55 Insightful Small Business Statistics

Small businesses are drivers of global and domestic economies.

Small businesses provide 70% of global employment and generate 70% of output, and experts agree that they play a critical role in employing the world’s growing workforce.

In the US, small businesses provide just under half of private sector jobs. They’re also a major social force: US small businesses enjoy a more favorable public reputation than the military and public schools. They’re one of the few types of institutions with broad popularity across the partisan divide. According to the Pew Research Center, 86% of US adults believe small businesses have a positive influence on the country, significantly more than say the same of the military, religious institutions, labor unions, the public school system, and colleges and universities.

Use the following statistics to see what matters for small businesses. See how organizations like yours are positioning themselves to succeed and grow in the future. 

What is a small business? 

A small business refers to a company that meets the US Small Business Administration’s standards for total annual revenue or total number of employees. Although size standards vary by industry, most small businesses employ fewer than 500 people and bring in less than $7.5 million in annual revenue.

According to the latest data published in 2024, the US has more than 34 million small businesses and 99.9% of US businesses are classified as small.

Small business statistics 

Here’s what you need to know about small businesses—including who owns them, what they do, and how they’re dealing with contemporary business challenges. 

Ownership and demographics

1. According to a 2025 survey by Guidant Financial, members of Generation X own nearly half (49%) of all US small businesses. Baby boomers own 30%, and millennials own 21%.

2. The same survey found that 70% of small business owners hold a bachelor’s degree and that 27% of all small business owners also hold a master’s.

3. Individuals from underrepresented racial groups are the majority owners of 33.6% of all small businesses in the US, according to the most recent US Small Business Administration data.

4. The same report found women hold majority ownership of 39.4% of US firms and that men hold majority ownership of 57.7%.

5. US Census Bureau data also shows that Black entrepreneurs are the majority owners of 3.84 million firms in the US and that Black-owned businesses make up 11% of the US total.

6. According to 2022 data, Hispanic entrepreneurs are the majority owners of more than five million US small businesses, and Hispanic-owned businesses represent 14.5% of all US small firms.

7. US Census Bureau data in 2021 counted more than 1.6 million veteran-owned businesses in the US, and small businesses owned by veterans make up 5.5% of total US firms.

8. Retail is the leading industry for small businesses, with 15% of small businesses operating in the sector, followed by 13% in food and restaurants and 10% in health, beauty, and fitness services.

9. Many small business owners turned to entrepreneurship because of frustration with their previous employment: 28% of American small business owners say they started their business to be their own boss, and 22% cite dissatisfaction with corporate life. Only 13% claim pursuing a passion as their primary motivation.

Small business employment statistics

10. Although only 18% of small firms have paid employees, these small businesses employ 45.9% of all US workers.

11. According to a Pew Research Center report, 49% of small employer firms have four or fewer paid employees. Just over a quarter of small businesses have between five and 19 employees, 8% have between 20 and 99, and only 1% employ between 100 and 499 workers.

12. According to 2021 data from the Small Business Administration, women own 21.6% of all US employer firms. Individuals from racial minority groups own 20.9%, and veterans own 5.2%.

13. According to the most recent data from the US Census Bureau, the 134,000 Black-owned employer businesses in the US employ nearly 1.3 million people and represent an annual payroll of $40.5 billion.

14. A survey from the National Federation for Independent Business found that 56% of small businesses were hiring or attempting to hire employees as of April 2025. The same survey found that the vast majority (85%) of hiring businesses experienced difficulty attracting qualified applicants.

15. Business expansion and new business openings generated nearly 16 million total new jobs between March 2022 and March 2023, a net increase of 3.3 million jobs after accounting for business closures. Small businesses were responsible for 2.2 million net new jobs, or 80% of the total. 

16. Small firms created 61.1% of net new private sector jobs between 1995 and 2023.

17. A 2024 survey from Fed Small Business found 19% of employer firms reported growth during the prior year and 61% of growing firms considered hiring and retaining qualified staff as their biggest challenge.

New business statistics

18. The US Chamber of Commerce reports new business application numbers doubled in 2020. Much of the rise was attributed to the pandemic, and applications have increased ever since.

19. A 2024 report from the Center for American Progress noted a surge in entrepreneurship during the last few years, marked by increasing startup activity: Aspiring business owners filed 20. 5.2 million “likely employer” new business applications between 2021 and 2023, a 34% increase from 2017–2019 levels.

