How Many Small Businesses Are There in The US in 2022?

Last Updated: September 23, 2022
Find out how many small businesses are there in the US and which year in operations has the highest dissolve rate.
How Many Small Businesses Are There in The US
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Quick Answer 🔍

How many small businesses are there in the US in 2022?

The United States is home to 32.5 million small businesses.

Nowadays, where we can buy almost everything we need with a click, many of us wonder, “how many small businesses are there in the US in 2022?”.

In the middle of the uncontrollable inflation and extended economic setbacks from Covid, nothing can sway entrepreneurial individuals from putting up their businesses. 

Thanks to the bettering pandemic situation, people are now given enough elbow room to go ahead with their business plans.

No—actually, the pandemic staged ways for many people to come up with creative ways to earn, which includes starting their own small businesses.

How Many Small Businesses are There in the US in 2022?

For those wondering how many small businesses are there in the US in 2022, the answer is right here: the United States is home to 32.5 million businesses of this size. 

According to the Nasdaq, this figure will hike by a record-breaking 17 million new additions this year as the US economy stabilizes by the tail-end of the year.

In a survey conducted involving 8,000 workers in the world’s biggest economy, 83% of them answered that the pandemic has accelerated their plans of putting up their own enterprises. 

Instead of undermining people’s entrepreneurial endeavors, the crisis presented a huge opportunity for reevaluating priorities and exploring new ways to make money.

Number of Small Businesses in the US Over the Years

As mentioned, even the pandemic could not sway Americans from their entrepreneurial resolve. Here is the history of small business growth in the United States.

  • 2017 – 29.6 million small businesses have operated during the year
  • 2018 – 30.2 million small businesses have operated during the year
  • 2019 – 30.7 million small businesses have operated during the year
  • 2020 – 31.7 million small businesses have operated during the year
  • 2021 – 32.5 million small businesses have operated during the year
  • 2022 – 32.5 million outstanding small businesses plus 17 million new enterprises are expected to form this year

Over the four years covering 2017 to 2021, the overall percentage growth covering the figures of small businesses is 9.8%.

This means that the figures remained healthy even during times of economic shocks and crises.

US Locations with the Most Number of Small Enterprises

small business

According to the US Small Business Administration, here are the ten states which hit the most number of small businesses on their borders:

  • California – the outstanding figure for small enterprises is 3.6 million 
  • Texas – the outstanding figure for small enterprises is 2.4 million
  • Florida – the outstanding figure for small enterprises is 2.1 million
  • New York – the outstanding figure for small enterprises is 2.0 million
  • Illinois – the outstanding figure for small enterprises is 1.1 million
  • Pennsylvania – the outstanding figure for small enterprises is 999,000 
  • Georgia – the outstanding figure for small enterprises is 962,000 
  • Ohio – the outstanding figure for small enterprises is 926,000
  • Michigan – the outstanding figure for small enterprises is 856,000
  • North Carolina – the outstanding figure for small enterprises is 833,000

In terms of monetary standards, the US SBA defines a small business as a firm hitting an annual revenue between $1 million to over $40 million.

In terms of size, this type of enterprise is an employer of between 100 to 1,500 employees.

Share of Small Businesses and their Years in Operation

Below is a list of operational years and how many small businesses belong in each age cluster, in percentage terms.

  • 0 to 5 years in operation – 32.5% of the total number of small businesses 
  • 6 to 10 years in operation – 18.7% of the total number of small businesses
  • 11 to 15 years in operation – 13.0% of the total number of small businesses
  • 16 to 20 years in operation – 9.7% of the total number of small businesses
  • 21 to 25 years in operation – 7.0% of the total number of small businesses
  • More than 26 years in operation – 11.9% of the total number of small businesses

Small Businesses and Their Average Life Span

Meanwhile, here is data on the average life span of new businesses from the first year to their fifth year in operation.

  • 1 year – 21.4% of new businesses close after their first year of operations
  • 2 years – 31.4% of new businesses close after their first year of operations
  • 3 years – 38.4% of new businesses close after their first year of operations
  • 4 years – 44.0% of new businesses close after their first year of operations
  • 5 years – 48.9% of new businesses close after their first year of operations

Nearly 50% of new businesses close after reaching their five-year milestone. The dissolve rate for businesses in their fourth year is also high at 44.0%.

Top Priorities of US Small Businesses 

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Credits: unsplash.com

The main goal of small businesses is not only to survive through their formative years but also to thrive and grow.

This means they need to explore opportunities that will help them achieve this goal.

90% of small business owners say they see online sales as an important source of their income stream this year.

With this, take a peek at the list of their top priorities for 2022.

  • 40% of small enterprises in the world’s biggest economy say their top priority is to increase online sales this year
  • 39% of them say they target improving their marketing results
  • 32% are into developing new products and services 
  • 31% will start investing in technology this year
  • 29% plan to hire new talents

Conclusion

Small businesses may have minuscule operations, but together they make up a significant chunk of the backbone of the US economy. 

There are a lot of challenges facing these types of enterprises.

They feel economic shocks and sudden shifts in consumer taste more painfully compared to more established big businesses that could withstand economic downfalls.

More than half of small businesses fall after five years in operation.

This dissolve rate is high, that is why they invest big in improving their capacities through increasing online presence, investing in new technology, and hiring new talents and putting them in the right roles.

We hope you enjoyed reading this article about how many small businesses are there in the US in 2022.

Sources

CensusOberloNASDAQ
IntuitGuidant FinancialPeople Keep
Jp Morgan ChaseFirst Site Guide

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Written by Jason Wise

Hi! I’m Jason. I tend to gravitate towards business and technology topics, with a deep interest in social media, privacy and crypto. I enjoy testing and reviewing products, so you’ll see a lot of that from me here on EarthWeb.