40+ Small Business Statistics You Should Know
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In a world where big tech and major corporations take up most of the headlines, it's actually the local shops, independent consultants, and family-owned companies that make up 99.9% of all U.S. businesses. Since small businesses (which the Office of Advocacy typically defines a small business as an independent business that has fewer than 500 employees) are such a massive force in the U.S., it’s important to understand them. So, in this blog post, we feature more than 50 statistics that paint a fascinating picture of what's really happening in the small business world. Keep reading!
Top 10 small business statistics
Small businesses make up 99.9% of U.S. businesses.
There are 33.2 million small businesses in the U.S.
6 million small businesses have paid employees.
45.9% of Americans work for a small business.
45.9% of Americans work for a small business.
43.3% of business owners are women.
41% of small business owners said they struggled to fill job vacancies.
91% of small businesses say A.I. will help them grow.
73% of small businesses have a website.
28% of small business owners said their motivation to go into business was being ready to be their own boss.
Small business statistics
Now, here are more than fascinating 50 small business statistics!
General statistics on small businesses
86% of U.S. adults say small businesses have a positive effect on the direction of the country. (Source: Pew Research)
While people might have mixed feelings about big corporations, they understand that local businesses create jobs, drive innovation, and strengthen neighborhoods. It's telling that in our such a large country with diverse opinions, support for small businesses is extremely widespread.
Small businesses make up 99.9% of U.S. businesses. (Source: Pew Research)
This staggering statistic really puts things in perspective - while big corporations might dominate the stories we read about online, they're actually a tiny fraction of American businesses. Think about it: walk down any street, browse online, or flip through local services - you are likely to run into a small business. The small business community is anything but small.
There are 33.2 million small businesses in the U.S. (Source: U.S. Chamber of Commerce)
The sheer scale of small business in America is mind-boggling - 33.2 million businesses, each representing someone's dream, investment, and hard work. To put this in context, that's more than the entire population of Texas all running their own businesses. It shows just how deeply entrepreneurship is woven into this country.
6 million small businesses have paid employees. (Source: Pew Research)
Here's an eye-opening perspective on employment - while we have 33.2 million small businesses, only 6 million have employees. This reveals that most small businesses are solopreneurs. It's a key insight into how modern entrepreneurship works - you don't necessarily need a big team to make a big impact in today's market.
California, the most populous state, has the most small businesses of all U.S. states with 4.1 million small businesses. (Source: Oberlo)
This really puts California's economic engine into perspective - it houses 4.1 million small businesses in one state. When you consider that each of these represents an individual or family taking a chance on their dreams, it's no wonder California continues to be a magnet for business innovation.
Alaska, the third least populous state, has the least small businesses of all U.S. states with 71,781 small businesses. (Source: Oberlo)
Alaska, while not the least populous state (although close to it at number three) is also home to the least amount of small businesses. However, there are 71,781 small businesses in Alaska, which is still quite impressive.
33% of small businesses launched with less than $5K in funding. (Source: Chamber of Commerce)
This statistic highlights how a lot of entrepreneurs are bootstrapping their way to success with minimal funding. While $5K might seem tight, creative founders are finding ways to test ideas and grow organically before seeking larger funds.
Employee statistics
49% of businesses that have employees have one to four workers. (Source: Pew Research)
This stat beautifully captures a fact of American small business - many are truly "small" operations. Almost half of all employer businesses are running with just a handful of people, reminding us that you don't need a huge team to make an impact. It challenges the notion that business growth always means expanding your headcount.
1% of small businesses with paid employees have 100 to 499 workers. (Source: Pew Research)
This tiny percentage really puts "small business" into perspective. While we often picture small businesses as a tiny team, that’s not always the case, and some have hundreds of employees. And while this is not as common as a smaller team, it’s still pretty remarkable.
45.9% of Americans work for a small business. (Source: Chamber of Commerce)
Almost half of America's workforce works a small business. This really drives home just how crucial these businesses are to our economic health.
61.6 million Americans work for a small business. (Source: Chamber of Commerce)
This remarkable statistic shows the vital role of small businesses in America's economic fabric. With more than 60 million Americans employed by small businesses, these companies are helping put food on the table for tens of millions of families and powering communities across the country.
