There are 31.7 million small businesses in the United States. This number accounts for over 99% of all firms operating in America and employs 48.75% of the workforce. The average annual revenue for a small business is $46,979, and more than half have less than 10 employees, unfortunately some 22% of all small businesses will fail in their first year. But the good news is that even while COVID-19 had a horrible effect on the economy, business startups grew strong by 24% during the pandemic. These are just some of the business statistics that you can find in this post!
Top Small Business Statistics:
Number Of Small Business In America & The World
How Many Small Businesses Are There In America & The United States?
There are over 31.7 million small businesses in America as of March 2021 compared to about 30.7 million a year earlier according to the SBA. On top of that, some 543,000 new businesses are started each month.
Key Statistics:
What Percentage Of American Businesses Are Small Businesses?
It may be hard to believe, but 99.9% of all businesses in America are small companies. This means that for every 100 businesses in the U.S., 99 are small, and only 1 is a large business.
Key Statistics:
How Many New Small Businesses Start Each Year In The US?
More than 600,000 new small businesses are opened annually in the U.S., and the number of companies in America continues to multiply, according to the SBA. In 2020 alone, there was a 74% increase in new business applications.
Key Statistics:
How Many Americans Started A Business During COVID-19?
One of the fastest-growing areas in the U.S. during COVID-19 was small business activity; over the last year, 3.5 million businesses were started and reached 4.4 million total- a 24% increase from 2019 to 2020.
Key Statistics:
How Many Small Businesses Are There In The World?
There are over 305 Million Small Businesses globally ran by some 472 Million entrepreneurs, and get this, a staggering 100 million companies will open each year globally. In fact, 99% of all businesses in the UK, Australia, & Europe are small or medium businesses.
Key Statistics:
Sources:
Pie Insurance | Small Biz Trends | Oberlo | Review42 | Small Biz Genius | SBA | 99 Firms | PIIE | Moya Mason |
Number Of People Employed By Small Businesses In The U.S.
How Many Americans Do Small Businesses Employ?
59.9 million Americans are employed by small businesses, and 47% are employed by small businesses with less than 100 employees, the largest share of U.S. workers.
Key Statistics:
What Is The Average Number Of Employees In A Small Business?
The average number of employees in a small business is about 10. This is the average for small companies that have at least one employee. Over 5 million businesses have up to 20 employees, and less than 650,000 companies have 20 to 499 employees.
Key Statistics:
What Percentage Of Small Businesses Have No Employees?
81% (or 25.7 million) small businesses in the U.S have no employees and 19% (or 6 million) have paid employees, with 20,139 large businesses represented in total.
Key Statistics:
How Many Employees Is Considered A Small Business?
The Small Business Administration defines a small business as one which has less than $7 million in gross sales and 500 employees. According to the SBA, these firms represent 99% of all businesses in America. The answer varies by industry, but most U.S.-based companies are considered "small" or "micro" businesses due to their size.
Key Statistics:
Acceptable Small Business Sizes By Industry
BUSINESS INDUSTRY | ACCEPTABLE SBA SIZE DEFINITION |
|---|---|
Agriculture | Maximum of $750,000 in average receipts. |
Mining | Maximum of 250 to 1,500 employees depending on subsector within mining. |
Utilities | Maximum number of employees ranges from 250 (for renewable electric power generation subsectors) to 1,000 (for electric power and natural gas distribution businesses). |
Construction | Maximum of $36.5 million in average receipts. |
Manufacturing | Maximum number of employees ranges from 500 to 1,500 (with approximately 27% of all manufacturing businesses having a maximum employee cap at 500 employees). |
Wholesale Trade | Maximum number of employees ranges from 100 to 250. |
Retail Trade | For one-third of all retail trade sub-industries, size standards are set at $7.5 million in average annual receipts. Other industries are defined by 100 to 500 employee maximums. |
Transportation and Warehousing | Maximum number of employees ranges from 500 to 1,500. Some sub-industries in transportation and warehousing are defined by a range of $7.5 million to $37.5 million in average annual receipts. |
Information | Maximum number of employees ranges from 500 to 1,500, depending on the sub-industry. The maximum average annual receipts for this industry ranges from $7.5 million to $38.5 million. |
Finance and Insurance | A maximum of 1,500 employees (for direct property and casualty insurance carriers), and a maximum in average annual receipts ranging from $32.5 million to $38.5 million. |
Real Estate, Rental, and Leasing | A maximum of $7.5 million to $32.5 million in average annual receipts. |
Professional, Scientific, and Technical Services | A maximum of $7.5 million to $20.5 million in average annual receipts, or a maximum of 1,000 to 1,500 employees. |
Health Care and Social Assistance | A maximum of $7.5 million to $38.5 million in average annual receipts. |
Approximately What Percentage Of American Workers Got Their First Job With A Small Business?
67% of workers get their first job with a small business, and they receive their initial on-the-job training in basic skills and knowledge. This means that small businesses are the largest initial employer in America.