21. US entrepreneurs filed 5.2 million new business applications in 2024, a 48.6% increase from 2019.

22. The US Census Bureau’s Q1 2025 Economic Bulletin reports that the total number of new business applications increased in both the fourth quarter of 2024 and the first quarter of 2025.

23. In May 2025, the US Census Bureau reported 446,993 new business applications and 28,303 projected business formations, which is a seasonally adjusted prediction of the number of filings that will result in new businesses within the next four quarters.

Economic growth

24. In an April 2025 survey of small business owners by the National Small Business Association (NSBA), 41% of owners reported generating at least $1 million in annual revenue in the most recent year. Only 18% reported bringing in less than $100,000.

25. According to the NSBA, 59% of small business owners describe the nation’s economic health as worse today than it was six months ago.

26. Among these owners, 69% told the NSBA they expect their businesses to grow in the coming year. 

27. The US Chamber of Commerce reports that as of the first quarter of 2025, 65% of small firm owners describe their businesses as in good or very good health.

28. The 2025 Small Business Credit Survey (SBCS) found 46% of small firms with employees earned a profit in 2023. 

29. According to Federal Reserve Bank data, credit cards, loans, and lines of credit are the three most popular capital sources for small businesses less than two years old. 

30. New businesses are more likely to use the owner’s personal funds than established ones. According to the SBCS, 29% of businesses less than two years old used the owner’s personal capital as a source of business funding, and 19% of businesses more than 21 years old did the same.

Survival and failure rates

31. One in five small businesses fail within the first year. A quarter of new businesses fail before the end of their second year, and nearly half fail within the first five years.

32. Insufficient demand for a product or service causes 35% of small business failures.

The construction industry has the highest failure rate for small firms: Only 30% of these small businesses survive for five years.

33. Agriculture, forestry, hunting, and fishing has the lowest five- and 10-year failure rates of any industry: More than 65% of these small businesses succeed for at least five years.

34. Accommodation and food services has the lowest one-year failure rate: 86.4% of new businesses in this industry survive their first year.

Small businesses and new technologies

35. A 2025 survey from the Public Private Strategies Institute found 25% of small businesses already use artificial intelligence (AI) for daily operations and an additional 51% of small businesses are exploring or experimenting with AI tools.

36. The same survey found marketing is the most popular AI use case: 91% of small businesses with AI use it for marketing tasks. Increasing worker productivity came in second at 76%.

37. A preponderance of small businesses (87%) using AI say AI adoption is critical to competing in their market.

38. A quarter of small businesses struggle to customize new technologies to meet their needs.

39. Almost half of small businesses using AI say it improves productivity, and 48% say it helps them provide a better client experience.

40. Eight in 10 small business leaders using AI expect it to reconfigure their operations.

41. Almost all small businesses (95%) use at least one technology platform.

42. A quarter of small businesses see maintaining digital security as a major barrier to adopting new technologies.

Operations

43. According to the NSBA, supply chain disruptions (19%), cost of employee health benefits (14%), and cost of employee salaries (11%) are three leading operational challenges for small businesses.

44. The NSBA also found 40% of small businesses report difficulty securing financing.

45. A 2023 survey found 65% of small businesses reported carrying liability insurance, 39% property insurance, and 32% professional liability insurance.

46. According to Federal Reserve Bank data, 51% of new businesses (those less than two years old) rent a physical location for their business headquarters, and 29% use a residence.

47. As of 2025, S corporations and limited liability companies (LLCs) are the two most popular legal structures for small business owners, representing 39% and 34% of surveyed entities, respectively.

48. According to the US Chamber of Commerce, 60% of small business owners rank cybersecurity threats as a top concern.

49. More than 72% of all businesses were affected by a ransomware attack in 2023.

50. According to IBM, the average cyberattack cost a business $4.9 million in 2024.

Ecommerce small business statistics

51. Small businesses are four times more likely than big businesses to sell through physical channels only. The average small business sells on 1.9 digital platforms, and the average large business uses 2.6.

52. Among small businesses, 44% sell online only, 16% sell in-person only, and 41% sell online and in person. 

53. The top three reasons small businesses sell online are to expand customer reach, increase sales, and respond to customer preferences.

54. The four biggest challenges of selling online for small businesses are maintaining digital security, paying marketing costs, managing website development and maintenance, and handling fulfillment. 

55. Of small businesses that sell to online shoppers, 85% use at least one ecommerce platform, with Shopify being the world’s leading ecommerce platform. In the US, Shopify has a market share of around 30%.