The numbers tell a remarkable story: 34.8 million small businesses operate in the United States as of 2025, representing 99.9% of all American businesses. These enterprises serve as the backbone of our economy and contribute 43.5% to the United States' GDP. As small business owners, we know these figures help you understand your position in the market.
Small business growth statistics showcase their role as job creators, generating over 12.9 million jobs in the past 25 years. The reality can be tough though – about 595,000 businesses shut their doors yearly in the United States.
Yet small business revenue statistics show remarkable resilience. Almost half of Americans (46.4%) earn their living through small businesses. A fascinating detail emerges among the roughly 6 million small businesses with employees – 49% run with just one to four workers.
This piece breaks down crucial small business statistics for 2025 that business owners need to understand to thrive in today's competitive market. We've gathered data on everything from startup trends to technology adoption rates to help you measure your business's performance and make smart decisions.
The current landscape of small businesses in 2025
Small enterprises dominate America's business landscape in 2025, and the numbers tell a compelling story. The United States now has 34,836,451 small businesses, which make up 99.9% of all businesses nationwide. These numbers grew 0.28% last year and jumped 9.7% since this decade began.
Total number of businesses
The small business sector shows remarkable strength. Different sources estimate between 33.2 million and 36.2 million small businesses operate throughout America. These companies don't spread evenly across the country.
They concentrate in populous states with business-friendly policies. California leads with about 3.43 million small businesses. Texas follows with 2.87 million, then Florida with 2.77 million, and New York with 1.78 million.
The economic impact of these businesses speaks volumes. A net increase of 155,311 businesses emerged between March 2023 and March 2024, with 1,281,290 openings compared to 1,125,979 closings. Business applications now surge at record speeds – more than 440,000 each month, 90% faster than before the pandemic.
Solo ventures vs. employer firms
Today's small business world features one standout characteristic – solo operations rule. A whopping 82% of America's small businesses run without employees. This translates to roughly 28.4 million one-person operations.
These solopreneurs pump $1.7 trillion into the U.S. economy, accounting for 6.8% of total economic activity. California leads this category with 3,502,950 solo businesses. Florida, however, claims the highest per capita solo startups – about 13.3 non-employer establishments per 100 people.
Employer firms make up a smaller yet vital part of the small business ecosystem. The number of firms with 1-19 employees and 20-499 employees reached 5.52 million in 2022, up from 5.38 million in 2021.
A typical small business employer has 11 workers, while larger companies average 3,302 employees. New businesses under two years old usually employ 6 people. Companies operating beyond 20 years have around 58 employees.
These businesses employ 46.5% of the private sector workforce – about 59 million Americans. This shows a 4.37% drop from last year's total of 61.7 million people.
Home-based business trends
The business world has seen a remarkable shift over the last several years. The Small Business Administration reports 50% of U.S. businesses now operate from home. Some sources suggest even higher numbers, with estimates showing 55% of small businesses as home-based operations.
Home-based entrepreneurship offers clear advantages. These ventures need much smaller startup investments than traditional businesses. The tax benefits prove substantial – entrepreneurs can write off portions of their mortgage, property taxes, insurance, utilities, and maintenance costs tied to business spaces.
Savings on commuting, work attire, and daily meals make home-based business ideas excellent testing grounds for entrepreneurial concepts.
Technology plays a vital role in this evolution. Modern home computer systems pack enough power to handle tasks that once needed entire teams. Cloud computing helps small businesses grow while cutting costs. About 85% of small businesses believe technology will stimulate their growth, and 94% see cybersecurity as essential to their operations.
The combination of economic, technological, and lifestyle factors indicates home-based businesses will remain central to the small business world through 2025 and beyond.
Startup trends and growth statistics
The entrepreneurial spirit in America keeps soaring through 2025. The country now sees an average of 430,000 new business applications monthly. This represents a 50% jump from pre-pandemic 2019 levels.
These small business numbers tell an exciting story about both quantity and quality, as more applications come from ventures ready to hire employees and boost economic growth.
New business formation rates
The Census Bureau's latest figures show business applications hit 473,679 in August 2025, a 0.5% bump from July. The number of projected business formations expected to create payroll tax liabilities within four quarters grew to 28,725, showing a 0.8% rise from last month. These numbers point to a thriving startup environment where new companies plan to create jobs.
Business applications have stayed strong throughout 2025. March brought exceptional results with 452,255 total applications, including 161,601 high-propensity applications (those most likely to become employer businesses). Corporate filings jumped 29.1% to 69,559, showing founders' commitment to build scalable companies.
Some sectors are growing faster than others. The global AI market should grow at a compound annual rate of nearly 30% from 2024 to 2030. Climate technology looks set for almost 25% growth from 2023 to 2033. Decentralized finance (DeFi) is expected to expand by approximately 11% from 2024 to 2029.
