121 Updated Small Business Statistics in 2023

Annually, approximately 4.4 million small businesses are established in the United States according to statistics from the Commerce Institute.

Millions of individuals yearn to open their own business – an outstanding way to achieve your goals, make an impact – at large, and to create more time, financial and geographical freedom in your life. (success).

• Nevertheless, owning a small business is not just a breeze.
• It calls for hard work, dedication and determination.

To that end, the following small business facts, stats, and trends are essential knowledge for any business looking to remain ahead of the game.

Whether you are currently running a small or freelance operation, or want to start one soon, or just want to learn more about the industry of entrepreneurship – this list of 121 small business statistics may be exactly what you need.

Uncover how a successful small enterprise works, gain insight into the effects of macroeconomic trends on your company’s performance and progress, understand what motivates other entrepreneurs and explore much more!

Key Business Statistics: Editor’s choice

• According to the Small Business Administration the United States has more than 30 million small businesses.
• American small businesses are responsible for the creation of 1.5 million new jobs annually, representing an impressive 64% of all job in the US.
• Unfortunately, over 50% of small businesses fail within the first 12 months.
• More than 95% of small startups fail within the first five years.
• After five years, 95% of small businesses fail.
• As you start your business, one of the most difficult challenges is to find reliable and high caliber employees.

Small Business & Social Media Stats

86% of small businesses use Facebook for advertising as their leading social media platform.

Small businesses with fewer than 10,000 Facebook followers that publish 60-plus times per month get 60% fewer clicks per post than businesses that post five times or less per month.

73% of small businesses invest in social media marketing.

1. According to the 2016 Global Small Business Survey, 64 % of small businesses use social media in their marketing campaigns.
2. When it comes to the effectiveness of their social media marketing efforts, 73% of marketers felt they had been somewhat or very successful.
3. In 2019, 63% of small companies increased their social media investments, emphasizing mobile devices.
4. According to an Instagram survey, over 60% of consumers use Instagram to discover new items.
5. If a company has fewer than 10,000 Facebook followers and posts 60+ times per month, it will receive 60% fewer clicks on each post than one with more than 10,000 followers.
6. According to a recent survey, 72 % of small businesses rely on Facebook as their primary social media platform for marketing.

Small Business & Marketing Stats

7. 90 million small business owners use Facebook to advertise their goods, services, or brand.
8. According to a recent Forrester Consulting study, only 16% of consumers who go online are likely to return if they have a negative experience.
9. A blog on the company’s website will increase lead economic activity by 126 % for a small business.
10. When it comes to marketing investments, 80 % of small businesses have yet to grasp the value of content marketing.
11. Paid advertisements account for 75% of small company advertising, including long-term social media marketing efforts and boosted posts.

Consumer Preference for Small Business Statistics

12. In 2020, 46% of consumers said they were more likely to shop at a small business.
13. 53% of people say shopping at small businesses gives back to their communities and gives them more purpose in their shopping habits.
14. 48% of people shop SMEs for higher-quality items and 45% for personalized service.
15. 91% of the time, consumers will choose small businesses when convenient, and 74% look for ways to support small businesses even if it’s not convenient.
16. Consumers (77%) are willing to pay more if they receive excellent customer service from small businesses.

Small Business Financial Stats

86. In 2020, a credit expansion rate of 14% was detected.

87. The average small business in the United States has a lifespan of fewer than two years. Cash is used by 39% of new business owners rather than alternative lenders when they start their businesses.

88. The most serious difficulty for a small company owner is cash flow.

90. In total, the average loan size is $107,000.

91. At the end of 2020, $9 billion were handed out in loans to small and medium-sized enterprises (SMEs), which reached $750 billion.

Small Business Revenue Statistics

92. According to Small Business Trends, 36.6% of small company owners cite cash flow as their most pressing issue.

93. According to experts, small businesses’ typical effective tax rate is 19.8%.

94. In 2017, small businesses represented 97% of importers and 98% of exporters.

95. According to a poll done by Guidant Financial and Lending Club, 78 % of small business owners regard their firm as successful.

