Small businesses generally feel the economic pressures faster than large businesses.
They are generally less financially secure and more likely to go under during high inflation and economic uncertainty.
However, as the following US small business statistics show, small businesses are also surprisingly resilient.
They are, after all, the backbone of the US economy.
Whether you’re a small business, considering starting one, or simply an interested party, you’ll want to read the following statistics.
- There are over 33 million small businesses in the US
- One-third of small businesses survive for 10 years or more
- 19.9% of US small businesses are minority owned
- A third of small business operators are concerned about inflation
- 12.9 million jobs were created by small businesses between 1996 and 2021
- 80% of small businesses have no employees
- In 2022 the SBA loaned over $25 billion to small businesses
- 96% of small businesses have a separate business bank account
- 60% of small businesses haven’t experienced an issue with bank failure
- 50% of small businesses have over $50,000 in their business accounts
- In 2022 over $2 billion of bonded contracts were allocated to small businesses
- 41% of small business owners have experienced difficulty filling vacancies
- Supply chain issues have affected 85% of small business owners
- Two-thirds of small business owners expect improved revenue
- 57% of small businesses think cybersecurity is rapidly becoming a major issue
- 21.6% of small businesses suffered due to the global pandemic
- Nearly a fifth of businesses plan to change business strategies
- 90% of US consumers prefer the small business experience
- The retail industry has the most small businesses
- 63% of US small businesses are owned by people over 40
- The average small business owner earns 3% more than the US mean wage
- Only 7% of small businesses are owned by Millennials
Top US Small Business Statistics
1. There Are Over 33 Million Small Businesses In The US
According to the latest survey by the SBA, there were 33.2 million small businesses across the US at the end of 2022.
That’s a high number.
Especially when you realize that, according to the US Chamber of Commerce, 99.9% of businesses in the US are classified as small.
(Small Business Association)
2. One-Third Of Small Businesses Survive For 10 Years Or More
Starting a new business is difficult.
You’ll face numerous challenges from cash flow to brand awareness.
Of course, the competition will also be happy to put you out of business.
The latest figures show that just 34.6% of businesses survive for 10 years or longer.
On paper that means two-thirds of businesses fail within 10 years.
Of course, the survey doesn’t account for businesses which have decided to close, been taken over, or sold.
These businesses may continue to trade under a different name.
It’s worth noting that 80% of new businesses survive the first year, proving the available potential in starting a business.
3. 19.9% Of US Small Businesses Are Minority Owned
The 2021 Census Bureau survey showed that one-fifth of small businesses, that’s 19.9%, are owned by ethnic minorities.
In fact, most minority groups saw an increase in ownership.
For example, the number of Hispanic-owned small businesses grew by an impressive 8% in just 12 months.
The survey also found that 21.4% of small businesses are owned by women, and 21.7% are owned by immigrants.
4. A Third Of Small Business Operators Are Concerned About Inflation
A survey conducted late in 2023 revealed that 32% of business owners asked felt that inflation was their biggest concern/threat.
Inflation rates have been steadily increasing throughout the year and US Federal Reserve officials have indicated that interest rates, and therefore inflation, are likely to stay high for the foreseeable future.
This affects the majority of businesses and consumers as they are more reluctant to spend money and businesses find it harder to survive.
In short, the survey confirms it is one of the biggest threats facing small businesses today.
That’s businesses which have, in many cases, already weathered the pandemic.
5. 12.9 Million Jobs Were Created By Small Businesses Between 1996 And 2021
A study by the SBA highlighted how important small businesses are to the economy.
It’s not enough that 99.9% of businesses are classified as small.
The study found that 12.9 million jobs had been created in the US in the 25 years between 1996 and 2021.
While large businesses employ significantly higher numbers of people, it’s worth noting that the 12.9 million jobs created account for two-thirds of all new jobs in the period.
6. 80% Of Small Businesses Have No Employees
Small businesses can have anything from one to five hundred employees.
However, despite this potential, the majority of businesses are individual concerns.
In other words, the proprietor does everything and there are no employees.
The Census Bureau study shows that this is the case 80% of the time.
However, while just 20% of small businesses have employees, the number of people employed by small businesses totals nearly 62 million!
To put this in context, 62 million employees is 46.4% of all US employees.
These people are employed by just 6 million of the 33 million small businesses currently trading.
7. In 2022 The SBA Loaned Over $25 Billion To Small Businesses
Small businesses often need start-up finance.
This can be offered via a traditional bank, family and friends, the SBA, or even private investors.
Of course, loans are always needed to help cash flow, assist with expansion, and for a variety of other reasons.
According to SBA reports, it loaned $25.7 billion during 2022 to small businesses, a total of over 47,000 loans.
According to the SBA, 68% of the loans provided were for $350,000 or less.
Unfortunately, the survey didn’t indicate what the loans were used for.