Motivations for starting a business
Americans are starting businesses at historic rates in 2025. Recent surveys reveal interesting reasons behind this trend:
- 47% want to be their own boss
- 23% turn side gigs into full businesses
- 12% want to give back to their communities
Many successful companies started as side projects. People began by earning extra income before turning their ventures into full-time businesses. Technology has made starting a business cheaper and more available than ever before in 2025.
Women entrepreneurs are making waves in 2025. They're becoming leaders in technology, health and wellness, and sustainable products. More women are starting businesses than in previous years, with minority women leading much of this growth.
Top states for new business growth
Your location can make or break your startup's success. The West leads regional growth with an 8.6% increase in business applications. States like Arizona, Colorado, and Nevada attract entrepreneurs with lower taxes and operating costs. The South follows with a 6.3% increase, thanks to strong activity in Texas and Florida.
Florida shines with small businesses growing 16% between 2016 and 2022—ranking fourth nationwide. Georgia takes second place overall with the third-highest entrepreneurship rate and second-best business environment. Utah claims third place with great funding options and a 2% year-over-year employment growth rate.
Looking at business survival rates and access to capital, South Dakota tops the list with an impressive 81.13 business-friendly score. Delaware (78.41) and Utah (78.00) follow closely. These states share key features: great access to capital, skilled workers, and business-friendly tax policies.
The 2025 entrepreneurial landscape shows both hope and flexibility. Founders use sophisticated tools and strategies to take advantage of economic opportunities.
Understanding small business failure statistics
The harsh truth about small business failures gives entrepreneurs a reality check. New ventures might be booming, but many don't last long. Data shows that 20% of small businesses fail within their first year. This debunks the myth that half of them fail right away. The numbers look bleaker over time – 50% close their doors within five years, and only 34.4% make it to ten years.
Failure rates by year
Business survival rates drop steadily as time goes on. The Bureau of Labor Statistics confirms that 20.8% of businesses shut down in their first 12 months. The numbers get worse from there – 40% close within three years and nearly 50% are gone by year five. The long-term outlook is even tougher. 65.8% don't make it past a decade, and 73.3% close within 15 years.
Different industries show varying survival rates. Agriculture, forestry, fishing, and hunting businesses lead the pack with 87.5% surviving their first year and 50.5% still running after a decade.
On the flip side, mining, quarrying, and oil and gas extraction businesses struggle the most – just 24.5% reach the 10-year mark. Healthcare sits in the middle, with 82.7% making it through year one but only 35.7% celebrating their tenth anniversary.
Common causes of failure
Learning about why businesses fail helps entrepreneurs avoid the same mistakes. Money problems top the list – 82% of failed businesses blame financial issues. This often happens when initial funding falls short and profits take longer than expected. Many owners don't realize how much they'll need to start or how long it'll take to make money.
Other major reasons for failure include:
- 42% failed because the market didn't need their products or services
- 23% closed because they didn't have the right team or skills
- 19% couldn't keep up with competition
- 14% had marketing strategies that didn't work
Poor planning lies at the heart of many business failures. Some entrepreneurs jump in without proper market research and can't stand out from competitors. Others try to grow too fast, which strains their cash flow. One expert puts it simply: "These can be summed up in three words – Lack of Planning".
How experience affects success odds
Previous startup experience plays a big role in business survival. Research shows that founders who've run startups before do better than first-timers. A study found that the number of previous new venture involvements and the level of management role played in such ventures was by far the most significant factor in determining success.
Regular business experience doesn't help as much. Studies show that age, years of business, management, and technical experience were not significantly related to performance. This means you need hands-on startup experience rather than general business knowledge.
A meta-analysis from 2009-2020 covering 572,888 cases found a small but noticeable link (r = 0.095) between entrepreneurs' prior experience and firm performance. Education level, business type, and cultural context affect this connection.
The takeaway for future entrepreneurs? "The best way to learn about making a company successful is to work in, or better to run a new firm". Working at startups teaches more than getting another degree or corporate job. Some studies even found that advanced degrees beyond bachelor's level hurt venture performance.
Anyone dreaming of starting a business should first try working at a startup or new company. It's the best training ground for future business owners.
Revenue, costs, and profitability insights
Small business economics showed striking patterns in their 2025 financial performance data. The average monthly earnings rose to $62,300 in June 2025, marking a substantial $13,000 increase from May's $49,300. These numbers reflect an impressive financial trajectory that nearly doubled since early 2025.