96. Between 1998 and 2014, the share of GDP contributed by small companies in the United States fell from 48% to 43.5%.

Small Business Lending Statistics

97. Even if they have a good credit score, 56% of small business owners use their cash or seek assistance from family and friends to get their company off the ground.

98. Profits/assets, bank loans, credit cards, and home equity are the primary funding sources for growth.

99. The default rates for small businesses are at an all-time low, with less than 2% being the most common.

100. A small firm frequently takes out a small business loan to finance fixed assets or equipment.

101. Only 0.7 % of new firms in the United States that seek venture capital funding are successful when they finish business applications.

Small Business Income Statistics

56. The average revenue of a small firm without employees is $46,978 per year.

57. Small company owners earn an average of $71,813 per year.

58. The median annual income of small company owners is $100,000 or less.

59. Women’s small business owners earned $130,000 on average in 2007, versus $570,000 for male small company owners. This is more than four times as much.

60. In 2016, the number of small firms with no paid employees earning between $1 million and $2.49 million in income rose by 1.6 %.

Small Business Growth and Survival Stats

1. Having two founders, one business developer, and a technical specialist in your small firm increases the probability of success more than if you were to operate solo.
2. If you aspire to launch a small business, your likelihood of succeeding is significantly higher if you have had prior experience with failure.
3. Instead of selling a product, you’re selling a service, making your company less likely to fail.
4. A company with a premium on technological innovation is more likely to thrive.
5. According to the National Small Business Association (NSBA), Small business owners are increasingly more optimistic.

Small Business Failure Stats

117. Poor money management can be deadly for small firms, with 82% succumbing to cash flow difficulties.

118. Every month, around 543,000 new businesses are founded.

119. The failure rate for new businesses is 20% in the first year.

120. After two years, the failure rate drops to one-third and is 50% after five years.

121. The second most common cause of a small business’s failure is its lack of market for its services or products.

General Small Business Statistics

Small businesses are the lifeblood of the American and western economies, providing a majority of all employment opportunities in private industry.

Not surprisingly, the most popular form of small business is a sole proprietorship. In fact, 80% of all small businesses operate under this model with only one person responsible for its success. Following close behind are partnerships, corporations and limited liability companies (LLCs).

For many small companies, service-oriented work is the norm; this includes healthcare services, legal consultations, and home maintenance:

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Small Business Owner Demographic Stats

34. Women-owned and minority-owned businesses trail significantly behind those owned by white males.

35. Women-owned firms have increased by more than 114% over the last two decades.

36. During those two decades, the revenue share of female-owned firms has declined by 0.02%.

37. Many small companies do not have a college education.

38. Minority-owned firms are less likely to seek outside financing.

Women-Owned Businesses Stats

61. According to a survey conducted by the 2021 Small Business Trends Alliance (SBTA), 77 % of female business owners anticipate their firms to survive after the COVID-19 epidemic.

62. In a survey conducted by the Institute for Women’s Entrepreneurship and Smart Start, 54 % of black women-owned firms were entrepreneurs. One of the most significant numbers of women-owned businesses among any race group is 56%.

63. According to the Small Business & Entrepreneurship Training and Assistance Act of 2018 (SBTA), the top issues that female entrepreneurs face that aren’t COVID-related are advertising and marketing, cash flow/lack of capital, retention of employees/recruiting, offering/managing benefits, administrative tasks and tax compliance.

64. Female-owned firms anticipate that financing will be obtained in the following ways: 43 % by cash, 15% by ROBS (rescue operations business loan), 13% from family and friends, 7% via an SBA loan, 7% via a line of credit, 5% through an unsecured loan, 3% using equipment leasing,

Minority-Owned Businesses Stats

65. According to estimates, there may be as many as 8 million small firms in the United States with minority owners.

66. Hispanics own 41.25 % of the monetary assets, 32.5 % are African Americans, Asians own 27.75 %, and 3.4 % are controlled by Native Americans (National Survey of Unbanked and Underbanked Households).

