Forget everything you thought you knew about the typical small business owner, because the face of American entrepreneurship is undergoing a remarkable transformation, as revealed by the latest data showing that Hispanic ownership surged to 34.6% in 2022, women now own 38.1% of all small employer firms, and a record 6.4 million new business applications were filed just last year.
Key Takeaways
- In 2022, 34.6% of small business owners in the US were Hispanic, up from 26.3% in 2012
- Women owned 11.4 million small businesses in 2022, representing 38.1% of all small employer firms
- 10.1 million small businesses were veteran-owned in 2021, accounting for 9.3% of the total
- In 2022, small businesses generated $6.4 trillion in revenue, accounting for 43.5% of US private sector GDP
- Average annual revenue for small businesses was $463,000 in 2022
- 33% of small businesses reported profit margins above 10% in 2023
- Small businesses employed 61.7 million workers in 2022, representing 46.4% of private workforce
- Small employer firms added 1.2 million net new jobs in 2022
- 5.7 million small firms had employees averaging 10.3 workers per firm in 2022
- 50% of small businesses fail within 5 years, per 2022 SBA data
- Only 30% of small businesses survive 10 years or more as of 2023
- First-year failure rate for small businesses is 23.3% in 2022
- 44% of small businesses launched in 2023, highest in 15 years
- E-commerce small businesses grew 25% in revenue from 2021-2022
- 67% of small businesses adopted AI tools by 2023
Small business ownership in America is increasingly diverse and economically significant.
Demographics
- In 2022, 34.6% of small business owners in the US were Hispanic, up from 26.3% in 2012
- Women owned 11.4 million small businesses in 2022, representing 38.1% of all small employer firms
- 10.1 million small businesses were veteran-owned in 2021, accounting for 9.3% of the total
- Black or African American small business owners numbered 3.5 million in 2022, comprising 12.2% of owners
- Asian-owned small businesses reached 1.6 million in 2022, or 6.1% of all small firms
- The average age of small business owners in the US is 50 years old as of 2023
- 57% of small business owners have a college degree or higher in 2022
- Millennial entrepreneurs under 35 owned 19% of small businesses in 2022
- Rural areas host 25% of all small businesses despite only 19% of the population
- Immigrant-founded small businesses make up 25% of new firms in 2022
- In 2023, 6.4 million new small business applications were filed, a record high
- Native Hawaiian or Pacific Islander owners represented 0.5% of small businesses in 2022
- American Indian/Alaska Native small business owners were 1.2% in 2022
- Two or more races owners increased to 2.8% of small firms in 2022
- White non-Hispanic owners declined to 77.5% from 82.1% since 2017
- 28% of small business owners are aged 55-64 in 2023
- Gen Z owners under 25 make up 5% of new small businesses in 2022
- 62% of small owners are married as of 2022 surveys
- Urban small businesses outnumber rural by 4:1 ratio in 2022
- LGBTQ+ owned small firms grew 30% to 1.4 million in 2022
Demographics Interpretation
These statistics reveal that while the classic image of the American small business owner—a college-educated, married, 50-year-old white man—still holds significant ground, the entrepreneurial landscape is now being vigorously and wonderfully contested by a far more diverse cast of characters who are not just showing up, but are filing record numbers of applications to prove it.
Employment Impact
- Small businesses employed 61.7 million workers in 2022, representing 46.4% of private workforce
- Small employer firms added 1.2 million net new jobs in 2022
- 5.7 million small firms had employees averaging 10.3 workers per firm in 2022
- Hospitality small businesses employed 10.3 million in 2022
- 70% of small businesses planned to hire in 2023, targeting 2-5 new employees
- Construction small firms created 2.1 million jobs in 2022
- Part-time employment in small businesses rose 15% post-pandemic to 2022
- Women-owned small firms employed 9.4 million in 2022
- Veteran-owned small businesses employed 5.4 million workers in 2021
- Health care small firms employed 3.2 million in 2022
- Professional services small businesses had 12.1 million employees in 2022
- Manufacturing small firms employed 2.9 million workers in 2022
- 55% of small businesses retained all employees post-2022 recession fears
- Wholesale trade small firms employed 1.1 million in 2022
- Remote work enabled 40% small business hiring flexibility in 2023
- Minority-owned small firms employed 8.5 million in 2022
- Transportation small businesses employed 2.4 million drivers in 2022
- Average small firm wage was $1,125 weekly in 2022
- Small firms account for 99.7% of all employer firms in 2022
Employment Impact Interpretation
For all the talk of corporate giants, America's economic engine clearly prefers to run on the distinct hustle of nearly 62 million small business employees, proving that the backbone of the workforce isn't found in skyscrapers but in the countless local shops, job sites, and home offices where most people actually work.