Small business revenue statistics
Small enterprises demonstrated encouraging monthly revenue figures. The average monthly revenue hit $614,200 in June 2025, a substantial jump from May's $547,600. Small business earnings grew by 75% in the first half of 2025 while inflation stayed below 3%.
Business confidence remains strong as 69% of small businesses expect revenue increases next year. This outlook shows a transformation from last quarter that saw a nine-point movement toward lower predicted revenue.
Revenue expectations vary by business size. Solo entrepreneurs typically earn $49,489 annually, while businesses with 1-4 employees generate $387,000. Companies with 10-19 employees bring in $2.16 million. 78% of solo businesses earn under $50,000 yearly, and just 0.2% reach the million-dollar mark.
Top business expenses
Small businesses show consistent spending patterns. Wages and benefits consume 70% of expenses, while inventory costs take up 17-25% of budgets. The average monthly expenses reached $551,900 in June 2025, showing a $53,600 rise from May's $498,300.
Key expense categories saw notable increases in 2025:
- Commercial rent rates hit $33.15 per square foot in May 2025, up 4.8% from last year
- Commercial insurance rates grew 3% on average in Q1 2025
- Utility costs doubled from 2024, with companies requesting $9 billion in electricity-rate increases during Q2 2025
The most common deductible expenses include advertising, continuing education, bank fees, insurance, repairs, legal services, office supplies, telecommunications, utilities, shipping, rent, salaries, travel, and business meals. Self-employed individuals can also deduct health insurance premiums as a major expense.
Profitability by industry
Industries show dramatic differences in profitability. Professional Employer Organizations lead with a remarkable 96.0% profit margin in 2025. Healthcare Staff Recruitment Agencies follow at 90.3%, and Psychic Services at 88.3%. Commercial Leasing (85.6%) and Physical Therapy Rehabilitation Centers (84.8%) round out the top five most profitable categories.
Restaurants show strong 32.90% gross profit margins with 10.62% net profit margins. Other sectors display varying results: computer services (24.14% gross/4.15% net), engineering/construction (14.45% gross/2.95% net), and retail (32.22% gross/4.60% net).
Business consultants earn over $200,000 annually, making it one of the most profitable small business options. Social media managers earn about $60,000 per year, while mobile app developers make around $181,499 annually. Professional translators earn approximately $59,440 yearly.
Experience levels associate strongly with profitability. New owners with less than a year of experience typically earn $34,000, while those with 20+ years make about $75,000. 86% of small business owners earn under $100,000, and 30% take no salary, choosing to reinvest their earnings.
Technology and digital adoption in small businesses
Small enterprises face a crucial moment in 2025 as digital transformation becomes essential for survival rather than just a competitive edge. Recent statistics paint a clear picture – 73% of small businesses now maintain websites. B2B buyers have changed their habits too, with 78% searching for products on mobile devices and social platforms more than ever before.
Website and mobile app usage
The numbers tell an interesting story. 48% of small businesses have mobile applications to connect with customers, showing a significant 16% jump from 2021. The future looks even brighter as 27% of businesses without mobile apps plan to invest in them.
The reason makes perfect sense – people spend 3.5 hours daily on mobile devices, and 88% of that time goes to mobile apps instead of mobile websites.
Small businesses choose mobile apps for clear reasons. 19% build apps to improve customer service, while another 19% focus on boosting their brand. The data shows customers are 50% more likely to make appointments or bookings through a mobile app compared to other digital channels. Smart businesses know this – 37% develop apps for both iOS and Android to reach more customers.
AI and automation trends
AI has become a game-changer. Over 50% of small businesses are learning about AI implementation, while 25% already use it in their daily operations. The growth is happening faster than expected – 40% of small businesses now use generative AI, twice as many as in 2023.
Businesses use AI in several ways:
- Marketing and customer engagement lead the pack (77% see the biggest effects here)
- Content creation shows promise (84% ready to automate marketing content)
- Customer service gets attention (59% want to automate customer questions)
- Cash flow forecasting matters (53% believe it solves key challenges)
The confidence in AI runs high. 66% of current AI users see it as crucial for staying competitive. Even better, 72% of small business owners have positive thoughts about AI technology.
E-commerce and online sales data
E-commerce makes up 20% of worldwide retail sales today. This number should grow to 22.6% by 2027. The numbers are huge – global retail e-commerce sales have hit $5.8 trillion in 2024 and should pass $8 trillion by 2027.
Small retailers must adapt to changing customer habits. People want smooth transitions between online and in-store shopping.
This pushes businesses to invest in new tech. 92% of businesses employ AI-powered personalization to make online shopping better. The augmented reality market shows massive potential too, expected to grow from $20 billion in 2023 to $723 billion by 2034.
Who owns small businesses today?
