55 Staggering Small Business Statistics & Facts for 2024

The United States is known for its opportunities, especially for entrepreneurs. Individuals from all over dream of striking it big in Silicon Valley or another major startup hub. In fact, according to CNBC’s US World & News Report, recent small business statistics rank the US as the third-best country for starting and running a business. 

But what’s the US economy really like for small businesses? How much of an impact do these businesses make? How many of them fail, and how many actually survive? Below, we’ve gathered the most useful and current data to give you a clearer perspective on the state of American small businesses.

The Top 10 Small Business Stats & Facts

• There are 31.7 billion small businesses in the United States.
• Small businesses provide work for 47.3% of the American workforce.
• The coronavirus pandemic has significantly impacted small businesses in New York.
• 57% of small business owners rely on personal savings to start off.
• Startup statistics show that the most valuable startups are located in the United States and China.
• 20% of small businesses fail in their first year.
• Around 43.7% of small businesses in the US were temporarily closed because of Covid-19.
• Poor cash flow is responsible for as much as 82% of all small business failures. 
• Social media ad spending is projected to reach $110,628 million in 2021.
• 40% of consumers value free WiFi in a small business establishment.

Small Business and the Economy

1. Small businesses in the US employ 47.3% of the American workforce.

(Source: Small Business Trends)

Most of us don’t pay it much thought, but small businesses really help keep the economy stable. In the United States alone, small businesses employ 47.3% of all American workforce. According to these small business statistics for 2021, this equates to 59.9 million people, excluding government employees.

2. Job openings at firms with less than 500 employees were responsible for 40% of new jobs from 1992 through 2012.

(Source: SBA Office of Advocacy)

The number of small businesses has risen by 49% since the 80s. Additionally, the small business stats demonstrate that these smaller companies’ expansions comprise an additional 60% of the new jobs.

3. In 2017, 42% of small businesses had a payroll of less than $100,000.

(Source: NSBA)

Only 13% of smaller firms paid out between $1 million and $5 million to employees that year. A tiny 6% of small businesses had enormous payrolls starting at $5 million and reaching over $150 million.

4.  46% of small businesses have 1–5 full-time or part-time employees.

(Source: NSBA)

Surprisingly, in the same year, a number of small businesses in the US don’t hire any part-time employees at all (41%), although 38% expect to hire more within the year. It likely has a lot to do with the fact that over 50% of small business owners have a more positive outlook on the economy.

5. 75.3% of employers in the private sector were microbusinesses in 2013.

(Source: SBA Office of Advocacy)

Statistics on small businesses show that these businesses employ a total of 10.8% of private-sector workers. The majority of them are likely to be employed in the finance, insurance, and real estate industries. Microbusinesses happen to have an 85% share of these industries back then.

6. An amazing 82% of small businesses provide on-the-job training for their employees.

(Source: NSBA)

Based on small business owner statistics, 61% of them also provide on-site training for specific positions. And another 61% either pay for off-site training, allocate money for certifications, or utilize apprenticeships. With this much investment into their workforce, it’s no wonder that 63% of small business owners retain their employees for four years and longer.

7. Only 5% of small business firms hire union workers.

(Source: NSBA)

Additionally, only 6% of small businesses have been the target of any union campaign. And of those that were, 31% became a unionized firm. In most cases (54%), the union fails to garner sufficient support for unionization.

General Statistics About Small Businesses

8. How many small businesses are there in the US? The answer is a staggering 31.7 billion.

(Source: SBA Office Advocacy)

They account for a striking 99.9% of businesses in the country. 

Small businesses contribute to international trade as well, as they account for 285,334 exporters. These firms comprised 97.5% of all companies that exported goods from the country in 2020.

9. 43.7% of small businesses in the US were temporarily closed due to Covid-19.

(Source: PNAS.org)

According to small business statistics on Covid-19, close to 50% of all small businesses in the US had to close due to the pandemic’s economic impact. Unfortunately, 1.8% of them had to close permanently. Fortunately, 55% of the businesses are still operational.