Financial Metrics
- In 2022, small businesses generated $6.4 trillion in revenue, accounting for 43.5% of US private sector GDP
- Average annual revenue for small businesses was $463,000 in 2022
- 33% of small businesses reported profit margins above 10% in 2023
- Small firms borrowed $742 billion in loans in 2022
- 52% of small businesses used credit cards for financing in 2023, averaging $56,000 debt
- Profitability rate for small businesses stood at 78% in 2022
- Average startup costs for small businesses ranged from $3,000 to $5,000 in non-employer firms in 2023
- 82% of small business failures cite cash flow problems in 2022 surveys
- Small business loan approval rate was 54% for traditional banks in 2023
- Median net worth of small business owners was $250,000 in 2022
- Small businesses held $1.8 trillion in cash reserves in Q4 2022
- 41% of small firms saw revenue growth over 10% in 2023
- Average small business tax rate effective was 19.8% in 2022
- Fintech lending to small businesses reached $11B in 2022
- 28% of small businesses used invoice financing, averaging $100K in 2023
- Break-even time for small businesses averages 2.5 years in 2022
- Employer small firms' payroll totaled $2.3 trillion in 2022
- 65% of small businesses experienced inflation impacts on costs in 2023
- Average interest rate on small business loans was 7.5% in 2023
- Non-employer small businesses earned $1.52 trillion in 2022
Financial Metrics Interpretation
The portrait of American small business is a study in stubborn contradictions: collectively they are a $6.4 trillion behemoth, yet they often live on a financial knife's edge, where a $463,000 average revenue masks the fact that over half are financing their hustle on credit cards, proving that building an empire often starts with maxing out a very personal line of credit.
Growth Trends
- 44% of small businesses launched in 2023, highest in 15 years
- E-commerce small businesses grew 25% in revenue from 2021-2022
- 67% of small businesses adopted AI tools by 2023
- Exporting small firms grew 12% in number to 1 million in 2022
- Green/sustainable small businesses increased 15% in 2022
- Franchise small businesses expanded 4% with 800,000 jobs in 2022
- Gig economy small operations tripled since 2019 to 2023
- 81% of small businesses increased online presence in 2022-2023
- VC funding to small tech firms hit $150B in 2022
- Mobile-first small businesses grew 18% in applications 2022-2023
- 73% of small businesses invested in cybersecurity in 2023
- Food delivery small firms expanded 35% revenue 2021-2022
- 92% of small businesses use social media for marketing in 2023
- Clean energy small startups received $5B grants in 2022
- 56% of small firms plan expansion in next 12 months 2023
- SaaS small businesses saw 22% YoY growth in 2022
- 48% of new small businesses are home-based in 2023
- Cross-border e-commerce for small firms up 27% in 2022
Growth Trends Interpretation
Far from a quiet retreat into mom-and-pop nostalgia, the modern small business landscape is a dynamic, digitally-savvy proving ground where entrepreneurs are eagerly launching, AI-empowering, globally exporting, and sustainably innovating their way to growth, all while wisely guarding their digital storefronts.
Survival Rates
- 50% of small businesses fail within 5 years, per 2022 SBA data
- Only 30% of small businesses survive 10 years or more as of 2023
- First-year failure rate for small businesses is 23.3% in 2022
- Restaurants have a 30% closure rate within first year, highest among sectors in 2022
- Retail small businesses fail at 28% in year one per 2023 data
- Pandemic caused 200,000 small business closures in 2020, with 30% not reopening by 2022
- Tech startups have 63% failure rate within 4 years
- 42% of small businesses cite lack of market need as failure reason in 2022
- Average small business lifespan is 8.4 years per 2023 Bureau of Labor stats
- Home-based small businesses survive 20% longer than others in 2022 data
- Service sector small businesses have 20% first-year failure rate in 2022
- Finance/insurance small firms survive 65% at 5 years per 2023 data
- 29% of small business closures tied to competition in 2022 surveys
- Construction firms fail at 25% in year one, 2022 stats
- Online-only small businesses had 15% lower failure rate in 2022
- 70% of failed small businesses ran out of capital by year 2
- Health care small firms have 82% 5-year survival rate in 2023
- Pandemic recovery saw 60% small business survival by 2022
- Franchised small businesses survive 90% at 5 years vs 70% independents
- IT services small firms fail at 18% in first year, 2022 data
Survival Rates Interpretation
The brutal statistics of small business survival are a sobering reminder that entrepreneurial success is less a sprint to an open market and more a perilous marathon where the most common finish line is running out of road, not capital.
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