Small businesses shape nearly everything from jobs to GDP, with 33.2 million firms currently in the US and 99.9% of all businesses made up of small operators. Yet the path from startup to stability is anything but straight, with survival rates dropping sharply as years pass and costs, hiring, and cybersecurity pressures rising at the same time. This post pulls together the sharpest small business industry indicators, from applications and net formation to failures and owner challenges, to show where momentum is building and where it is stalling.
Key Takeaways
- New business applications reached 5.5 million in 2022
- 4.7 million new business applications in 2023
- Employer business startups increased 8.1% in 2022
- 62% of small businesses report inflation as top challenge
- 33% cite labor quality as biggest issue in 2023
- 75% of small businesses faced rising costs in 2022
- 72% of small businesses are home-based
- 29.8% of small businesses are minority-owned
- Women own 38.1% of employer small businesses
- Small businesses account for 99.9% of all U.S. businesses as of 2023
- Small businesses represent 44% of U.S. economic activity
- In 2022, small businesses generated $19.1 trillion in sales
- Small businesses employ 47.1% of the private workforce in 2022
- Small firms created 12.9 million net new jobs from 2010-2020
- In 2023, small businesses employ 62.6 million workers
In 2023, new business activity rebounded with 5.5 million applications and a 2.1% net formation rate.
Related reading
01 · Category
Business Formation28 stats
01
New business applications reached 5.5 million in 2022
02
4.7 million new business applications in 2023
03
Employer business startups increased 8.1% in 2022
04
19.3% of businesses survive past 5 years
05
Business births were 451,689 in 2021
06
50% of small businesses fail within 5 years
07
High-propensity business applications hit 1.1 million in 2023
08
Business deaths declined 3.5% in 2022 to 806,521
09
Net business formation rate was 2.1% in 2023
10
30% survival rate after 10 years for small businesses
11
New employer firms opened at record 16.1 per 1,000 in 2021
12
Closures fell to 5.1 million nonemployer firms in 2022
13
65% of businesses started in 2018 survived to 2023
14
Startup rate for employer businesses was 3.9% in 2022
15
Pandemic spurred 25% rise in new business formations 2020-2021
16
80% of new firms are nonemployer businesses
17
Business applications down 6% in early 2023 from peak
18
Survival rate for 1-year-old businesses is 78.5%
19
High-tech startups increased 20% post-2020
20
Firm exit rate was 7.5% in 2022
21
New firms with payroll grew 10.2% in 2022
22
1 in 9 business applications become high-propensity employers
23
Survival after 2 years: 65.3% for small businesses
24
Record 5.4 million new applications in 2021
25
Net entry of 1.2 million businesses in 2022
26
20% of startups fail in first year
27
Black-owned business formations up 44% 2020-2022
28
Latino-owned startups surged 30% in pandemic era
Interpretation
Business Formation Interpretation
The entrepreneurial spirit is clearly alive and kicking, with millions answering the siren call of starting up, yet the sobering reality is that for every bustling grand opening, there's a quiet closing just around the corner, proving it's still a brutal, if hopeful, numbers game.
02 · Category
Challenges26 stats
01
62% of small businesses report inflation as top challenge
02
33% cite labor quality as biggest issue in 2023
03
75% of small businesses faced rising costs in 2022
04
Access to capital challenges 47% of owners
05
Regulatory burden costs small firms $12,000per employee
06
82% report tax complexity as issue
07
Supply chain disruptions hit 67% of small manufacturers
08
43% struggle with finding affordable health insurance
09
Cyber threats concern 58% of small businesses
10
29% cite crime/violence as operating concern
11
Energy costs rose for 61% in 2023
12
52% face payment delays from customers
13
Uncertainty index at 94 for small businesses in 2023
14
39% report lower sales due to inflation
15
Compliance costs average $34,000per small firm yearly
16
71% worry about recession impact
17
Inventory investment down 15% for small retailers
18
26% unable to fill job openings
19
Rising interest rates affect 55% of borrowers
20
48% face increased competition from big firms
21
Tech adoption lags in 37% due to cost
22
64% concerned about federal regulations
23
Capital access index worst since 2013 for small firms
24
35% report real sales declines in 2023
25
Insurance premiums up 20% for 41% of owners
26
57% optimistic despite challenges in Q2 2023
Interpretation
Challenges Interpretation
Running a small business in 2023 feels like juggling chainsaws while being quoted prices in a currency that inflates by the minute, yet against all logic, more than half of you still manage a stubborn, admirable grin.
03 · Category
Demographics26 stats
01
72% of small businesses are home-based
02
29.8% of small businesses are minority-owned
03
Women own 38.1% of employer small businesses
04
Veterans own 5.4% of small businesses with employees
05
14.6 million nonemployer firms are majority Black-owned, wait no: Black-owned businesses: 3.5 million firms
06
Hispanic-owned businesses number 4.7 million, 13% of total
07
Average age of small business owners is 50 years
08
28% of small business owners are over 55 years old
09
Asian-owned small businesses: 2.1 million, 10% share
10
42% of U.S. small businesses are owned by millennials or younger
11
Home-based businesses total 27 million
12
Women-owned firms employ 12.3 million people
13
Black women own 18% of women-owned businesses
14
56% of small businesses are sole proprietorships
15
Rural small businesses comprise 25% of total
16
Gen Z entrepreneurs own 15% of new businesses
17
Immigrant-owned firms: 25% of new businesses
18
6 million veteran-owned small businesses exist
19
LGBTQ+ owned businesses: 1.4 million, 7% of total
20
Family-owned small businesses: 70% of total
21
35% of small business owners have college degrees
22
Native American-owned firms: 400,000+
23
49% of small businesses owned by people over 50
24
Pacific Islander-owned: 150,000 businesses
25
Multi-generational ownership in 40% of family firms
26
51.1% of employer firms are white male-owned
Interpretation
Demographics Interpretation
America's entrepreneurial spirit is a gloriously chaotic national experiment in self-reliance, currently being run from kitchen tables by a surprisingly young, diverse, and increasingly female-led cohort, though it still has plenty of gray hair and garage-based hustle in the mix.