Only 12% of American workers work for large corporations such as Walmart, Apple, or Target. In comparison, 92% work small business jobs like groceries, restaurants, hair salons, etc.
JP Morgan Chase | Wikipedia | Quizlet | SBE Council | SBA | Small Biz Trends | Pie Insurance | Fundera |
Percentage Of Jobs Created By Small Businesses In America
How Many Jobs Do Small Businesses Create In The United States?
Small companies create 1.5 million jobs annually and represent the backbone of the U.S. private sector, employing 59.9 million people and 47.3% of the entire workforce on a percentage basis while accounting for 99.9% of all business in America according to the Small Business Administration.
Key Statistics:
Small Business Employment Statistics By State, Industry, & Size
How Many Small Businesses Are There In Each State?
The average number of small businesses in each state is 644,000; this is based on how many small companies there are by region (on average). There are a lot more Small Businesses than there are larger businesses in the U.S.
Which States Have The Most Small Businesses?
California has the most small businesses with over 4.2 Million. Texas has the second-most number of small businesses in America, with around 2.6 Million. Florida is third and New York fourth among states for the number of small businesses that are home to over 2.4 Million companies each. Illinois rounds out this top five list by having about 1.2 Million small businesses.
Which States Have The Least Amount Of Small Businesses?
Wyoming comes in dead last for the number of small businesses with just over 66,000. Next are North Dakota and Alaska, with just over 76,000 small companies. DC and Vermont round out the bottom 4 and 5, both with no more than 80,000 small businesses in their states.
In Which States Do Small Businesses Employ The Most People?
Small businesses employ the most people in Montana, with small companies employing almost 65% of people in their state, followed by Wyoming with just over 63%. The state of Vermont is third on the list for small businesses that employ people, with 62% of people working for a small company.
In Which States Do Small Businesses Employ The Least Amount Of People?
Small businesses employ the least amount of people in Florida and Nevada, with small businesses employing only 41% of people in their state, followed by Tennessee with just over 42%. The state of Georgia is fourth on the list for small businesses that employ people, with 43% of people working for a small company.
Which Industries Have The Most Small Businesses?
The Other Services industry is responsible for more small businesses than any other single category and is composed of over 4.3 million firms, followed by the sectors of Professional & Technical Services, 14%. Construction covers over 13% and Retail Trade with just over three million firms or 12% of small businesses.
Which Industries Have The Least Amount Of Small Businesses?
Although all industries have many small businesses, the Utilities industry has the lowest, with just over 25,000 firms. Followed by the Mining industry with 106,000 firms. Then there is Agriculture, Forestry, and Fishing and Hunting with only 257,000 firms.
Number Of Small Businesses & Small Business Employees By State
STATE | NUMBER OF SMALL BUSINESSES | NUMBER OF SMALL BUSINESS EMPLOYEES |
|---|---|---|
Arizona | 571,495 | 1,039,228 |
Tennessee | 603,310 | 1,096,245 |
Colorado | 630,113 | 1,117,202 |
Maryland | 594,124 | 1,143,191 |
Missouri | 532,277 | 1,168,725 |
Indiana | 512,348 | 1,222,372 |
Minnesota | 520,110 | 1,254,958 |
Wisconsin | 452,594 | 1,258,929 |
Washington | 608,956 | 1,379,558 |
Massachusetts | 669,224 | 1,490,416 |
Virginia | 745,886 | 1,535,136 |
Georgia | 1,051,071 | 1,637,892 |
North Carolina | 913,398 | 1,672,050 |
New Jersey | 884,049 | 1,810,107 |
Michigan | 873,722 | 1,868,885 |
Ohio | 949,479 | 2,192,920 |
Illinois | 1,233,572 | 2,485,857 |
Pennsylvania | 1,058,033 | 2,497,524 |
Florida | 2,494,279 | 3,397,931 |
New York | 2,168,799 | 4,106,086 |
Texas | 2,679,964 | 4,706,864 |
California | 4,203,260 | 7,129,204 |
Wyoming | 66,653 | 131,499 |
Alaska | 73,354 | 141,147 |
Vermont | 77,614 | 161,080 |
Delaware | 82,121 | 187,556 |
North Dakota | 73,142 | 198,964 |
South Dakota | 86,550 | 210,534 |
Rhode Island | 101,516 | 229,974 |
Montana | 120,246 | 245,411 |
District of Columbia | 76,083 | 247,461 |
Hawaii | 132,640 | 275,115 |
West Virginia | 113,410 | 275,145 |
Maine | 147,270 | 289,156 |
New Hampshire | 134,760 | 295,895 |
Idaho | 162,905 | 315,753 |
New Mexico | 154,804 | 334,945 |
Nebraska | 176,358 | 412,291 |
Mississippi | 257,404 | 440,399 |
Nevada | 270,079 | 487,407 |
Arkansas | 249,907 | 490,497 |
Utah | 287,803 | 572,888 |
Kansas | 254,297 | 604,215 |
Iowa | 270,484 | 651,635 |
Kentucky | 351,260 | 702,054 |
Oklahoma | 350,718 | 712,582 |
Connecticut | 346,950 | 750,457 |
Alabama | 396,432 | 789,425 |
South Carolina | 418,031 | 794,711 |
Oregon | 377,860 | 852,983 |
Louisiana | 447,440 | 902,758 |
Table Data Source: U.S. Census Bureau. Figures released by the Small Business Administration Office of Advocacy, āSmall Business Profilesā. Table does not include territories such as Puerto Rico or Guam. Percent of workforce in small businesses is based on the number of people employed in the private (nongovernmental) workforce. Percentages are rounded.
