All What You Need to Know About Small Business Statistics

Presented by      By John Wolf
New small businesses are opened every day, about 500,000 every month. They are open in every industry you can imagine. Some are online eCommerce like this same website, There are break-and-mortar small stores that sell anything you can that you may need.
Naturally, competition is high. Many small businesses sell or give the same services. One can see how many barbershops are in the same street or how many book stores can be found in a small area of the town. The dream of being your boss and doing what you like more in the way you believe its the best is not an easy task.
If you are already riding on this wild mustang or think about starting a new small business, you better start looking for the stats on small businesses. Experience brings wisdom tells us the old saying. Learn what is going in this segment of an industry can help you make things better for your small business and dream.
We hear a lot about big corporations, but the central part of the business world in the USA is small businesses. In this article, we will bring you a summarized report of the statistics on the USA’s small businesses.
We will review some questions that will try to answer possible FAQ. You will read about how long are the small businesses life. What part of the US employment is employed by the US small businesses? Why people are talking about small business as such an important part of the nation’s economy.
Below are the stats that you need to know if you are related to the small business world in one way or another. You may be an owner, employee, or supplier for small businesses.

US  Small Business Statistics for Big People

  • There are 30.2 million small businesses
  • Only 50% survive five years or more.
  • 84% of small business owners feel optimistic about the future of their business.
  • 50% of all small businesses are run from home.
  • 82% of failed business did so because of running out of cash.
  •  99.7% of the companies in the U.S.A. are small businesses


 Small Business General Stats

1) The Small Business Administration (SBA) defines a small business when it has fewer than 500 employees.


In different countries, small business is considered a small business only if it is 15 employees in Australia. In the European Union, it is 50 workers. Five hundred employees in the U.S. As a general rule, you can say any business that is below the average is small.


2) In the USA, there are 30.2 million small businesses.


The US Census Bureau, in 2017, found out that small businesses employed 47.5% of the USA workforce.

Gig Economy dilemma: what is better Sole Proprietorship or LLC

A Legally Limited Company (LLC), is it an option for gig workers?

Sole Proprietorship or LLC are different options for managing your business. It takes six days the create one and have your business organized and not mixed with your private life. Open a company is merely doing a business to work is something else.

Compassion will be from every whare, get organized, avoid working in the dark.


3) 99.7% of all businesses in the U.S.A. are small businesses


Stats show that the majority of the companies in the USA have less than 500 workers. 98.2% of firms have less than 100 employees, and the businesses that are having less than 20 workers are 89% of the whole companies in the USA.

4) Microbusinesses are 75.3% of all private-sector workers.


Fewer than nine employees are the micro-enterprise; it is the most common size of private-sector businesses in America. The micro-business has the lowest part in the USA employment. One with the employees, only 10.5%. It is to say that a critical reason for this is the fact that most of this micro-business is mend by its owners


5)  Freelancers are going to be half of this sector.


Small businesses tend to hire full-time employees even when they don’t have enough jobs to justify those employees.

Using freelancers is usually a much better solution for jobs like writing or graphic designing for a small business that has no work for a full-time writer or another kind of professional service.  Late starts or small business that needs other industries to complete the work they can not do.

There is a substantial growth of freelancers services and freelancers on online platforms. This gig workers are independent contractors that charge for the jobs they do, no salary has to be paid.  In, we have all our work done by freelancers, SEO, programming, blog writing, and customer service are all done by freelancers.

6) Near 20% of small business owners have a working week of over 60 hours.


The small business stats tell us that the majority of owners work long hours to bring their company to succeed, especially at the starting stages of a new business. You can see bosses that work 60-hour weeks. Stats indicate a whopping 89%  working weekends, and 81% work nights.

7) Home office or manging from home is found at 50% of all small businesses.


The Internet reaches today over 290 million people in America. Working from home became easy for almost everyone.  Working from your home is a solution for those who cannot afford to have an office or like to stay home working in front of a screen.


A home-based business can go well if it is an online service, or if it is one of those homemade foods that people make at home and delivered by Uber Eat or another delivery service.

Sating home and working will need online advertising, using social media, or having a website that promotes the business.

8) The USA small businesses are employing  59 million people


US economy historical statistics teach us that small businesses have always been the backbone of the American dream and culture.

The small businesses contribute to the local economy by its stability, jobs, and financial growth, offering more diverse products or the unique services that were invented trough this history and keep developing and renovating these days.