10. The average lifespan of a small business is 8 ½ years.

(Source: Nav)

Putting up a small business requires an unlimited amount of patience and perseverance. What is the survival rate for new businesses? Well, according to experts, the average lifespan of small businesses is only 8 ½ years.

11. The coronavirus pandemic has made a significant impact on small businesses in New York. 

(Source: US Census Bureau)

The coronavirus pandemic has impacted many small businesses all around the United States. However, according to the small business statistics on Covid and its economic impact, New York has been hit the hardest.

12. Around 84% of small businesses are using at least one major digital technology.

(Source: Nav)

It’s the digital age, and most small business owners use at least one major digital technology to help them with production, sales, marketing, etc. The recent small business statistics reveal that 84% of small businesses are already doing so.

13. Competition from bigger companies is the primary concern among small business owners.

(Source: US Bank)

The previous five-year trend showed economic uncertainty as the top source of their worries. However, surveys show that only 11% are now concerned with it. This is a significant decrease from the 26% slice of the small business owner demographics who originally found economic problems worrying.

14. 53% of small businesses attend trade shows to form vendor and supplier relationships. 

(Source: NSBA)

46% of them market directly to bigger companies, and 18% benefit from mentor-protege program participation. Overall, small businesses go to great lengths to acquire vendor contracts, with nearly 70% stating that they did so by getting in touch with purchasing departments directly.

15. US small businesses statistics show that 42% employ freelancers.

(Source: Forbes / Finances Online)

According to a report from Harvard and Princeton, the freelance industry created almost 10 million new jobs between 2005–2015. In the United States, 64.6 million worked as freelancers in 2020. The number is expected to reach 90.1 million by 2028.

We can expect a portion of the freelancers to turn to copywriting and virtual assistants jobs. As highlighted by experts from Zyro, these two online business ideas are potentially the most profitable.

16. Business statistics show that 60% of small business owners require job applicants to pass a background check.

(Source: NSBA)

Those running background checks do so to protect their business from liability, keep customers safe, or because their contract with a larger firm requires it. In a similar vein, 71% of businesses inquire about past criminal convictions. As a matter of fact, 30% of employers already include this question in their application.

17. According to the latest small business statistics, an average small business owner is around 50 years old.

(Source: Nav)

Quite contrary to popular belief that many businesses have young CEOs, a small business owner’s average age is 50.3 years old. 

18. Over 4 million small businesses in the United States are owned by minorities. 

(Source: Nav)

Minority-owned businesses are making $700 billion in annual sales. To put this into perspective, out of 30.7 million small businesses in the US, only 40% are making a decent profit.

Statistics for Businesses and Financing

19. 57% of small business owners rely on personal savings as their top source of capital when starting a business.

(Source: SBA Office of Advocacy)

Only 3% use their home equity, and 8% actually take out a bank loan. Business credit cards are the least-used method, with only 2% of businesses using them, while 6% use other options.

20. 240,000 small business owners were rejected from the Paycheck Protection Program (PPP) in August 2020.

(Source: The Wall Street Journal, The Wall Street Journal)

New businesses statistics show that over 200 thousand small business owners were flagged on the first release of PPP last year due to many reasons, from clerical errors to more significant wrongdoings. 

Fortunately, the SBA opened the program again on January 11, 2021, and has so far approved 60,000 out of the 240,000 initially rejected borrowers.

21. The pandemic forced 35% of small business owners to use their personal savings to stay afloat. 

(Source: CNBC)

Small business statistics amid the Covid-19 economic turmoil indicate that 35% of small business owners had to use their personal funds via credit cards or savings to keep their business running. A staggering 70% of owners had to use one or more of those resources to survive during the pandemic.

22. Over half of the small businesses didn’t use any type of financing in 2017.

(Source: NSBA)

Small business loan statistics show that 55% of businesses didn’t take any loans back in 2017 when Covid-19 was still beyond everyone’s imagination. However, 63% of small business owners did carry a debt of some kind. Unfortunately, 31% of small firms said they could not get sufficient financing in 2018, and the data from 2017 echoes the same sentiment.

