Did you know small businesses comprise 99.9% of all US firms?
61.7 million Americans are employed in small businesses.
How do small businesses fare in today’s economy?
The average cost to start a business is between $ 250K and $500K.
According to the US Bureau of Labor Statistics, about 80% of small businesses survive their first year.
Ready to join the entrepreneurial journey? Begin with these essential stats.
Top Small Business Statistics: Editor’s Pick
- 28% of small businesses do not have a website yet. [8]
- 86% of small firm owners reported that technology helped them survive the pandemic. [10]
- 74% of businesses are owned by males. [5]
- 31% of US black-led small businesses reported being closed. [2]
- The industry with the most job openings is the education and health services industry. [4]
- 77% of small business owners expect their businesses to survive. [5]
- Facebook (66%) and YouTube (42%) are the most popular social networking platforms among small businesses. [2]
- 25% of companies use AI to address labor shortages. [7]
- Small businesses created 17.3 million jobs in the last 26 years. [1]
- 24% of small businesses said they are going to increase staff in 2024. [5]
General Small Business Statistics
Small businesses comprise 99.9% of all US firms. [1]
Small businesses created 17.3 million jobs in the last 26 years. [1]
Even though 9 out of 10 employees conduct online research before buying, 28% of small businesses do not have a website yet. [8]
Small businesses are usual targets for 43% of cyber attacks. [9]
It is alarming to note that only 14% of small businesses are ready to defend against such attacks. [9]
Covid has affected all of us, and small businesses are not an exception. 21.6% of them suffered huge negative impacts of Covid. [10]
86% of small firm owners reported that technology helped them survive the pandemic. [10]
Retail and eCommerce are top small business industries. [5]
Source: Guidant Financial
Small Business Statistics By Demographics
Who is an average small business owner?
Gen X owns 47% of small business. [5]
Next in line are baby boomers with 37%. [5]
Then comes millennials, they own 16% of business in the US. [5]
74% of businesses are owned by males. [5]
Women-led small businesses reported higher proportions of business closures at 23%, versus 17% of men-led small businesses. [2].
44% of small business owners are graduates with a bachelor’s degree. [5]
US minority-led small businesses were 8% more likely to report closure than other small businesses. [2]
31% of US black-led small businesses reported being closed. [2]
Source: Guidant Financial
Small Business Success Vs Failure Statistics
According to the US Bureau of Labor Statistics, about 80% of small businesses survive their first year. [7]
Over half of all small businesses fail in the first five years. [7]
Only 30% go on to survive their 10th year in business. [7]
Here we have curated a list of failure rates in a decade.
| Years in business | Failure rate |
|---|---|
| 1 | 20% |
| 2 | 30% |
| 5 | 50% |
| 10 | 70% |
Are small business owners happy?
Source: Guidant Financial
Small Business Employment And Salary Statistics
Are small businesses generating employment?
Statistics suggests, yes!
Small businesses have added over 12.9 million jobs in the last 25 years. [4]
Small businesses led by US minorities were more likely to report increasing their number of workers (20%) than others (16%). [2]
The industry with the most job openings is the education and health services industry. [4]
The average small business owner’s salary is $69,579 in 2023. [6]
61.7 million Americans are employed in small businesses. [6]
Small Business Finance Statistics
Wondering what is the cost to start a business?
The average cost to start a business is between $ 250K and $500K. [5]
And about half of business owners use $401K to start their ventures. [5]
Only 3.7% of small business owners started their business with less than $50K. [5]
It is to be noted that 12.3% of small business owners spent more than $1MM to start the business.
Here we have reviewed the average cost to start a small business in the US.
| Cost | Percentage |
|---|---|
| Less than $50k | 3.7% |
| More than $1MM | 12.3% |
| $500k-%1MM | 16.3% |
| $250k-$500k | 27.3% |
| $175k-$250k | 14.2% |
| $50k-$175k | 26.2% |
Question: Do you expect your business to survive in today’s economy?