67. According to statistics, minority-owned firms employ 8.7 million individuals.

68. Social assistance and health care are the most significant minority-owned business sector, accounting for 37% of all minority-owned firms.

69. Compared to white-owned firms, minority-owned enterprises receive half the capital.

Small Business Employment Stats

70. Small firms create every year, 1.5 million new jobs.

71. A small company’s chance of hiring a new employee is just 64 % of all employment startups.

72. Small businesses outsource more than 37 % of the time, mainly to increase efficiency.

73. When it comes to workers, 41% of small businesses have two to five people.

74. The economy is dominated by small companies with less than 100 workers.

Small Business Technology Stats

102. According to the study, small businesses use various digital technologies to communicate with customers; 84 % employ at least one kind of digital technology.

103. Approximately 80% of businesses use at least one internet platform for advertising and digital marketing for supplier and customer interaction.

104. Three-quarters of small companies use online platforms.

105. CRM software is the top technology concern for 31% of small businesses, followed by financial applications and technological services.

106. Hardware purchases make up 30% of a small firm’s annual technology budget.

Gender Small Business Statistics

The number of women-owned businesses has been on the rise in recent years. In the United States, it is estimated that there are now more than 11 million such businesses, accounting for nearly a trillion dollars in annual revenue. While this is undoubtedly a significant achievement, it is essential to remember that women still face substantial challenges in starting and running their businesses. For example, research shows that women are less likely than men to receive venture capital funding and are more likely to experience difficulty accessing credit. Additionally, women-owned businesses are often concentrated in specific sectors, such as health care and education, which may be less profitable than others.

39. According to the National Association of Women Business Owners, it’s been estimated that 51% of all businesses in the United States are at least 51 % owned, controlled, and operated by at least one woman.

40. Almost 9 million individuals work for them, generating $1.7 trillion in economic output.

41. Over the last two decades, women-owned firms have risen by nearly 114%.

42. In the United States, there are 9.3 million women-owned firms, accounting for 39 % of all US employer companies.

43. Only 8% of all employees work for women-owned companies, but they account for 4.2 % of total business income.

Race Small Business Statistics

44. According to a 2018 US census, just 5% of Black people were self-employed.

45. Minorities are far less likely to attract outside investment. Therefore they must rely on family and personal savings.

46. The personal credit card use rate for company financing among black Americans is 16.6%.

47. The following races make up the US-born labor force: white small company owners 3.8 %, Asians 2.5 %, Hispanics 1.6 %, and Black Americans 1.1 %

Age Small Business Statistics

48. The majority of the creators of new firms are in their 40s.

49. Although the average age of SMB entrepreneurs is around 37, startup SMB owners are more likely to succeed between the ages of 30 and 50.

50. The probability of startup success falls after the age of 50.

Degree in Small Business Statistics

51. Only 44% of independent business owners have obtained a bachelor’s degree or higher.

52. 31% of small company owners have obtained an associate degree or another college course but do not yet have a bachelor’s degree.

53. 20% of the respondents had a GED (General Educational Development) certificate or were high school graduates.

54. According to the Ernst & Young’s Small and Medium-Sized Business Survey, 24.7% of small business owners had not completed high school education.

55. According to research, a successful entrepreneur is typically male, white, better-educated, and comes from two-parent, high-earning families.

Small Business Industry Statistics

Food and Restaurant Sector

The food and restaurant sector is a massive part of the economy in the United States, employing millions and providing service to billions each year. This industry runs from mom-and-pop restaurants to major overseas conglomerates; it truly encapsulates our nation’s unique tapestry of businesses.

