Small businesses are a crucial force in today’s economy. Making up a significant portion of the business landscape, small businesses are characterized by their modest size and independent ownership.
But their impact goes far beyond that!
One key aspect of their importance lies in their role as job creators. Small businesses are responsible for a substantial portion of employment opportunities in the United States. As they grow and thrive, they hire more employees, reducing unemployment rates and contributing to economic stability.
The best part?
There are plenty of job opportunities for individuals with various skills and interests, thanks to the diversity of small businesses across different industries.
But it doesn’t stop there. Small businesses are also innovative. Agile enterprises, they’re often the birthplace of groundbreaking ideas and technological advancements. They’re more adaptable and willing to take risks compared to larger corporations. And because of the competition among them, consumers, and the economy as a whole benefit from improved products and services!
Don’t miss these 25 small business statistics for even more reasons why you should support these organizations.
Small Business Statistics: General Overview
- There are approximately 31.7 million small businesses in the United States according to the Small Business Association.
- A NerdWallet survey found that 96% of small-business owners have business bank accounts.
- Small businesses account for 99.9% of all U.S. businesses according to Jack Henry.
- About 75% of all U.S. businesses are non-employer firms, often solo entrepreneurs and freelancers according to Forbes.
- According to Nerd.ai, 32% of small-business owners say inflation is their biggest business challenge.
Small Business Statistics: Job Creation and Employment
- Small businesses employ about 60 million people in the United States, representing about 47.1% of the private workforce according to the Small Business Association.
- Small businesses created about 1.6 million net new jobs in 2019 according to the SBA.
- Over the past two decades, small businesses created 66% of all net new jobs in the United States according to Business News Daily.
Small Business Statistics: Diversity
- New American Economy revealed that more than 21% of all U.S. business owners (as of 2019) were immigrants.
- Women-owned businesses grew at a rate of 21% from 2014 to 2019, outpacing the overall business growth rate of 9% according to the American Express State of Women-Owned Businesses Report.
- As of 2021, women of color own 50% of all women-owned businesses in the United States according to the American Express State of Women-Owned Businesses Report, 2021.
- Minority-owned businesses increased by 50% from 2007 to 2017, compared to the overall growth rate of 12% for all U.S. businesses according to the Minority Business Development Agency.
- Hispanic-owned businesses experienced a growth rate of 34% from 2007 to 2012, outpacing the national average according to the U.S. Hispanic Chamber of Commerce.
- African American-owned businesses are the fastest-growing segment of small businesses, with a growth rate of 400% in recent years according to the U.S. Census Bureau.
- According to the SBA, about 76% of SBA microloans that were given in the 2022 fiscal year went to underserved communities.
Small Business Statistics: Economic Impact
- Small businesses contribute 44% of U.S. economic activity according to the SBA.
- According to the SBEC, small businesses also generate 33.6% of the country’s export value.
- The pandemic led to the closure of about 200,000 small businesses in the United States in 2020 according to the Wall Street Journal.
- Small businesses that adopted e-commerce during the pandemic reported a 49% increase in revenue according to Statista.
- The National Federation of Independent Business Research Foundation found that 32% of business owners cite inflation as their single most important problem.
Small Business Statistics: Survival Rates
- According to Luisa Zhou, over 65% of small businesses are actually profitable.
- Approximately 80% of small businesses survive their first year according to the Bureau of Labor Statistics.
- Nearly 70% of small businesses make it past the second year according to the Bureau of Labor Statistics.
- Only about half of small businesses survive beyond the first five years according to the Small Business Administration.
- About one-third of small businesses make it to the 10-year mark or beyond according to the Small Business Association.
Small businesses are not just engines of job creation and economic resilience. They also contribute to the cultural richness of our communities. Excelling in adapting to technological shifts, fostering diversity, and shaping the entrepreneurial landscape, small businesses help drive our communities—and our world—forward.