23. Nearly 20% of the small business owners who applied for credit were turned down.

(Source: SBA Office of Advocacy)

This is according to a business survey conducted by the Kauffman Foundation. In contrast, the Census Bureau found that only 1% of businesses could not expand due to credit denial.

24. As far as small business starting capital goes, women are 50% less likely than men to get approved for a business loan.

(Source: SBA Office of Advocacy)

Data finds women are more apt to start a business without any financing, and this factoid is likely one of the reasons why.

25. 22% of small business owners name their personal savings as the top financial resource for small business expansion.

(Source: SBA Office of Advocacy)

Meanwhile, the small business lending statistics demonstrate that 8% relied on either their credit card or a bank loan. On the other hand, a huge amount of small businesses didn’t expand at all (57%), according to a US Census Bureau survey from 2012.

26. Venture capital-backed companies received $9.9 million in 2020.

(Source: Statista)

2020’s median size of venture capital deals was estimated at $9.9 million, much higher than previous years. It’s up by $1.9 million from 2019 when it was only $8 million.  

27. SBA statistics reveal that the approval percentage from big banks dropped to 8.9% in May 2020.

(Source: GlobeNewswire)

This is a significant decrease compared to the March and February approval rates (15.4% and 28.3%, respectively). Biz2Credit CEO Rohit Arora said this outcome was expected, as unemployment was extremely high. 

Startup Statistics

28. 69% of startup businesses begin at home.

(Source: Small Biz Trends)

It’s no secret that huge companies like Apple and Amazon began as garage-founded startups. As far as most startups’ employee count goes, 90% keep 1–4 employees. Interestingly, over 50% of business owners continue to operate from home even after their business has taken off and they’ve hired employees.

29. According to industry estimates, around 90% of startups fail.

(Source: Failory)

The small business failure statistics indicate that an average of 123,000 out of 137,000 new businesses fail daily. Vine, Formspring, and Grooveshark are some companies you might be familiar with that now reside in the Startup Cemetery.

30. The top reason for a startup’s failure is because there’s no market for their product or service, startup statistics indicate. 

(Source: CBI Insights)

CBI Insights evaluated 100 failed startups to determine the top 20 reasons they didn’t make it. The lack of a market was the main reason, with 42% of startups failing because of it. Running out of cash and starting with the wrong team took the second and third places.

31. In a 2018 survey of over 500 founders, small business owner statistics showed that 75% of startups offer work-from-home benefits.

(Source: First Round)

Other unique benefits include free Uber rides, on-site spa perks, and time-off for volunteer work. There’s still room for improvement, though. Two-thirds of male founders felt that startups considered parent needs, while only slightly over a third of women agreed. 

32. 90% of startups don’t offer childcare support of any kind.

(Source: First Round)

This likely plays a huge part in why 40% more female employees report feeling the negative impacts of parenthood than their male counterparts. The small business stats also show that 65% of startup firms who participated in First Round’s survey didn’t have a designated space for nursing mothers, which is legally required according to the Office on Women’s Health.

33. More than 50% of the founders surveyed believed the US would remain the center of technology after a decade.

(Source: First Round)

Small business growth statistics reveal that 39% of SMB owners feel China will be the global tech center by 2028. Startup USA’s Global Startup Cities report backs this up. It also finds Beijing and the San Francisco Bay Area to be standout startup hubs, but London is quickly catching up.

34. The United States and China house the most startups with the highest valuations.

(Source: Statista)

Apart from being a startup powerhouse, the latest e-commerce statistics show China also has the largest e-commerce market, with annual sales reaching $672 billion. In comparison, the US comes second with $340 billion. 

The e-commerce statistics for small businesses further reveal that the most active regions for startup companies outside of the US are Latin America and the Caribbean.