11. Small businesses, which account for 22.5% of firms in general, are prevalent in the food and beverage industry (1).

12. Since 2014, consumer spending in this sector has risen steadily. In the first year, consumption rose by 2.6 %.

13. The predicted accommodation and foodservice market value in 2025 is $14.8 billion.

14. The restaurant sector has seen a decline in total sales of -19.2% since 2019.

15. The anticipated total sales rebound in 2021 will be 10.2%.

Retail Sector

The retail sector is an integral part of the economy, accounting for a significant proportion of GDP in many countries. Retailers employ millions of people worldwide, and the industry is also an important source of tax revenue. The retail industry has undergone dramatic changes in recent years, with the rise of online shopping and the growth of mobile commerce. This has led to a decline in traditional brick-and-mortar retail outlets as consumers increasingly purchase online.

16. The retail sector is the most common industry for small businesses, with over 11% of them operating there.

17. The disease’s impact on the industry was minor, with sales declining 6% to $4.56 billion during the epidemic.

18. In 2021, the firm’s anticipated retail sales will be up by 6.6% to $4.86 billion.

19. In 2026, the retail industry is expected to be worth $5.52 billion.

Business Services

Businesses of all sizes rely on various services to function efficiently and effectively. From bookkeeping and marketing to HR and IT, many business services can help organizations streamline their operations and improve their bottom line. While some businesses opt to outsource these services, others choose to hire in-house teams. Whether to outsource or insource business services depends on a variety of factors, including cost, expertise, and availability. In any case, businesses that invest in quality business services can reap many benefits. Improved efficiency, increased productivity, and boosted profitability are just a few of the advantages of investing in quality business services.

20. Industry losses have been severe due to the COVID-19 epidemic, with sales volume dropping by 16% through 2020.

21. The business services industry, which has been struggling to recover more than any other sector, is expected to grow at +0.15% over the next year.

22. The expected corporate profit for 2021 is projected to rise by 0.15% to $1.69 billion.

23. According to a study published in the business journal The Economist, by 2025, the global computer security market will be worth about $2.41%.

Health, Beauty, and Fitness Services Sector

The health, beauty, and fitness services sector comprises a wide range of businesses that provide services to help people look and feel their best. This includes everything from hair and nail salons to fitness centers and spas. The sector is increasing as more and more people become aware of the importance of taking care of their health and appearance. In addition to traditional businesses, the industry includes a burgeoning sector of mobile apps and online services that provide convenient access to health and beauty information and products. With the global wellness market projected to reach $4.2 trillion by 2022, it is clear that the health, beauty, and fitness services sector will continue to thrive in the years to come.

24. In the health, beauty, and fitness sector, approximately 9% of firms are small businesses.

25. The healthcare industry is expected to bounce back the most after the pandemic, with a recovery rate of 16.6 %.

26. The market value of the health services industry is expected to be $4.32 trillion in 2026.

27. In 2026, the beauty services industry is expected to have a revenue of $14.8 billion.

28. In the health services sector, industry revenue is expected to reach $38 million in 2026.

Residential and Commercial Services Sector

The residential and commercial services sector is a broad category that covers a wide range of businesses, from building maintenance and janitorial services to landscaping and security. This sector also includes firms that provide personal services, such as pet care, dry cleaning, and laundry. In general, the firms in this sector focus on delivering quality services to their customers, whether homeowners or business owners.

29. 7% of small firms provide residential and commercial services.

30. Commercial and residential service franchises existed in 2019, with 67,226 locations.

31. In 2020, the number of franchises increased to 68,008.

32. The annualized establishment growth rate from 2015 to 2019 was +1.09 %.

33. The creation rate of the sector increased by 1.14 % between 2019 and 2020.

Final Thoughts

Businesses in many sectors have had an eventful decade, with the 2000s ending and the new decade beginning. For an extended period, things were turbulent, but now there is some good news! While they’ve been in development throughout this decade, we’re still unsure if they’ll make it to market.

With the appropriate data at your fingertips, you’ll be better positioned to make the most significant decisions and those most suitable for you. Understanding how it influences your company decisions and using it to one’s benefit when making plans, starting, or growing a small business is essential to interpret it correctly.