More related reading
04 · Category
Economic Impact30 stats
01
Small businesses account for 99.9% of all U.S. businesses as of 2023
02
Small businesses represent 44% of U.S. economic activity
03
In 2022, small businesses generated $19.1 trillion in sales
04
Small firms contribute 43.5% to private sector GDP
05
There are 33.2 million small businesses in the U.S.
06
Small businesses pay 45.9% of private payroll
07
Small businesses export 28.4% of total U.S. goods exports by value
08
In the U.S., small businesses make up 99.7% of exporters
09
Small businesses account for 64% of net new jobs over the past 25 years
10
Small businesses in the U.S. employ 61.7 million Americans
11
Small business economic output was $17.9 trillion in 2021
12
Small firms comprise 99.8% of firms with employees in the U.S.
13
Small businesses contribute 42.9% to U.S. GDP from firms with employees
14
In 2022, small businesses added $1.2 trillion to GDP growth
15
Small businesses represent 46% of private sector employment
16
Small business sales totaled $16 trillion in 2020
17
Small firms pay 39.2% of business income taxes
18
Small businesses drive 44% of U.S. economic activity by receipts
19
In 2023, small businesses accounted for 99.9% of U.S. firms
20
Small businesses contribute over $5 trillion in annual payroll
21
Small firms make up 97.5% of exporters by number
22
Small business GDP share is 43.5% in nonfarm private sector
23
Small businesses generated 55% of GDP in services sector
24
Small firms' economic activity reached $18.5 trillion in 2022
25
Small businesses comprise 99.9% of all employer businesses
26
Small business payroll share is 46.4% of private sector
27
Small firms contribute 30.2% to manufacturing GDP
28
In retail trade, small businesses account for 98.6% of firms
29
Small businesses' share of receipts is 41% in construction
30
Small firms drive 77.2% of net new jobs since 2005
Interpretation
Economic Impact Interpretation
The United States economy is basically a giant, world-dominating corporation that's actually just a very, very large collection of scrappy, underdog small businesses who, while constantly worrying about making payroll, somehow also manage to pay nearly half of it.
05 · Category
Employment28 stats
01
Small businesses employ 47.1% of the private workforce in 2022
02
Small firms created 12.9 million net new jobs from 2010-2020
03
In 2023, small businesses employ 62.6 million workers
04
Small businesses account for 46% of U.S. private sector jobs
05
Firms with fewer than 20 employees employ 17.3% of workers
06
Small businesses hired 1.8 million workers in Q1 2023
07
89% of small business owners reported hiring challenges in 2023
08
Small firms employ 58% of manufacturing workers
09
In leisure and hospitality, small businesses employ 62.5% of workers
10
Small businesses employ 78.8% of workers in construction
11
Net job creation by small firms was 66% from 2000-2019
12
Small businesses employ 99.8% of firms with paid employees
13
48.7% of small business employees are in firms with 1-19 workers
14
Small firms added 2.1 million jobs post-COVID recovery by 2023
15
In professional services, small businesses employ 82.3% of workforce
16
Small business job growth rate was 2.3% in 2022
17
Firms under 500 employees employ 50.7% of private workforce
18
Small businesses face 42% labor shortage rate in 2023
19
Small firms employ 53.7% in education and health services
20
Job openings at small firms rose 15% in 2022
21
76% of small businesses plan to increase employment in 2024
22
Small businesses employ 84% of retail trade workers
23
Average small business employment growth was 1.9% in 2023
24
Small firms created 1.5 million jobs in 2023
25
In wholesale trade, small businesses employ 68.4%
26
Small business unemployment claims dropped 20% in 2023
27
55% of small firm jobs are in services
28
Small firms employ 40.1% of transportation workers
Interpretation
Employment Interpretation
Despite constantly complaining they can't find help, small businesses are quietly doing the heavy lifting of employing half the country and inventing most of its new jobs.
Reference
Cite This Report
This report is designed to be cited. We maintain stable URLs and versioned verification dates. Copy the format appropriate for your publication below.
APA
Stefan Wendt. (2026, February 13). Small Business Industry Statistics. Gitnux. https://gitnux.org/small-business-industry-statistics
MLA
Stefan Wendt. "Small Business Industry Statistics." Gitnux, 13 Feb 2026, https://gitnux.org/small-business-industry-statistics.
Chicago
Stefan Wendt. 2026. "Small Business Industry Statistics." Gitnux. https://gitnux.org/small-business-industry-statistics.
Sources & references
11 datasets cited across this report · attribution is report-level