Demographics of small business owners
43.3% of business owners are women. (Source: Chamber of Commerce)
The growing representation of women business owners signals a powerful shift in entrepreneurship. These women entrepreneurs are reshaping industries and inspiring future generations while driving economic growth.
41% of small business owners are foreign-born. (Source: Chamber of Commerce)
This statistic beautifully captures the entrepreneurial spirit of immigrants in America. At 41%, their significant contribution highlights how immigration continues to fuel American business dynamism.
14% of small businesses are co-owned by men and women. (Source: Pew Research)
The 14% co-ownership rate between men and women reveals an interesting dynamic in small business partnerships. These collaborative businesses blend diverse perspectives and leadership styles, though those arrangements are less common .
35 is the average age people open a business. (Source: Chamber of Commerce)
The average age of 35 for starting a business makes a lot of sense. By this point, entrepreneurs have typically gained valuable work experience and industry knowledge, while still maintaining the energy and adaptability of youth. It's a sweet spot that combines professional maturity with the boldness needed to take calculated risks.
6% of business owners are 34 years old or younger. (Source: Chamber of Commerce)
The surprisingly low 6% figure of young business owners highlights both challenges and opportunities. While factors like student debt and limited capital may hold back a lot of young entrepreneurs, this statistic shows that they’re a small but mighty force in business.
Business longevity and success
35% of small businesses had been running for five years or fewer in 2021. (Source: Pew Research)
With over a third of small businesses being relatively young ventures, we're seeing a strong wave of entrepreneurship. This mix of fresh business alongside established companies creates a very interesting landscape.
65% of small businesses are profitable. (Source: Guidant Financial)
The 65% profitability rate among small businesses paints a nuanced picture. While it's encouraging that almost two-thirds are making money, it also means a significant portion are struggling to turn a profit. This reality check reminds us that success isn't guaranteed in business.
65% of small business owners say their businesses are in a healthy space. (Source: Chamber of Commerce)
A similar figure for both profitability and perceived business health is interesting. It shows small business owners are quite possibly very realistic about their situations – they're not viewing their ventures through rose-colored glasses and are quite pragmatic.
Challenges faced by small businesses
42% of small businesses fail due to lack of demand in the market. (Source: Chamber of Commerce)
Market demand is the lifeline of any business, and this statistic really drives that point home. A lot of entrepreneurs fall into the trap of launching products or services they're passionate about without first confirming if enough customers actually want them. It's like opening a gourmet coffee shop in a neighborhood that mostly drinks tea - even with great quality, you might struggle to find buyers.
38% of small businesses fail due to lack of money. (Source: Chamber of Commerce)
Running out of cash can be terrifying for any business owner. Even profitable companies can hit the wall if they can't cover day-to-day expenses or weather slow periods. A lot of owners underestimate how much money they'll need for inventory, payroll, and unexpected costs, leaving them vulnerable when sales take longer than expected to materialize or when emergencies strike.
23% of business owners said their biggest challenge was inflation. (Source: Guidant Financial)
Inflation hits small businesses hard. When costs for everything from supplies to utilities keep climbing, owners face a tough choice: raise prices and risk losing customers, or absorb the higher costs and watch their profits shrink. For a lot of businesses operating on thin margins, this constant pressure on their bottom line can be tough.
16% of business owners said their biggest challenge was recruiting or retention. (Source: Guidant Financial)
Finding and keeping great employees has become a real headache for a lot of small businesses. While large companies can offer hefty benefits packages and perks, smaller operations often struggle to compete for talent. Plus, when a key team member leaves, it hits small businesses especially hard since each person often wears multiple hats and has unique knowledge about the business.
Hiring and workforce trends
45% of small businesses said they searched for new people in 2023 compared to 33-36% in 2021. (Source: Chamber of Commerce)
This jump in hiring activity really shows how the business landscape shifted after the pandemic. More small businesses got back into growth mode and started expanding their teams.
41% of small business owners said they struggled to fill job vacancies. (Source: Chamber of Commerce)
The labor shortage hits small businesses particularly hard. They may struggle to match the competitive salaries and benefits packages of larger companies. Plus, a lot of small businesses require workers with specific skills or experience, making the candidate pool even smaller.
Over 90% of small business owners said they struggled to find qualified applicants for their jobs. (Source: Chamber of Commerce)
Over 90% of small business owners report struggling to find qualified applicants for their jobs, highlighting a significant hiring challenge. Factors such as skill gap and competition for talent contribute to this issue. Small businesses often face challenges finding the workers they need.
