While they might fly under the radar, America's 33 million small businesses are the roaring engine of our economy, creating nearly half of all private sector jobs and contributing trillions to our national GDP.
Key Takeaways
- Small businesses make up 99.9 percent of all U.S. businesses as of 2023
- Small businesses employed 61.7 million Americans, representing 46.4 percent of private sector employment in 2022
- Small businesses generated 43.5 percent of U.S. economic activity in terms of GDP contribution in 2021
- Small businesses employed 47.1% of the private workforce in 2022, totaling 61.2 million jobs
- Firms with fewer than 20 employees account for 89.0% of employer firms but only 15.9% of employment in 2021
- Small businesses created 12.9 million net new jobs from 2013 to 2022
- 46.8% of small business owners report revenue growth in Q2 2023
- 52% of small businesses sought financing in 2022, with 47% approved
- Average small business debt stands at $650,000 per firm in 2023
- 23% of small biz survival rate drops due to financial distress yearly
- 65% of small businesses cite labor shortages as major challenge 2023
- 30% of small firms fail within 2 years per 2022 BLS data
- 73% of small businesses adopted new tech for growth in 2023
- Small businesses with e-commerce see 25% higher growth rates 2023
- 42% of small firms launched new products in past year 2023
Small businesses are the essential engine of America's economy and employment.
Demographics and Diversity
- 44% of small business owners are millennials driving innovation 2023
- Women own 42% of small businesses, up from 29% in 2012 per 2023
- 33% of small business owners are over 55 years old in 2023
- Minority-owned small businesses comprise 32% of total U.S. firms 2023
- Veterans own 5.4 million small businesses employing 5.8M in 2023
- Black-owned small businesses grew 43% to 3.5M from 2017-2022
- Hispanic entrepreneurs own 14% of small firms, 4.7M in 2023
- 28% of small business owners have college degrees 2023 survey
- Asian-owned small businesses 10.5% of total, fastest growing 2023
- Gen Z starting small businesses at 10% ownership rate 2023
- 12.3 million women-owned small businesses in U.S. 2023
- Rural small businesses 25% of total, employing 9.6M 2023
- Immigrant entrepreneurs start 25% of new small businesses yearly
- 55% of small business owners are married with children 2023
- LGBTQ+ owned small firms 1.4M, 8% growth 2023 estimate
- 37% of small biz owners under 50 in urban areas 2023
- Native American-owned small businesses 91,000 employing 28K 2023
- Baby boomers own 51% of small businesses despite retiring 2023
- 6M veteran-owned small businesses contribute $1T to economy 2023
- Pacific Islander-owned firms 47,000 in 2023 Census data
Demographics and Diversity Interpretation
America's small business landscape now looks less like a traditional boardroom and more like a vibrant, multigenerational family reunion where everyone—from millennials to boomers, and across every background—is passionately arguing over how to best drive the economy's engine.
Economic Contribution
- Small businesses make up 99.9 percent of all U.S. businesses as of 2023
- Small businesses employed 61.7 million Americans, representing 46.4 percent of private sector employment in 2022
- Small businesses generated 43.5 percent of U.S. economic activity in terms of GDP contribution in 2021
- In 2022, there were 33.2 million small businesses in the U.S., comprising nearly all firms
- Small businesses contributed $7.1 trillion to U.S. GDP in recent years
- Small firms with fewer than 500 employees represent 99.9% of U.S. firms in 2023 data
- Small businesses account for 44% of U.S. economic activity by GDP share as per 2022 estimates
- In 2021, small businesses paid out 45.9% of private sector payroll in the U.S.
- Small businesses form 99% of U.S. exporting firms, driving significant trade
- Small businesses generated 64% of net new jobs over the past 25 years through 2022
- Small businesses represent 99.7% of employers in the U.S. as of 2023
- In 2022, small businesses contributed 43.5% to U.S. GDP, equating to trillions in value
- Small firms account for 97.5% of exporters by number in 2021 data
- Small businesses hold 30.8% of banking deposits in the U.S.
- Small businesses drive 55% of U.S. GDP in certain sectors like retail
- In 2023, small businesses represented 99.9% of the 34.8 million businesses tracked by Census
- Small businesses contributed 2.4 million net new jobs in 2022 alone
- Small firms generate 16% of known U.S. exports value despite small size
- Small businesses account for 99.8% of firms with employees in 2022
- Small businesses paid 44% of U.S. private payroll in 2021
- Small businesses represent 99.9% of all U.S. firms tracked in 2023 SBA data
- Small businesses contributed $8 trillion to GDP in 2022 estimates
- Small firms are 99.6% of employer firms per 2022 Census
- Small businesses drive 50% of local economies in GDP terms
- In 2023, small businesses filed 5.5 million new applications
- Small businesses account for 46% of private employment GDP share
- Small firms contribute 43% to national GDP per Fed data
- Small businesses represent 99.9% of 33 million U.S. businesses in 2022
- Small businesses generated 44.5% of GDP in services sector 2022
- Small firms hold 32% of total business receipts in U.S.