Sources:
SBA | Fundera | University Of Minnesota | The Simple Dollar | Small Biz Trends |
2021 Small Business Owner (SMB Owners) Statistics By Demographics In America
How Many Small Business Owners Are There In The U.S.?
There is an estimated 31.7 million small business owners in the United States accounting for 99.9% of all businesses. This number does not account for companies with multiple owners or the amount of time it would take to become a self-employed entrepreneur.
How Many Home Based Businesses Are There in The US?
Some 50% of American small businesses are home-based, roughly 15 million. More specifically, 60.1% of all small firms without paid employees are home-based, including 23.3% of small employer firms and 0.3% of large employer firms.
How Many Minority-Owned Businesses Are in the United States?
In the United States alone, there are now over 4 million minority-owned businesses that create an annual sales volume surpassing $700 billion. Here are the percentages of small business owners by race from Kauffman Index:
RACE | SMALL BUSINESS OWNERSHIP PERCENTAGE |
|---|---|
White | 71.67% |
Black | 6.22% |
Latino | 13.99% |
Asian | 6.16% |
Other: | 1.96% |
Key Statistics:
What Is The Average Age Of Small Business Owners?
The average business owner in the U.S. is 50.3 years old, and they earn 21% more than the average American. The higher earnings are primarily because many small business owners work 60 hours or more each week, including weekends, while people with other jobs may not. The breakdown is below:
SMALL BUSINESS OWNER AGE | SMALL BUSINESS OWNERSHIP PERCENTAGE |
|---|---|
Under 35 years | 15.9% |
Age 35 to 49 | 33.2% |
Age 50 to 88 | 50.9% |
Key Statistics:
What Percentage Of Small Businesses Are Owned By Women?
32% of small businesses are owned by women while the majority of small business owners are male at 68%. This statistic has changed to an even more pronounced percentage in recent years. In 2019, Baby Boomers comprised 41% of small business entrepreneurs. However, by 2020, this number had decreased by 9% to 32%.
Key Statistics:
What Share Of The GDP Do Small Businesses Represent?
According to the Small Business Administration, small businesses are a significant contributor to the GDP of America, contributing $5.9 trillion in 2014 and 44% of economic activity in America.
What Is The Average Salary of a Business Owner?
According to PayScale, as of May 2021, the average salary of an American-based small business owner is $67,677. However, the salary of a small business owner in the United States can range from $30,000 to $130,000 per year.
How Many Veterans Own A Small Business?
There are 2.52 million veteran majority-owned businesses in the United States as of Nov 2019. 99.9% of all these businesses are classified as small businesses, according to the latest U.S. Census Bureau survey.
Sources:
NAV | Fundera | Small Biz Genius | Fortunly | 99Firms | SCORE | The Balance | SBA | Guidant Financial | Small Business | SEMrush | Pie Insurance | Payscale |
Small Business Insurance Statistics
How Many Small Businesses Have No Insurance?
To save money, many small businesses and startups refuse to get professional insurance. Recently, Next Insurance conducted a survey comprising 30,000 respondents. The results indicated that 44% of the companies had never sought any type of business insurance coverage - even when it was available!
Key Statistics:
What Are The Most Expensive Types Of Small Business Insurance Claims?
According to The Hartford, the 10 most expensive types of business insurance claims are:
Sources:
Insureon | The Hartford |
Concluding Thoughts
Taking Action
Thank you for reading this blog post about how many small businesses there are in America, the number of small businesses in America is on the rise, and more than half are expected to survive.
As a result, these enterprises will create jobs that fuel economic growth and while COVID-19 caused a ton of small businesses to fail, it also caused latent entrepreneurs to start more businesses than ever.
However, the most shocking statistic was that 40% of small businesses don't have insurance and that we saw a 24% increase in small businesses during the pandemic.
Pie Insurance | Small Biz Trends | Oberlo | Review42 | Small Biz Genius | SBA | 99 Firms | PIIE | Moya Mason | JP Morgan Chase | Wikipedia | Quizlet | SBE Council | SBA | Fundera | University Of Minnesota | NAV | Fortunly | 99Firms | SCORE | TheBalance | Guidant Financial | Smallbusiness | SEMrush | Insureon | The Simple Dollar | The Hartford |