8. 96% Of Small Businesses Have A Separate Business Bank Account
An online survey by Nerd Wallet in 2023 found that an impressive 96% of small business owners had a separate business bank account.
Having a separate account doesn’t change the liability status of the owner but it does make it easier for businesses to manage their cash flow and create accounts.
The fact that 96% of small businesses have a separate bank account reflects how seriously most business owners take their financial commitments.
Interestingly, the study found that 52% of small business owners use just one bank for their business bank accounts.
Nearly as many, 39% of businesses, use two banks for all their banking needs, lowering the risk of lost funds.
Just 10% of small businesses use three banks or more.
(Nerd Wallet Survey)
9. 60% Of Small Businesses Haven’t Experienced An Issue With Bank Failure
In the past few years, many businesses have failed, including several banks.
Perhaps the most notable are Signature Bank and Silicon Valley Bank.
Naturally, a failing bank can cause a business issue, particularly if it ties up needed capital.
This is exactly the reason roughly half of small businesses use two or more banks.
However, the survey revealed that 60% of small businesses didn’t encounter any issues due to failed banks.
Of course, that means 40% of small businesses did feel the impact.
Fortunately, thanks to the Federal Deposit Insurance Scheme, the majority of businesses didn’t lose money from bank failures.
That’s because the scheme guarantees money deposited in banks, up to a limit of $250,000.
In other words, if you have more than this in an account it should be split between two or more accounts.
(Harris Poll 2023)
10. 50% Of Small Businesses Have Over $50,000 In Their Business Accounts
As mentioned, the Federal Deposit Insurance Corporation only guarantees up to $250,000 per account.
That’s why it’s essential for businesses to share their funds across multiple accounts.
This isn’t an issue for most businesses but is something all businesses should be aware of.
The latest statistics show 50% of small businesses have $50,000 or more in their bank accounts.
The survey didn’t identify how many accounts this was spread across.
However, it did note that 14% of businesses have less than $10,000 in the bank, and 13% of businesses have between $10,000 and $25,000.
Impressively, 23% of small business owners have over $250,000 in the bank.
Again, it didn’t specify whether these funds were split across multiple accounts.
(Harris Poll 2023)
11. In 2022 Over $2 Billion Of Bonded Contracts Were Allocated To Small Businesses
The Small Business Association has a Surety Bond Guarantee program.
It’s aim is to assist small businesses when they compete for a government contract.
In other words, it helps to level the playing field for small businesses when competing with much larger organizations.
This helps the government gain access to all potential innovations.
According to reports, the Surety Bond Guarantee program awarded over $2 billion in bonded contracts to small businesses.
Further, 62% of the bonds awarded were to small business owners in underserved communities.
In keeping with this statistic and the aims of the SBA, reports show that 76% of the SBA microloans issued in 2022 also went to small businesses in underserved communities.
12. 41% Of Small Business Owners Have Experienced Difficulty Filling Vacancies
The National Federation of Independent Business conducts a monthly survey and found that inflation isn’t the only concern for small business owners.
An impressive 41% of small businesses have experienced difficulty finding someone to fill a job vacancy.
The biggest issue faced by employers, according to the survey, was under-qualified candidates.
This was the issue in 93% of cases.
13. Supply Chain Issues Have Affected 85% Of Small Business Owners
Alongside inflation and staffing issues, the survey also found that 85% of small businesses have been affected by supply chain issues.
Many of these issues have stemmed from the global pandemic, the Russian invasion of Ukraine, and the subsequent unrest in the Red Sea.
All of these incidents have made it harder for businesses to access the resources they need.
This causes supply issues, forces prices up, and generally makes it harder for small businesses to stay competitive.
14. Two-Thirds Of Small Business Owners Expect Improved Revenue
The good news is that most small business owners are optimistic about the future.
According to a 2022 survey by the Bank of America, 64% of small business owners expect their business to earn more money in 2023 and onward.
In other words, despite the economic issues facing small businesses, the general feeling is that the economy will recover and consumer spending will increase.
(Bank Of America Small Business Owner Report 2022)
15. 57% Of Small Businesses Think Cybersecurity Is Rapidly Becoming A Major Issue
Businesses, and the world in general, are becoming increasingly digitalized.
It’s now almost impossible to run a successful business without having an online presence.
Of course, increased digitalization means an ever-increasing amount of personal information online.
For cybercriminals, that’s a gold mine.
While many small b business owners believe cybercriminals generally target large businesses, an increasing number of criminals are targeting small businesses.
In general, the security is less challenging.
Small business owners are waking up to the risks and, according to the latest Bank of America report, 57% of them expect cybersecurity will have a significant impact on their business over the next 5-10 years.
These business owners are already looking at ways to prevent hackers from accessing company information and causing significant reputational damage.
Interestingly, the same survey found that 39% of small businesses are looking at automation and AI as they believe they will be increasingly important in the future.