Economic Contribution Interpretation
Despite their “small” label, these businesses are the economy’s unsung titans, collectively holding up nearly half of its weight while operating with the frenetic energy of a million hummingbirds.
Employment Statistics
- Small businesses employed 47.1% of the private workforce in 2022, totaling 61.2 million jobs
- Firms with fewer than 20 employees account for 89.0% of employer firms but only 15.9% of employment in 2021
- Small businesses created 12.9 million net new jobs from 2013 to 2022
- In March 2023, small firms added 47,000 jobs to U.S. economy per BLS
- Small businesses employ 58% of the U.S. workforce in certain states like California
- Firms with 1-19 employees represent 89.4% of employer firms in 2022
- Small businesses account for 46.4% of private sector jobs nationwide in 2023
- In 2022, small firms employed 62.6 million people
- Small businesses generated 1.8 million net new jobs in 2023 first half
- 78.8% of small businesses have fewer than 10 employees per 2022 data
- Small firms employ 41% of high-tech workers in U.S.
- In 2021, small businesses added 3.1 million jobs post-pandemic recovery
- Small employer firms (under 500) employ 46.5% of workforce in 2023 Q1
- Firms with 20-99 employees account for 9.9% of employment in small biz
- Small businesses in construction employ 2.3 million in 2022
- 99.7% of U.S. employer businesses are small, employing 47% workforce
- Small firms created 63% of net new jobs 1993-2022 cumulatively
- In retail trade, small businesses employ 55% of sector jobs in 2022
- Small businesses employ 50.9% of women-owned firm workers
- Manufacturing small firms employ 1.8 million, 38% of sector
- Small businesses in healthcare employ 3.2 million in 2023
- 85% of small businesses have under 10 employees per BLS 2022
- Small firms account for 45.3% of private nonfarm employment 2022
- In professional services, small biz employs 52% of workers
- Small businesses added 2.7 million jobs in 2021 recovery
- 46% of U.S. private workforce in small firms per 2023 SBA
Employment Statistics Interpretation
While small businesses are the overwhelming majority of employers, their collective might is like a plucky, distributed army—accounting for nearly half of the private workforce, yet paradoxically dominated by tiny shops where the boss probably also makes the coffee, reminding us that economic giants often walk on very small feet.
Financial Health
- 46.8% of small business owners report revenue growth in Q2 2023
- 52% of small businesses sought financing in 2022, with 47% approved
- Average small business debt stands at $650,000 per firm in 2023
- 37% of small businesses cite cash flow as top financial challenge in 2023
- Small business loan approval rate at big banks was 25% in 2022 H2
- 82% of small businesses use business credit cards, averaging $45,000 limits
- Median small business revenue was $195,000 in 2022 per Census
- 41% of small firms report declining revenues in 2023 survey
- Small businesses have average profit margins of 7-10% in 2023 data
- 56% of small biz owners have emergency funds for 3 months expenses
- Small business failure rate first year is 21.5% per 2022 BLS data
- Average small business loan size $650,000 with 6.8% interest 2023
- 64% of small firms increased prices due to inflation in 2023
- Small businesses hold $1.2 trillion in credit card debt collectively 2023
- 28% of small biz loan applications denied at small banks 2022
- Median small firm expenses $150,000 annually in 2022
- 45% of small businesses report improved financial condition 2023 Q1
- Small biz owners average personal net worth $1.2 million 2023
- 33% of small firms use invoice financing, averaging 20% fees
- Revenue growth for 49% of small businesses expected 10%+ in 2024
- 62% of small biz have under $500k annual revenue 2023
- Small businesses saw 15% cost increase in 2023 per NFIB index
- 71% of small firms profitable in 2022 post-COVID
- Average small biz savings account balance $42,000 in 2023
- 39% of small businesses maxed credit lines in 2023 inflation
- Small firm bankruptcy rate 0.5% in 2022 per court data
- 55% of small biz plan capital investments despite high rates 2023
- Average small business tax rate effective 19.8% federal 2022
- 48% of small firms report cash flow positive in 2023 Q3
- 70% of small businesses face inflation as top financial issue 2023
- Small business average ROE 10.5% in profitable firms 2022
Financial Health Interpretation
Nearly half of America's small business owners report growth and a plucky two-thirds foresee more revenue next year, yet they're caught in a relentless squeeze of inflation, razor-thin margins, and a banking system where chasing a loan often feels like running on a credit card-powered treadmill just to stay afloat.