Technology use and efficiency
95% of small businesses say they use at least one technology platform. (Source: Chamber of Commerce)
Small businesses have embraced technology platforms as essential tools for survival and growth. From payment processors and social media management to accounting software and customer relationship systems, these technologies are helping small businesses stay competitive.
87% of small businesses said they were able to improve efficiency due to technology. (Source: Chamber of Commerce)
Technology has become a game-changer for small businesses, helping them work smarter rather than harder. From streamlining operations with digital tools to automating repetitive tasks, tech solutions have allowed business owners to save time, reduce errors, and focus on growth.
91% of small businesses say A.I. will help them grow. (Source: US Chamber of Commerce)
Small businesses see AI as a game-changer for their growth, and it's easy to understand why. AI tools can help them compete with larger companies by automating routine tasks, understanding customer behavior better, and making smarter business decisions - all without needing a massive team or budget.
Small business marketing and promotion
73% of small businesses have a website. (Source: Zippia)
Having a website has become essential for business survival for many industries. That 73% figure shows most small businesses recognize they need an online presence to reach customers, build credibility, and compete effectively. Yet it also reveals a concerning fact – more than a quarter of small businesses might be missing out on crucial opportunities by staying offline.
52% of small businesses use social media to promote their business. (Source: LocaliQ)
The widespread adoption of social media marketing among small businesses reflects its cost-effective nature and broad reach. For budget-conscious entrepreneurs, platforms like Instagram and Facebook offer powerful tools to connect with customers, showcase products, and build brand awareness without super high costs. This digital shift has become essential for staying competitive in today's market.
39% of small businesses use SEO to promote their business. (Source: LocaliQ)
This statistic reveals that while SEO is a powerful digital marketing tool, most small businesses haven't jumped on board yet. The 39% who do use SEO are tapping into a cost-effective way to get found online and attract local customers through search engines. Surprisingly, this means over 60% of small businesses might be missing valuable opportunities to grow their online presence.
39% of small businesses use email marketing to promote their business. (Source: LocaliQ)
The 39% adoption rate of email marketing among small businesses reflects both opportunity and hesitation. While a lot of businesses usee email's cost-effectiveness and direct customer connection, over half haven't tapped into this powerful tool. This gap suggests that despite email's proven ROI and ability to nurture customer relationships, many small businesses might find it overwhelming or aren't sure where to start.
Facebook is the most common social media platform businesses use for marketing. (Source: LocaliQ)
Facebook's dominance in business marketing makes perfect sense when you look at the numbers. With almost 3 billion monthly active users and sophisticated advertising tools, it offers unmatched reach across diverse age groups and demographics. Plus, its robust targeting options make it an appealing choice for businesses of all sizes.
Businesses with blogs say they get 55% more website visitors. (Source: Hubspot)
Blogging is a powerful traffic magnet. When businesses regularly publish quality content, they create more entry points for search engines to find them. Fresh blog posts also give people a reason to keep coming back, share content on social media, and link to your site as a resource. That's why consistent bloggers see such a significant boost in visitors.
65% of businesses say their top lead source is customer referrals. (Source: LocaliQ)
The dominance of customer referrals as a top lead source reveals a fundamental truth about business growth: happy customers are your best marketers. When existing clients recommend your business, they're essentially providing pre-qualified leads who come with built-in trust. This word-of-mouth marketing is powerful because people naturally trust recommendations from those they know over traditional advertising claims.
82% of businesses say they use multiple channels to promote their business. (Source: Constant Contact)
Most businesses recognize that customers interact with brands across various touchpoints - from social media and email to traditional advertising and in-person experiences. This forces 82% of businesses to use multiple channels to promote their business to maximize visibility and engagement opportunities.
Small business owners spend an average of 20 hours a week on marketing. (Source: Constant Contact)
Marketing is a heavy lift for small business owners, taking up about half of a standard work week. This significant time investment often includes managing social media, creating content, and running email campaigns. While essential for growth, these marketing duties frequently compete with other crucial business operations, putting extra pressure on already-stretched entrepreneurs.