77% of small business owners expect their businesses to survive. [5]
5% do not expect to survive today’s economy while 18% are not sure. [5]
Source: Guidant Financial
Small Business Marketing Statistics
Social media has increased the customer base for small businesses significantly after Covid.
Facebook (66%) and YouTube (42%) are the most popular social networking platforms among small businesses. [2]
94% of brands post daily on social media platforms.[9]
79% of brands post weekly on social media. [9]
Only 6% of brands post less frequently than a month. [9]
But it is interesting to note that, 37% of social media users prefer brands that engage with their audiences directly, rather than posting a lot of content pieces. [9]
Challenges Faced By Small Business
Four in five respondents reported that they are concerned about small businesses in the US. [3]
Why?
- According to Statista, US small businesses face inflation and labor quality issues. [1]
- 53% of business owners reported that their business has experienced operational issues due to supply chain disruptions. [1]
- 5% of small businesses went through poor sales in June 2023. The percentage has increased by 1% since 2022. [1]
- Government regulations are a continuous challenge for small businesses (8%). [1]
Source: Statista
Small Business Trends And Predictions
Here we have curated a list of popular answered by founders when asked ‘What motivates you to go into businesses?’
Source: Guidant Financial
Small businesses are happily welcoming AI. 25% of companies use AI to address labor shortages. [7]
33% use technology for automating IT processes, including data management and cyber security. [7]
What are your plans for 2024?
- When asked about plans for 2024, 24% of small businesses said they are going to increase staff. [5]
- 18% are planning to invest in digital marketing.
- 17% are planning to expand or remodel in 2024.
- 10% are going to invest in traditional marketing.
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FAQs
Is it necessary for small businesses to have a website?
The absence of a website limits online visibility of businesses and restricts their ability to reach potential customers who rely on online research before making purchasing decisions. Approximately 28% of small businesses currently do not have a website.
How social media is helping small businesses?
Small businesses are actively engaging with their audience on social media platforms through personalized interactions, such as responding to comments, messages, and user-generated content. This engagement fosters stronger brand loyalty, increases customer satisfaction, and facilitates word-of-mouth marketing, ultimately leading to higher customer acquisition and retention rates.
Is AI and automation harmful to small businesses?
No, small businesses are not being harmed by AI and automation. Actually, they are using it for their benefit. Like integrating AI and automation to streamline repetitive tasks, enhance data analysis, and improve decision-making processes. They anticipate benefits such as increased productivity, reduced operational costs, and enhanced scalability, allowing them to focus on strategic initiatives and innovation.
Why do small businesses invest in digital marketing, and how do they measure success?
Small businesses invest in digital marketing to reach more customers. They track website traffic, conversions, and engagement to see if it’s working.
How have supply chain issues impacted small businesses?
Supply chain problems have caused operational issues for 53% of small businesses. They’re looking for new suppliers and using technology to manage inventory better.
Conclusion
From employment statistics to challenges and trends, the landscape of small businesses is ever-evolving. Despite facing hurdles such as cyber attacks, supply chain disruptions, and regulatory challenges, small business owners remain resilient.
The pandemic has showcased both the vulnerabilities and the adaptability of small businesses. With technology playing an increasingly vital role and entrepreneurs embracing innovations like AI, the future of small businesses holds promise.
Sources
- Statista. The most important problems for small businesses in 2024
- CNBC. US Small Businesses Closures Are Ticking Back Toward COVID Pandemic Highs
- Verizon. Annual small business survey report
- Forbes. Top small business statistics of 2024
- Guidant Financial. 2024 small business trends
- Payscale. Small business owner salary 2024
- Hostinger. AI statistics and trends
- Top Design. Online presence management tips for small businesses
- Hostinger. Small business statistics
- The Washington Post. Small Business Used To Define America’s Economy. The Pandemic Could Change That Forever.
Manisha is a digital writer providing guidance in career development and growth. She facilitates skill development and implementation of the right strategies for advancement. At Jobera, She documents content around the latest market trend analysis, insights, and career planning.