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68 Small Business Statistics To Consider For Success

June 7, 2024

small business statistics

The term “small business” carries diverse meanings for different people. 

Some consider businesses with 250 employees or less to be small businesses. Others simply take the word “small” at its face value. However, the US Small Businesses Administration (SBA) defines ventures as “small businesses” based on specific parameters. The Office of Advocacy defines a small business as an independent business with less than 500 employees.

The statistics below aim to represent a collection of research data points reflecting the state of small businesses in 2024. 

Whether you run e-commerce stores, technology, food and beverage, or any other industry, these stats will supply sufficient logic to make your business decision right. 

Key small business statistics

These statistics represent the overall state of small businesses both in the U.S. and globally. They can help you understand why people start small businesses and how they perform over time. 

  • A small business is any venture with a revenue cap between $1 million and $40 million and an employee count between 100 and 500.
  • Small businesses comprise the majority of U.S. businesses. With 33.3 million qualifying as small, they represent 99.9% of all U.S. businesses.
  • Over 80% of small businesses are run by solo entrepreneurs.
  • Out of 33.3 million small businesses, 27.1 million have no employees. This highlights the prevalence of independent entrepreneurs in the U.S.
  • 60% of entrepreneurs start businesses to be their own boss.

90%

of all companies worldwide are small businesses, accounting for 50% of global jobs. There are 400 million small businesses globally.

Source: World Bank

  • 64% of small businesses start with $10,000 or less in initial capital.
  • In the U.S., the number of small businesses has doubled in the past 30 years, now occupying 30-50% of commercial space.
  • 93% of cyberattacks against small businesses are financially motivated.

Small business ownership statistics

Small business owners come from different socioeconomic backgrounds, political beliefs, genders, and experiences. The following statistics highlight the representation among small business owners, including minorities, women, men, veterans, millennials, and people from diverse backgrounds.

  • Women own 41% of non-employer small businesses in the U.S.
  • 17.7% of small businesses are owned by minorities.
  • 40.6% of small business owners are Republicans.
  • Over 15 million Americans work full-time for their own businesses.

19%

of small business owners work over 60 hours a week.

Source: Patriot

  • Female-owned small businesses have an average annual revenue of $263,092, compared to $469,372 for male-owned businesses. 
  • One in three small businesses is family-owned.
  • Millennials own 13% of small businesses.
  • Veterans own 6.1% of small businesses. 

Small business employment statistics

Small businesses play a key role in offering jobs to people, employing nearly half of the U.S. workforce. Take a deep dive for more detailed insights into the relation of small business with employment. 

  • Small businesses employ 61.6 million people, constituting 45.9% of the U.S. workforce.
  • Despite 80% of small businesses operating without staff, they significantly contribute to job creation.

16%

of small businesses have between 1 to 19 employees. Over 5.4 million businesses fall into this category.

Source: SBA

  • Only 647,921 businesses have 20 to 499 employees.
  • On average, small businesses with employees have 11.7 workers.
  • Small businesses have created 12.9 million jobs in the past 25 years. They contribute two-thirds of all new jobs added to the economy.
  • The home health and personal care sector is expected to grow by 22%, adding over 804,000 jobs in the next decade.
  • The leisure and hospitality sector is recovering from the impact of COVID-19, adding an average of 41,000 jobs per month in 2023.

Small business salary and wages statistics

Contrary to a common misconception, the size of a business does not necessarily correlate with the wages it pays its employees. Let’s shed some light on the average wages small businesses pay their workforce. 

  • The average salary of a small business owner stands at $69,119, just 16% above the national mean wage of $59,428.
  • Hourly earnings have increased by 4.6% over the last year, outpacing the 3.2% inflation rate.
  • Over 86% of small business owners take a yearly salary of less than $100,000.
  • Labor makes up 70% of business spending.

Success and failure statistics for small businesses

Some small businesses turn out to be profitable quickly, while some go through a downward trend, meeting failure. 