The American tax system enjoyed a lot the contribution of the small business, and more when some of the small companies became big corporations.


 Stats About Small Business Growth and Financing

9) There are 84% of small business owners that express that they’re optimistic about the future of their companies.


Despite the sheer number of other small businesses and the heavy competition they face, most owners feel very optimistic about their future. Small business owners expect growth and an excellent company soon, and investing hard work and hard money in the business is something on their plans.


10) Health care and social assistance Businesses  are projection growth of 21%


According to the surveys made by the  Bureau of Labor Statistics on small business failure rates, the social assistance industries and healthcare are the stablest for start-ups. 85% of businesses survive the first year.

11) Technology, health, and energy are the businesses that can make products on a fast track.


The demand for services like Tech, health, and energy is high. They are not the most prominent industries, but there is a lot to do in these industries. If you think about this business, you will have a lot of orders or contracts.

12) $10,000 in the capital is what 64% of small business owners begin its start-ups.


Stats show that the average investment in capital needed to start a company is going around $10,000. For a home managed business, it can be more than enough. Especially if you do not have to hire a workforce. If you are the only person that work on a PC, it is done when you have your desk and a few more tools.

13) Microbusinesses can start with just $3,000 in the capital.


Some ways to start a business with only $3,000 are selling services like Dog Walking or Makeup at home service.

14) Close to 25% of the small businesses start with no financing at all


Some people start a business with no money, and it can be baking at home for neighbors that got the plate of the people and became into a gran demand that built a bakery.

15) The average of a  small business loan is $633,000.


The standard is tricky, and it does not mean that you will have a loan as big as the average loan. Investments depend on personal credit and the collaterals you can present.


16) The SBA loan average was $107,000 in 2017.


Small Business Administration (SBA) guarantees the loans that are issued by banks. You can see if you are qualified and get a one-time life loan to start or grow your business.

Statistics About Small Business Revenue

17) 86.3% of small business owners make an annual income of less than $100,000.


Owners of small businesses do not make more money than the CEO of big companies. Rarely cross the $100,000 a year.  30.7% is not earning a salary at all. It may be that they have other sources of income so they can let the business grow better using the money to make the company gain financial strength.

18) No more than 40% of the small companies are showing profits.


Of all the small companies, only 40% are starting to become profitable.  30% are beginning to lose money, and the rest 30% is no more than breaking even.

19) The stats for 2018 are telling us that only 9% of small businesses crossed the level of $1 million income.

(Business Know-How)

$1 million salaries are at the top of small businesses, and about 16% are at the bottom of less than $10,000. Stats are exciting, but studying the information requires you to know more about the reasons for the levels of income and the real character of the businesses. No one can promise you to make a million or tell you that you will not make more than $10,000.

20) A better future is a small business with two founders; it will raise 30% more money on average.

(Serious Startups)

“Two are better than one” tel us the Bibel. A team of two can cover more jobs, see more information, and be much more careful when making decisions. Two people on the same project will convince an investor to put his money on their idea. Two heads will be more conservative on the way they take for their business. It is less likely that they will jump into a risky adventure.

The Statistics of Failures and the Biggest Challenges for a Small Business

21) 50% of Small businesses live for at least five years.


The failure rate of small companies is not that bad as it is believed. Two-thirds survive the first two years while one third get the tenth year in business. A consistent business plan will keep you in the game for a long time, and open eyes on changes will push you even for a much longer time.


22) On average, 1/12 of businesses will be closed every year.


The average shut down of small businesses is less than 10% or 8% per year. As the small businesses mostly depend on one owner, it may be that the reason for this rate of closing as to do with more personal reasons than just how much money the business makes. Things like sickness or divorce can cause a failure or just closing the transaction.

Common pitfalls can be avoided by proper planning, hard-working, and open-minded action. Stating and keeping in small action business is a hard but possible uphill mission


23) Business is about numbers, said by businessmen. 82% of companies fail because of a shortage of money or inconsistent or insufficient cash flow.


The primary reason for new businesses fail is cash flow or financial planning. What can happen to the small business is a fluctuation in the income and drying the cash when income is low may bring to bankruptcy. For example, if you sell ice cream, you may have small sells in the winter, a gardener may have dry cash flow in the winter. Lake of discipline may cause spending the reserves for winter and having a wrong time or failing in paying your bills.  We all know the story about cricket and the ant.

24) 27% of businesses fail to receive the cash they need.


