by 2025.14
Businesses lost an average of $1.3 million as a result of cybercrime in 2023.
The average cost of a data breach was $4.45 million across all industries, but it was as high as $10.93 million for the healthcare industry.12
Around 48% of small businesses say their staff is trained on cybersecurity measures, and almost three in four say they feel prepared for cybersecurity threats. However, over one-quarter say that one disaster could cause them to shut down.26

Sources

American Immigration Council – New American Fortune 500 Report Reveals Impact of Immigrant Entrepreneurship.
Biz2Credit – Annual Women-Owned Business Study 2024.
Board of Governors of the Federal Reserve System – Availability of Credit to Small Businesses.
CB Insights – The Top 12 Reasons Startups Fail.
Chamber of Commerce – Small Business Statistics.
Constant Contact – AI Stats and Trends Small Businesses Need to Know Now.
Fed Small Business – 2023 Report on Employer Firms: Findings from the 2022 Small Business Credit Survey.
Fincent – What Is a Good Growth Rate for a Company, and How Can You Calculate It?
Fora Financial – Average Small Business Revenue: What To Know.
GoDaddy – GoDaddy Venture Forward.
Guidant – 2024 Small Business Trends.
IBM Security – Cost of a Data Breach Report 2023.
Indeed – FAQ: What Is a Good Growth Rate for a Company?
Ipsos – Nearly 1 in 3 Americans report being a victim of online financial fraud or cybercrime.
Jessica Osborn (Tableau Public) – Micro and Small Businesses Around the World.
Mastercard Strive (LinkedIn) – Where are the micro- and small businesses around the world? Visualizing the data.
National Women’s Business Council – Annual Report.
Pew Research Center – A look at small businesses in the U.S.
Statista – Monthly number of full-time employees in the United States from April 2022 to April 2024.
U.S. Bureau of Labor Statistics – 5 out of 20 fastest-growing industries from 2019 to 2029 are in healthcare and social assistance.
U.S. Bureau of Labor Statistics – Number of business establishments by size of establishment in selected private industries.
U.S. Bureau of Labor Statistics – Survival of private sector establishments by opening year.
U.S. Census Bureau – ABS – Annual Business Survey First Look 2023 Tables.
U.S. Chamber of Commerce – Map: New Business Applications Surge Across the Country.
U.S. Chamber of Commerce – Small Business Index Q1 2023.
U.S. Chamber of Commerce – Small Business Index Q1 2024.
U.S. Chamber of Commerce – The State of Small Business Now.
U.S. Small Business Administration – 2023 Small Business Profile.
U.S. Small Business Administration – Frequently Asked Questions.
UK Government, Department for Business & Trade – Business population estimates for the UK and regions 2023: statistical release.
National Action Plans on Business and Human Rights – Small & medium-sized enterprises.
Zippia – Business Owner Demographics and Statistics in the US.

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