35. California, New York, and Massachusetts are the top three states with the largest number of venture capitalists.

(Source: CBI Insights)

The most active VC in terms of unique tech investments in California is Andreessen Horowitz. In New York, it’s Lerer Hippeau, and, in Massachusetts, it’s Accomplice. And despite the pandemic, the new businesses statistics for VCs show that their funding hit a new high of $130 billion in 2020, an increase of 14% from the year before. 

36. Globally, 37% of the startups running for 5–10 years were acquired by larger firms in 2018.

(Source: Statista)

Between 2010 and 2018, an astonishing 12,780 startups went on to be acquired. Contrary to what most people might think, acquisitions don’t simply occur because of financing challenges. Business statistics show that companies can enter new markets and access new products when they acquire a startup.

37. The e-cigarette company JULL Labs is the most well-funded tech startup in the US, with $15 billion in disclosed equity funding.

(Source: CBI Insights)

There are three US startups with funding exceeding $1 billion: JULL Labs in California with $15 billion, Epic Games in North Carolina with $3.4 billion, and Magic Leap in Florida with $3 billion. 

However, the small business statistics for 2021 now include 15 unicorn companies valued at over $1 billion, including Compass—a real estate platform in New York, valued at $6.4 billion and Toast—a restaurant management system in Massachusetts valued at $4.9 billion.

38. Ant Financial in China was the most valuable startup in 2020.

(Source: Statista)

Ant Financial, a Chinese Fintech company, is a spin-off from Alibaba’s Alipay. In 2020, it was the most valuable startup, with over $125 billion in value, making it the highest-valued unicorn worldwide.

The Growth and Survival of Small Businesses

39. How often do small businesses fail in their first year? As much as 20% of them fail during the first year. 

(Source: Fundera)

Additionally, 30% fail in the second year, 50% after five years, and 70% after 10 years of operation. This is probably due to accumulating costs and a lack of revenue and funding. 

40. Only a third of small business owners have an exit plan.

(Source: US Bank)

The top two small business statistics are as follows: 27% plan on transferring the business to a relative, while 26% plan on dissolution. While transferring a business to a family member sounds convenient, the closeness of the people involved can cloud judgment. Another good option is to try selling to another entrepreneur.

41. In California, 34,630 small businesses exited the market in 2016.

(Source: SBA Office of Advocacy)

As a result, there was a loss of 107,257 jobs, based on small business failure statistics. On a national scale, there were 872,000 jobs generated from businesses starting and 749,000 jobs lost due to firm exits in that year. To clarify, an exit is when a business goes from having employees to having none at all and stays closed for at least a year. 

42. For US small businesses, statistics nationwide indicate that 82% of failures result from poor cash flow. 

(Source: US Bank via Fundera)

There are several ways cash flow management can go awry. Mainly, though, it hinges on timing. Business-to-business transactions don’t pay immediately, and neither do customer transactions under accounts receivables. Bills and daily operational costs, on the other hand, are spent regularly.

43. Businesses in health care and social assistance have the highest chance of survival.

(Source: Fundera)

Business statistics show that 85% of firms in health care and social assistance survive their first year. By the fifth year, around 60% live on. Health care is also the field expected to see the most employment growth between 2014 and 2024, with home health care proving to be the fastest-growing niche in the industry.

44. Construction, warehousing, and transportation have the lowest rate of survival.

(Source: Fundera)

What is the survival rate for new businesses in these industries? The outlook isn’t all bad. They still have a 75% chance of making it past year one. As with the majority of small businesses, cash flow problems remain a dominant cause. Another cause, according to Construction Business Owner, is the nature of construction companies as interdependent firms.

45. Another study shows that startup failures are the highest in the information industry, with a failure rate of 63%. 

(Source: Failory)

Finance, education and health, and agriculture have the lowest rates. There’s a 42% failure rate for finance and real estate companies, while agriculture and education, and health share a 44% rate.

46. Small business statistics from 2018 revealed a grand total of 4,822 startup exits globally.

(Source: Statista)

Some of the exit deals of 2018 were valued at $219 billion. According to CrunchBase, the average successful US startup raised about $41 million and exited at $242.9 million in 2018. 