No sales, no money, no production, no sales, this is the formula of the early death of a new business. The same as the business needs raw materials or products for resale. It is a cycle that you must keep maintaining.

Money is all about business. You start a market for the money you what to make. The company will need enough money for its operation. You can not take easy the money. It is the number one topic when it is related to business manging.

Being too optimistic about your business may create a money shortage when the realty faces the investor that does not have money reserves or credit for a short term loan that will help the company to cross the bad times.


25) 42% of failed small businesses are offering products that have nothing new or useful to the public.


The main reason for the existing of a company is to fulfill the customer’s needs. If no one needs your product or service, you will have no sales, no money, and later no business.


Many people go on a product that the markets are flooded with it or similars. It is hard to take a piece of market from those who have their public for years. A new business must bring something new to the customers.

To compete in the same segment of the market, you will need money to survive for long enough time and some edge on the competition. A smile from your sales team, better service, or a better price. If you do not have an advantage, you will end failing.  T

26) The competition takes 19% of small businesses out of business.


If you do not learn what your competitors are doing is a fatal mistake. If you perform useful competition research, you are more likely to adapt and improve your services to get ahead. You should always be one step forward from your competitors.

27) 23% of the small businesses will fall because they have not a good team to run the small-business.

(Business Insider)


The startup failure rate shows us that proper management is essential to surviving your first years in business. If you don’t have the right kind of professionals to help you stay on top of your finances and help you organize other aspects of your daily workflow, you won’t be able to focus on getting new customers. But it’s not just management that you need to focus on—having competent and hard-working employees is also important.

28) 17% of the US small businesses will fail because they lack a business model.


People jump into business with no clear planing of the business model they are going to use. No surprise, they fail. If you do not know to swim, do not jump into the water.

Having an idea, knowing that something can be made and sold is not enough for making a business succeed. There are some needs to make sure you have them in hand and in quantities that will last until the business will be making its capital.

29) Poor marketing makes 14% of small businesses to fail.


The right product or service will not be sold or will have low sales without marketing. How will the public know about your great product or service if you do not promote it? If you are not a good marketer, look for one that can put you where customers can see you.

30) The construction industry has a rate of survival of only 35% after the fifth year.


Construction companies are surviving the first five years at a rate of not more than 35%. Though 75% of them survive the first year.  Construction companies would be the most complicated businesses to manage, as their incredibly high failure rate suggests. While 75% lead to survive their first year, the majority can’t seem to push past the five-year mark.

Women & Minority Populations and the Small Business

31) Women own 12.3 million USA businesses


Starting in 2007, women have a growing part in the number of businesses in the United States, whopping 58%. 9.2 million employees are working in women-owned businesses

32)  $1.8 trillion in revenue is made by women-owned businesses.


The impressive number of $1.8 trillion is not more than 4.3% of the total private sector revenue. Women are yet way back after men as business owners.

33) 46% of African American owned small businesses have their owners as there employees

(Guidant Financial)

Stats teach us that close to 50% of businesses hold by African Americans have one only employees. 42.2% have between two to five employees. Only 13% have more than six employees. There is a constant growth of businesses owned by African Americans, but many businesses are struggling to find the capital they need to hire more employees.

34) 9.1% of the small business owners of America are Veterans.

(Small Business)

Veterans are the owners of 2.5 million businesses in the U.S. 2.08 million of those are self-operated businesses with no employees.

35)  25% of new businesses in the U.S.A. Belongs to Immigrants


One of four small businesses is owned by immigrants that arrived in pursuit of the American dream. The distribution by immigrant companies is like their place in the country. New York and Califor¡nia have up to 40% of small businesses owned by immigrants. Idaho has only 5% of its small businesses owned by immigrants.


36) Immigrants are the founders of 55% of the unicorn enterprizes in the U.S.A.


Immigrants founded more than 50% of all Billion dollar companies. Uber’s Canadian founder is the most notable one.

Avant and SpaceX, founded by other immigrants, are examples of exceptional success.



Small Business Firms and the Marketing Issue

37) 47% of businesses pointed out marketing as their top strategy for growth.



Trends in the small business show us that companies are becoming more active in advertising. The Internet made it easier for a small business to use a website or Facebook to promote its products. 47% of small businesses are planning to increase their marketing efforts. 33% is looking for strategic alliances with business partners


38)  64% of small businesses already have their websites.