  • In 2022, 65.3% of small businesses were profitable, a significant increase from 40% in 2018.
  • 447,519 more small businesses opened than closed from March 2021 to March 2022.
  • 20% of businesses fail in the first year, 30% in the second year, and 50% by the fifth year.
  • 38% of businesses fail due to running out of capital. 
  • 42% fail due to inadequate market demand.
  • The construction industry has the highest failure rate at 25% in the first year.
  • 74.86% of small business owners report happiness with their work.
  • 9% of small businesses make over $1 million annually.
  • Small businesses generate 44% of U.S. economic activity (GDP).

80%

of small businesses are optimistic about their future, with 71% expecting revenue growth and 47% planning to hire more staff.

Source: U.S. Chamber of Commerce

  • Healthcare and social assistance businesses boast the highest survival rate at 85% for the first year.
  • 62% of small business owners consider their business "good health."
  • 82% of small businesses fail due to cash flow problems.
  • 23% of small businesses fail due to not having the right team.
  • Nevertheless, 92% of small business owners don’t regret starting their business.

Small business cost and revenue statistics 

Like any business, small businesses have several associated costs that play a role in driving revenue. Look at the financial side of small businesses through a statistical lens. 

  • Marketing accounts for 9% of a business’s revenue.
  • Inventory costs comprise 25% to 35% of a business's budget.
  • Small businesses are adapting to a 3% inflation rise by cutting costs and finding innovative ways to maintain financial stability.

41%

of small businesses rely on social media for revenue.

Source: Plann That

  • 27% of small businesses anticipated annual sales to exceed $200,000 in 2020.
  • Non-employer businesses achieve average annual sales of $46,978.
  • While 65% of entrepreneurs express concern about insufficient capital to start a business, 82% feel qualified to run one.
  • One-third of successful small businesses started with less than $5,000.
  • 56% of small business owners find digitalization too expensive.

Small business trends and statistics

Let's wrap up with some intriguing stats that offer a glimpse into the latest global trends in small businesses.

  • Small businesses using AI are 12% more likely to experience growth in their profits.
  • 92% of owners believe a website is the most effective digital marketing strategy.
  • 31% of owners see sales as their top marketing goal, with 47% running marketing independently. 
  • 50% of small businesses operate from home.
  • 76% of shoppers visit a business’s website before visiting its physical location.
  • 91% of consumers support small businesses when it’s convenient.
  • 28% of data breaches involve small businesses.
  • 65% of small businesses are likely to invest in AI.
  • 73% of Gen Z and 75% of Millennials would shop more at small businesses if they matched chain stores’ conveniences. 
  • 64% of Americans feel guilty after shopping at big chain stores.

33%

of small businesses started with less than $5,000, and 58% with less than $25,000.

Source: Mesa Community College

  • Inflation emerges as a top challenge for over 50% of small businesses.
  • 60% of small businesses have $50,000 in debt or less.
  • About 70% of small businesses use Facebook for marketing, 64% use email marketing, and 43% use paid search.
  • Nearly 50% of small business owners find their marketing efforts effective.

The game is on

Modern technology and AI innovations make it easier for businesses to operate cost-effectively, increasing their chances of becoming profitable. As these technologies improve, the ways small businesses run their operations will likely change in the foreseeable future. 

Curious about what changes would occur? Take a look at how AI is shaping future selling trends.

G2CM_FI501_Learn_Article_Images-[What_Is_a_Small_Business]_V1a
Support mom and pop shops!

Find the right e-commerce platform that allows small businesses to manage all operations related to online sales of products or services.

G2CM_FI501_Learn_Article_Images-[What_Is_a_Small_Business]_V1a
Support mom and pop shops!

Find the right e-commerce platform that allows small businesses to manage all operations related to online sales of products or services.

68 Small Business Statistics To Consider For Success Explore these small business statistics to gain exciting insights into their business activities. Learn more about their success and failure rates. https://learn.g2.com/hubfs/G2CM_FI1011_Learn_Article_Images_%5Bsmall_business_statistics%5D_V1a.png
Sagar Joshi Sagar Joshi is a former content marketing specialist at G2 in India. He is an engineer with a keen interest in data analytics and cybersecurity. He writes about topics related to them. You can find him reading books, learning a new language, or playing pool in his free time. https://learn.g2.com/hubfs/Sagar%20JoshiUpdated.jpeg https://www.linkedin.com/in/sagarjoshi9/

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