Small Business Marketing

47. Social media ad spending is projected to reach $110,628 million in 2021.

(Source: Statista)

Small businesses continue to utilize social media platforms for their advertisements. According to small business marketing statistics, the US generates the most ad spending, with a projected market volume of $44,607 in 2021.

Along with social media, they also market via the company website and email marketing, which, based on email marketing stats, has the highest ROI of $44 per dollar spent. Even so, it’s alarming to note that less than 30% check their website analytics.

48. How many small businesses have a website? The answer is 61%, according to Clutch’s 2018 Small Business Survey.

(Source: Clutch.io)

And more than 80% of these firms assert that their sites are already mobile-friendly. Today, it’s even more crucial for them to maintain it since 91% of all internet users worldwide are mobile users, according to the latest mobile marketing statistics. Those that still don’t have one plan on building one in 2018 (58% of them). Interestingly, even with a website, 80% of small businesses don’t bother with content marketing at all. 

Staying Connected Matters

49. Statistics on small businesses show that 40% of consumers value free WiFi in a small business establishment.

(Source: Cox Business)

In an increasingly connected world, internet access is a basic staple of everyday life. People expect a certain level of comfort and convenience. Speaking of convenience, another 21% said they’d appreciate the availability of point-of-sale systems that accept mobile payments. 

50. 60% of people surveyed would like to receive more emails from small businesses.

(Source: Cox Business)

Small business marketing statistics revealed that 38% of the participants would like small businesses to have more social media engagement, and another 38% prefer in-person engagement through events. For businesses these days, omnichannel marketing is a must, so an approach that accommodates outreach options is best.

51. Younger consumers prefer to interact with small businesses on Facebook.

(Source: Cox Business)

SBA statistics indicate that respondents 45 years old and over, on the other hand, preferred email exchanges. Recent data shows that only 26% of small businesses actually invest in email campaigns. A huge 61% turn their money toward social media, and Instagram is the most popular choice for marketers. According to Instagram statistics, the social network has over 2 million advertisers every month.

National Pride and Activism Sell

52. Consumer Reports’ 2015 findings revealed that 80% of US shoppers prefer American-made goods over imported ones.

(Source: Consumer Reports)

At the time, business statistics showed that over 60% were willing to pay 10% more for US-manufactured products. The American reputation for quality makes such products more desirable. However, it turns out it’s not easy trusting this claim—more and more manufacturers use it to describe items that only have American parts.

53. In a 2017 poll by Reuters, 70% of participants yet again viewed purchasing American-made goods to be important. 

(Source: Reuters)

But as far as their actual willingness to spend, the findings were quite conservative compared to two years prior. Only 21% of respondents were willing to pay the 10% premium, and 37% refused to pay more. For new businesses, statistics like these are crucial to creating a cost-effective product marketing plan.

54. In 2019, a recent report found that over 70% of US respondents in 2019 would spend more at businesses selling American-made products exclusively.

(Source: Cox Business)

What’s more, activism also seems to color consumer sentiment. 71% of consumers feel businesses should promote causes they care about. According to the same set of small business statistics, 70% of them would also spend more to support a good cause.

55. The Federal Trade Commission (FTC) is responsible for regulating the use of the “Made in America” tag.

(Source: Consumer Reports)

The many variations on the “Made in America” tag, however, can mean everything from “manufactured in China but designed in America” to a product containing parts that are only “mostly domestic in origin.”

Conclusion

Despite many US small businesses statistics telling us that small businesses flourish in the United States and worldwide, there are still a lot of risks that plague potential business owners. For startups, market—or rather, the lack of one—and cash flow problems are often an issue. Loans from big banks may be tough to get, but fortunately, there are funding alternatives available to small firms. 

With a bit of research and good planning, the small business statistics still show that entrepreneurial success is entirely within reach. And even in instances when there are financial sustainability problems, there are many ways to exit the venture. So really, there’s no reason not to follow through and give your business idea a try.