Innovation and Growth
- 73% of small businesses adopted new tech for growth in 2023
- Small businesses with e-commerce see 25% higher growth rates 2023
- 42% of small firms launched new products in past year 2023
- AI adoption in 35% of small businesses boosted efficiency 15% 2023
- Small businesses investing in green tech grew 18% faster 2022-2023
- 68% of growing small firms use cloud computing 2023
- Exporting small businesses grow 2x faster than non-exporters 2023
- 29% revenue growth average for small firms digitizing 2023
- R&D spending by small firms up 12% to $50B in 2022
- 55% of small businesses expanded online presence 2023
- Franchised small businesses grow 15% annually vs 5% independents
- 47% of small firms using CRM saw 20% sales increase 2023
- Small businesses in tech hubs grow 22% YoY 2023
- 61% plan hiring due to expansion optimism 2024
- Mobile app usage drives 30% growth for small retailers 2023
- 39% of small manufacturers adopted automation 2023
- Social media marketing yields 25% ROI for small biz 2023
- 52% of small firms entering new markets grew revenues 18%
- Patent filings by small entities up 8% to 7,500 in 2022
- 66% of high-growth small biz use data analytics 2023
- Small businesses with mentorship grow 3.5x faster 2023 SBA
- E-commerce small sellers saw 27% sales growth 2023
- 45% adopted sustainable practices for market edge 2023
- VC funding to small tech firms $120B in 2023
- 71% of small businesses optimistic about future growth 2024
- Digital payment adoption up 40% correlating to 15% growth
- 34% of small firms innovated processes post-pandemic 2023
- Small businesses with strong online reviews grow 12% faster
- 58% plan international expansion using digital tools 2023
- High-growth small firms (20%+ YoY) are 10% of total but 40% jobs
Innovation and Growth Interpretation
The data screams that small businesses are not merely surviving but aggressively thriving by embracing a potent cocktail of innovation—from e-commerce and AI to green tech and global ambition—proving that the most successful entrepreneurs are those betting on the future while deftly navigating the present.
Operational Challenges
- 23% of small biz survival rate drops due to financial distress yearly
- 65% of small businesses cite labor shortages as major challenge 2023
- 30% of small firms fail within 2 years per 2022 BLS data
- Regulatory burden costs small businesses $12,000 per employee annually
- 82% of small biz owners report inflation impacting operations 2023
- 50% of small businesses struggle with finding skilled workers 2023
- Only 50% of small businesses survive 5 years or longer per SBA
- 29% failure rate for small firms in first 2 years 2023 update
- Supply chain disruptions affect 60% of small manufacturers 2023
- 44% of small businesses report increased operating costs 2023
- Cyber threats worry 43% of small biz owners per 2023 survey
- 70% of small firms face hiring difficulties due to wage competition
- 25% of small restaurants close within first year operations
- Compliance costs average 4% of revenue for small businesses
- 55% of small businesses delayed expansion due to uncertainty 2023
- Energy costs rose 20% impacting 67% of small manufacturers 2023
- 38% of small firms report payment delays from customers 2023
- Only 33% of small businesses have succession plans operational
- 62% cite government regulations as top operational burden 2023 NFIB
- Tech adoption lags in 48% of small businesses due to cost 2023
- 51% of small firms face increased insurance premiums 2023
- Inventory shortages affect 49% of small retailers 2023
- 27% of small businesses closed temporarily in 2022 due to challenges
- Worker retention issues plague 59% of small service firms 2023
- 35% report transportation/logistics as operational hurdle 2023
- Marketing budgets insufficient for 42% of small businesses 2023
- 66% of small biz struggle with digital transformation 2023
- Health/safety compliance challenges 53% post-COVID 2023
- 40% face vendor reliability issues in supply chain 2023
- 57% of small businesses plan price hikes due to costs 2023
- 31% of small firms report declining customer demand 2023
Operational Challenges Interpretation
Running a small business in 2023 feels less like a heroic entrepreneurial journey and more like a high-stakes, real-time strategy game where you're perpetually one dice roll away from bankruptcy, perpetually juggling a circus act of soaring costs, vanishing workers, and red tape while the entire audience watches to see if you'll be part of the 50% that make it to an anniversary cake in five years.
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