47% of small businesses do their own marketing. (Source: Leadpages)
Almost half of small business owners handle their marketing in-house, which makes sense given tight budgets and the rise of user-friendly digital tools. While this DIY approach can save money, it often means entrepreneurs are stretching themselves thin – juggling marketing alongside core business operations. Many feel they know their brand best but struggle to find time for consistent marketing efforts.
76% of businesses are satisfied with the results they get from search advertising. (Source: LocaliQ)
With tools to target specific audiences, control spending, and adjust campaigns, companies can efficiently use search advertising to reach potential customers actively looking for their products or services. This explains why three-quarters of businesses find it worthwhile.
71% of businesses are satisfied with the results they get from SEO. (Source: LocaliQ)
The strong satisfaction with SEO reflects how it's become a reliable part of digital marketing. While not every business hits a home run with their SEO efforts, most find it delivers steady, measurable results over time. The fact that over two-thirds of companies are happy with their SEO investment shows it's not just hype.
Growth plans
24% of small businesses planned to increase staff in 2024. (Source: Guidant Financial)
The modest 24% hiring outlook among small businesses reflects a cautious yet optimistic approach heading into 2024. Almost a quarter of small businesses still seeing enough growth potential to expand their teams suggests underlying confidence in their markets and prospects.
18% of small businesses planned to invest in digital marketing in 2024. (Source: Guidant Financial)
This surprisingly low percentage likely reflects the resource constraints a lot of small businesses face, along with potential knowledge gaps about digital marketing's importance. While larger companies are diving deep into online strategies, many small businesses still rely on traditional marketing or referrals.
Motivations for starting a business
28% of small business owners said their motivation to go into business was being ready to be their own boss. (Source: Guidant Financial)
This statistic reflects a fundamental drive among entrepreneurs - the desire for freedom. A lot of small business owners reach a point in their careers where they've gained enough experience and confidence to break free from traditional employment. They're ready to make their own decisions, set their own schedules, and shape their own business destiny. For these people, the appeal of being "the boss" outweighs the security of a regular paycheck.
23% said their motivation was dissatisfaction with corporate America. (Source: Guidant Financial)
Almost a quarter of respondents pointed to growing frustrations with traditional corporate environments as their key motivator. This trend likely reflects common complaints like rigid hierarchies, limited work-life balance, and lack of control. After experiencing these constraints firsthand, many are seeking more freedom and meaning.
14% said their motivation was wanting to pursue their passion. (Source: Guidant Financial)
The relatively small percentage of people driven by passion reveals an interesting insight about career motivations. While pursuing one's passion is often celebrated in popular culture and career advice, only 14% of respondents actually cited it as their primary motivation. This suggests most people prioritize other factors like stability, compensation, or work-life balance when making career decisions.
9% said their motivation was being laid off or outsourced. (Source: Guidant Financial)
The 9% figure highlights an important reality of today's job market - career changes aren't always voluntary. When faced with layoffs or outsourcing, workers are forced to pivot. While challenging, these transitions can sometimes lead to unexpected opportunities, even though they stem from difficult circumstances.
Types of small businesses
27% of small businesses established were new businesses. (Source: Guidant Financial)
This stat highlights that only about a quarter of small businesses that popped up were truly new businesses, rather than existing businesses changing hands or expanding to new locations.
31% of small businesses established were bought businesses. (Source: Guidant Financial)
The significant portion of bought businesses - 31% - shows that a lot of entrepreneurs prefer taking over existing operations rather than starting from scratch. This approach offers instant infrastructure, established customer bases, and proven business models.
16% of small businesses are in retail. (Source: Guidant Financial)
Looking at the small business landscape, retail makes up a smaller slice than you might expect - just 16%. This actually makes sense when you consider all the other sectors out there, from professional services to restaurants to construction firms. While retail stores are highly visible in our communities, they're just one piece of America's diverse small business ecosystem.
13% of small businesses are in the food or restaurant business. (Source: Guidant Financial)
Food or restaurant businesses take up another significant portion of small businesses, at 13%. These businesses are ones you may interact with constantly and provide the meals you love.
Want to learn more?
As these statistics show, small businesses continue to be both the backbone of our economy and a powerful force. Hopefully, this blog post has helped you learn a little more about small businesses, and how much determination and creativity go into each one. But do you want to learn more? We are a Squarespace design agency committed to helping entrepreneurs and small businesses improve their online presence with our Squarespace web design services, Squarespace templates, and blog content. Here are a few of our favorite posts to get you started!
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