The Internet became our way of communicating with the public. Most of the businesses are already online, but 1/3 is yet not having a website. Today the internet is in the hands of every potential customer. The smallest business can afford to have a website or using ads on the internet.

Thanks to the lack of marketing strategy as a significant factor in small business failure, a website is the most important investment for small businesses.

39)  Business owners of 92% of the small businesses believe that owning a website contributes to their online marketing strategy.

(Iron Paper)

Most of the owners understand the importance and the need for digital marketing. It will take some time for those who have no website to open one. As it is not only to build one site, it is keeping it updated and look for an SEO job to keep it relevant it will take time to have these services easy to use by small businesses. It is happening now, even a makeup service of one woman that work from home or visiting the clients at home has an Instagram marketing account.

40) The top marketing goal of 31% of small business owners identifies driving sales as their marketing goal.


Sales are what bring revenue to the business. Small business is depending on sales as all businesses. That is the reason they make the priority of the near future purchases.

24.6% of businesses are focused on boosting customer engagement and retention. Some use the internet, creating a customer subscription valuable to their clients. The other 17.1% take brand awareness building as a better way of engaging customers. Marketing campaigns are time and money consuming jobs, but in the long run, it can pay itself.

41) 70-80% of potential buyers research what small businesses are offering before purchasing.

(Blue Corona)


The successful small businesses understand that customers these days need to research a company before they feel confident about making a purchase.

A passive website is this one you build and give the public its link on adds so they can click and see what you have to offer them and what price you have. It is easier than a website that is looking for Google ranking and traffic of buyers.

A ranking website will be useful for capturing a new buyer. It is more complicated to put your website on the first page of Google. A small business may find it hard to achieve.


42) Social media is widespread, with 61% of small businesses investing in marketing on Facebook, Instagram, or other social media.


Social media is easy to manage, no need for technical knowledge. It is accessible for the public and the small business owners or staff. It is a kind of market place where you can meet people. Instagram, Facebook, and Twitter are the places you can meet your potential buyers. You can have an account where you make contacts and inform the people about your business and put paid adds that will push your sales.


What is a small business?

Privately owned corporations that are not bigger than 500 employees, and their annual income is less than $750,000 a year.

The government needs to define what is a small business because it has some subsidies programs to help small businesses compete with big corporations.

How important is the small business sector to the whole USA  economy?

Small businesses are highly crucial to the U.S. economy because it is a significant part of the whole economy.

  • Create two-thirds of net new jobs
  •  Forty-four percent of U.S. economic activity.
  • GDP has grown  25% in real terms. 1.4% annually.
  •  43.5 percent of the yearly GDP
  • The big business needs a cluster of B2B services.


A carmaker will need close to 30,000 parts to assemble a car; small businesses make many of these parts in small factories.

What part of the economy is a small business?

Small businesses make 44% of the economic activity in the USA. There is a decline in the small business part. SBA claims that it is the more prominent businesses that grew faster.


30.2 million small businesses are op[erating in the USA, making 47.5% of the workforce. In 2015 1.9 million new jobs were created by small businesses. Small companies that are growing fast will be looking for more new employees.

How many small businesses start each year?

According to 2008 stats, 627,000 new starts every year: sole proprietorships, partnerships, and corporate entities. The gig workers are organizing themselves under the different statuses for tax purposes.

It is easy to establish partnerships or LLC, just filling some form and paying small fees. Those are one-person operations, mostly work from home or Co-working space renting.

How many small businesses succeed?

It is difficult to know what happens with so many small operations. Each industry has a different situation. For example, finance, insurance, and real estate are industries that are better for small businesses. 58% of these companies operate after four years.  Information businesses have the highest failure percentage; only 37% of them are still successful four years after the starting day.

40% of businesses are profitable, 30% break even every year, and 30% continue to lose money.

The survival rate for new small businesses?

According to Fundera, 50% at least five years, while 80% survive the first year. One area of complication is the Federal income taxes, government regulations, healthcare-management.


Competition is fierce, but owners have a favorable view of the future. There are challenges to face, but if you can adapt yourself and build a small team that can address the problems, you will enjoy a long time of making money.

Those small businesses that succeeded have their owners making good plans and excellent managing skills. Any business is depended on its management. The small ones are even more susceptible to mistakes in planning and managing. Before starting a new business, check your skills and traits for this kind of venture. Get from outside what you do not know or had no qualifications for it. Remember that you can not do or know everything.