(Bank Of America Small Business Owner Report 2022)
16. 21.6% Of Small Businesses Suffered Due To The Global Pandemic
The Census Bureau’s annual survey of 2022 showed that 21.6% of small businesses had experienced a significant issue due to the global pandemic.
These business owners recognized that the pandemic had caused them large negative effects.
It’s not surprising as the pandemic forced businesses to close or come up with alternate ways to supply their customers.
The good news is that the same survey in 2020 showed 31.8% of businesses had experienced a large negative effect.
In short, the situation is improving but still an issue for many businesses.
17. Nearly A Fifth Of Businesses Plan To Change Business Strategies
The 2023 SBA small business report highlighted how difficult it has been for businesses to stay afloat through the pandemic and subsequent economic uncertainty.
The study found that 18.5% of small business owners were looking at their current business strategies and locating ways to change their strategy within the following six months.
Being adaptable is an essential trait in business, the pandemic has simply forced more businesses to evaluate their current strategies and change tact where necessary.
According to the study, 20.2% of small business owners are creating new plans to improve the quality of the services and products they currently offer.
A further 13.9% are looking into digital technology.
The aim is either to start using this technology or expand their existing use.
In all cases, small businesses are reviewing strategies and coming up with an array of alternate options to help them to keep trading through any crisis.
18. 90% Of US Consumers Prefer The Small Business Experience
Small businesses are 99.9% of all US businesses and 44% of the economic activity in the US.
The country couldn’t survive without them.
However, it’s more than just individuals trying to make a better life for themselves.
They offer a valuable service.
According to a recent survey by Bankrate, 90% of US adults would prefer to shop with a small business instead of a large one.
The reason is surprisingly simple, small businesses offer a better shopping experience.
Interestingly, 51% of US consumers feel that small businesses offer more unique gifts, which contributes toward the experience.
A further 41% like using small businesses to improve the sense of community, even if this is online.
19. The Retail Industry Has The Most Small Businesses
At least 50% of small businesses start as home-based businesses.
That’s not surprising, costs are generally less and modern digital technology makes it possible for anyone to get started at a low cost.
It also makes it possible for small businesses to operate in almost any industry.
However, some industries are more popular than others.
According to the latest survey by Guidant Financial, the retail industry is the most popular sector for small businesses.
It’s estimated18% of retail businesses are small businesses.
Food and restaurants also have a high percentage of small businesses, as much as 12% of existing businesses.
Approximately 10% of the health, beauty, and fitness industry are small businesses.
The construction and contract services industry is 8% small businesses while the Residential and commercial services industry is 7%.
20. 63% Of US Small Businesses Are Owned By People Over 40
Anyone of any age can start a small business.
The digital age has made it easier than ever to get started.
However, even an at-home business will generally need some funds to start operating.
In addition, to succeed, most business owners have experienced several failures and learned from them.
These are the main reasons the majority of small business owners are aged over 40.
According to the latest reports, 63% of small businesses are operated by those over 40.
In contrast, 30% of businesses are run by those aged between 30-40, and just 6% are run by those aged between 20-30.
Naturally, older adults are more likely to have capital behind them which can help to ensure their business is successful.
Equally, they should have better credit ratings, making it easier to borrow funds if needed.
21. The Average Small Business Owner Earns 3% More Than The US Mean Wage
According to the Forbes small business survey 2023, the average small business owner makes $60,151 a year.
The national average mean wage in the US is $58,260, meaning small business owners are just 3% better off.
Naturally, as with any set of figures, some small business owners earn much less and others significantly more.
According to Payscale data, small business owners can earn as little as $29,000 a year or well over $100,000.
22. Only 7% Of Small Businesses Are Owned By Millennials
We’ve already looked at the age ranges of small business owners.
What may surprise you is that, according to the latest statistics, only 7% of Millennials are business owners.
The age of Millennials may play a part in this low figure as they are generally younger than 40.
But, the figure is still surprising as Millennials are generally considered to be highly entrepreneurial.
The majority of small businesses are currently owned by Baby Boomers and Generation X, perhaps this will change in the future.
One thing that the US small business statistics makes clear is that, despite various economic pressures, small businesses are still thriving.
Of course, that doesn’t mean every small business will be a success.
If you’re considering starting in business you need a solid plan, getting through the first few years can be difficult.
Having the right plan in advance will increase your chances of success, and surviving in the long term.
Naturally, choosing the right industry can help.
However, the most successful small businesses are those that follow an owner’s passion.
It makes it easier to succeed when you enjoy what you’re doing.
It’s interesting to note that inequalities in small business ownership are gradually changing.
More women and ethnic minorities own businesses today than 5-10 years ago.
This ratio looks likely to increase.
That’s likely to encourage greater diversity on the market, which is good for consumers and the economy.