Small business ownership in 2025 showcases unprecedented diversity. Business demographics paint a picture of significant variations among gender, race, and specialized groups. These patterns mirror the evolution of America's entrepreneurial world.
Gender and racial ownership breakdown
Men dominate small business ownership at 61%, while women own 22% of businesses. Both genders jointly own the remaining 14%. Some sources paint a different picture, suggesting women's ownership ranges between 42.7% and 44.6%. White owners lead 85% of small businesses.
Asian American owners account for 11%, Hispanic owners make up 7%, and Black or African American owners represent 3%. Non-Hispanic Black women lead the pack among female business owners at 18%. They also represent 19% of businesses that started since 2020.
Veteran and LGBTQ+ ownership
Veterans play a significant role in business ownership. They run more than 1.6 million firms and provide jobs to nearly 3.3 million workers. The veteran community makes up 5.5% of all U.S. business owners. LGBTQ+ owners hold at least partial ownership in 7% of small businesses.
About 1.4 million LGBTQ+ business owners operate nationwide. These businesses add $1.70 trillion to the U.S. economy each year.
Trends in family-owned businesses
Family businesses stand as the backbone of the U.S. economy. They make up 90% of all U.S. businesses and account for 87% of business tax returns. These enterprises generate 64% of GDP and employ 62% of the workforce. Women hold CEO positions in 24% of family businesses.
The future looks promising as 31.3% of businesses plan to have female successors. Family firms under female leadership report 40% lower family attrition rates.
Conclusion
Small business statistics for 2025 show how resilient and adaptable American entrepreneurs have become. The numbers tell an impressive story: 34.8 million small ventures make up 99.9% of all U.S. businesses and generate 43.5% of the GDP. These businesses employ almost half of all Americans, which proves how vital they are to our nation's workforce.
Some trends stand out clearly in the data. Solopreneurs lead the way – 82% of small businesses run without employees, yet they add $1.7 trillion to the economy. Half of all small businesses now operate from home, showing a remarkable upward trend. The survival rates present a mixed picture. While 20% fail in their first year and 50% by year five, business owners with specific entrepreneurial experience fare much better than those with general business knowledge.
The financial outlook brings good news for small business owners. Monthly earnings have grown to $62,300 in June, almost twice the amount since early 2025. Of course, 69% of owners expect their revenue to grow next year. Rising costs remain a challenge, especially for commercial rent, insurance, and utilities.
Profit margins vary greatly by industry. Professional Employer Organizations enjoy huge 96% profit margins, while other sectors work with much smaller margins.
Technology has become essential rather than optional for success. Most small businesses have websites now, and 48% offer mobile apps – up 16% from 2021. AI adoption has taken off, with 40% of small businesses using generative AI, twice as many as last year. Ownership diversity still needs work. Men own 61% of small businesses compared to women's 22%, and white ownership stands at 85%.
Yet some positive changes are happening. Veteran-owned firms now number 1.6 million, and LGBTQ+ businesses contribute $1.7 trillion yearly. These numbers help small business owners understand where they fit in today's market and plan better for their future.
FAQs
Q1. What is the current landscape of small businesses in 2025?
As of 2025, there are approximately 34.8 million small businesses in the United States, representing 99.9% of all businesses. These enterprises contribute 43.5% to the country's GDP and employ nearly half of the American workforce. Notably, 82% of small businesses are solo operations, and 50% are home-based.
Q2. How are small businesses adopting technology in 2025?
Technology adoption has become crucial for small businesses in 2025. About 73% of small businesses now have websites, 48% have mobile applications, and 40% use generative AI. E-commerce represents 20% of all retail sales, with global retail e-commerce sales expected to surpass $8 trillion by 2027.
Q3. What are the survival rates for small businesses?
Small business survival rates show that 20% fail within their first year, 50% don't make it past five years, and only 34.4% survive to the ten-year mark. However, these rates vary by industry, with agriculture businesses showing the highest survival rates and mining enterprises facing the steepest challenges.
Q4. How profitable are small businesses in 2025?
Profitability varies significantly across industries. Professional Employer Organizations lead with a 96% profit margin, while other sectors like restaurants show 32.90% gross profit margins. On average, small business monthly earnings reached $62,300 in June 2025, nearly doubling since early 2025. However, 86% of small business owners pay themselves under $100,000 annually.
Q5. Who owns small businesses in 2025?
Small business ownership in 2025 is becoming more diverse. Men own about 61% of small businesses, while women own 22%. Racially, 85% have majority-White ownership, 11% are Asian American-owned, 7% Hispanic-owned, and 3% Black or African American-owned. Veterans own over 1.6 million firms, and approximately 7% of small businesses are at least partially LGBTQ+-owned.
