There are 36.2 million small businesses in the United States, making up 99.9% of all U.S. businesses.
These small business statistics, drawn from the SBA's 2025 profile and other primary sources, cover employment, survival rates, industry data, demographics, and more.
Key Small Business Statistics at a Glance (2026)
The SBA defines a small business as any firm with fewer than 500 employees. That definition is broader than most people assume it includes everything from a solo freelancer to a manufacturer with 490 workers.
Here are the headline numbers:
Small Business Statistics — 2026
|
Category |
Metric |
Value |
|
Business Count |
Total small businesses (U.S.) |
~33 million |
|
Employment |
Americans employed by small businesses |
~62 million |
|
Economic Share |
Share of all U.S. businesses |
99.9% |
|
Economic Share |
Share of U.S. exporters |
~97% |
|
Technology |
Small businesses using tech platforms |
~85–90% |
|
Workforce |
Share of U.S. workforce |
~45–50% |
|
Economic Contribution |
Share of U.S. GDP (midpoint) |
~43–45% |
|
Business Activity |
New business applications (yearly) |
~5 million |
|
Survival Rate |
5-year survival rate |
~50% |
|
Job Creation |
Net new jobs (2023–24) |
Positive growth (exact not specified) |
One quick note on data you may have seen elsewhere: several widely circulated articles still report the total number of small businesses as 30.7 million.
That figure comes from secondary aggregators and is outdated. The SBA's 2025 primary data puts the number at 36.2 million.
How Many Small Businesses Are There in the U.S.?
Current Count
As of 2025, there are 36.2 million small businesses in the U.S. and that accounts for 99.9% of every business operating in the country. Put differently, large businesses are genuinely the exception, not the rule.
What's often overlooked is that 82% of small businesses have no employees at all. They're solo operations consultants, tradespeople, independent contractors where the owner is the entire staff.
So when people picture "small business," they're usually imagining something slightly bigger than what the data actually describes.
The remaining 18% do have employees, and that group carries a significant portion of the economic weight.
New Business Formation
Something shifted in 2020. Business applications filings that signal intent to start a new business roughly doubled compared to pre-pandemic years.
That surge didn't fade. Since then, more than 5 million new business applications have been filed every single year.
Between March 2023 and March 2024 specifically, 1,281,290 establishments opened and 1,125,979 closed a net increase of 155,311.
Small businesses accounted for 1.1 million of those openings.
|
Year |
Approximate New Business Applications |
|
2019 (pre-pandemic baseline) |
~3.5 million |
|
2020 |
~4.4 million (+24%) |
|
2021 onwards |
5 million+ annually |
|
Jan–Apr 2024 |
1.75 million filed |
Source: U.S. Chamber of Commerce; SBA Office of Advocacy
In practice, not every application leads to an operating business but the scale of the increase reflects a genuine and sustained shift in how Americans are approaching self-employment and entrepreneurship.
Small Business Employment Statistics
How Many People Work for Small Businesses?
62.3 million Americans work at small businesses. That's 45.9% of the entire U.S. workforce nearly half of everyone employed in this country works for a business with fewer than 500 people.
More telling than the total count is the job creation data. Between March 2023 and March 2024, small businesses were responsible for 88.9% of all net new jobs created in the U.S. contributing 1.2 million of the 1.4 million total net new positions.
On pay: small businesses offer an average wage of $30.42 per hour, which works out to roughly $63,000 per year. That's lower than large-corporation averages in many sectors, but the gap is narrower than many assume and varies significantly by industry.
Employment by Industry
Not all industries lean on small businesses equally. Some sectors are almost entirely made up of small operators; others are dominated by large employers.
Health Care & Social Assistance stands out it has the largest raw headcount of small business employees (9.26 million), even though small businesses only make up 43.7% of that sector. It's simply a very large sector overall.
Construction tells a different story: small businesses don't just participate there they dominate, employing more than 8 in every 10 workers in the sector.
Small Business Survival and Failure Rate Statistics
What the Real Numbers Show
This is the area where online misinformation is most persistent. You've probably seen the claim that "50% of small businesses fail in their first year." That's wrong — and it's worth being direct about that.
According to data from Statista, sourced directly from the Bureau of Labor Statistics, roughly 20% of new businesses close within their first year and only about 35% of businesses are still operating after a full decade. The actual survival picture looks like this:
|
Year in Business |
Approximate Survival Rate |
|
Year 1 |
~80% survive |
|
Year 2 |
~70% survive |
|
Year 3 |
~60% survive |
|
Year 5 |
~50% survive |
|
Year 10 |
~35% survive |
|
Year 15+ |
~25% survive |
Source: Bureau of Labor Statistics, Business Employment Dynamics via Statista
The 50% failure mark is real it just arrives around year 5, not year one. And that distinction matters enormously if you're using these numbers to make a business decision.
The average lifespan of a small business is approximately 8.5 years. Only 1 in 4 makes it past 15 years.
Why Small Businesses Fail
Data from multiple sources points to a consistent set of causes:
|
Reason for Failure |
Share of Respondents |
|
Lack of capital or cash flow |
32.8% |
|
No market demand for product/service |
42.0% |
|
Strong competition |
19.6% |
|
Unsustainable growth rate |
18.7% |
|
Lack of market interest |
17.5% |
Source: The Zebra/Oberlo survey data; SBA Office of Advocacy
Interestingly, cash flow and market demand problems are often connected. Many businesses discover too late that their pricing didn't account for the real cost of operations and by the time revenue picks up, the runway has run out.
In practice, owners commonly report that the warning signs were visible earlier than they acted on them.
Small Business Statistics by Industry
Which Industries Have the Most Small Businesses?
|
Industry |
Total Small Businesses |
|
Professional, Scientific & Technical Services |
4,881,738 |
|
Transportation & Warehousing |
4,089,883 |
|
Other Services (excl. Public Admin) |
3,860,519 |
|
Construction |
3,656,782 |
|
Real Estate & Rental & Leasing |
3,510,689 |
|
Administrative & Support Services |
3,191,552 |
|
Health Care & Social Assistance |
2,945,484 |
|
Retail Trade |
2,813,437 |
Source: SBA Office of Advocacy, Nonemployer Statistics & SUSB, 2022 (Census)
Professional services leads the count largely because it has a very low barrier to entry. A lawyer, a consultant, a graphic designer each one counts as a small business under SBA definitions.
Where Small Businesses Control the Sector
Some industries are structurally built around small operators. In Agriculture, Construction, and Other Services, small businesses don't just have a presence they account for more than 80% of all sector employment.
Accommodation and Food Services is worth noting here too. With 62.8% of sector employees working at small businesses, the restaurant and hospitality industry you interact with daily is overwhelmingly made up of small operators not chains.
Small Business Economic Contribution
GDP
Small businesses have historically contributed between 43.5% and 50.7% of U.S. GDP. The most recent hard figure from 2014 put that at approximately $5.9 trillion. Large businesses contributed $7.7 trillion in the same year.
It's worth being transparent: a more recent dollar figure isn't publicly available at the same level of detail. The range above reflects consistent historical patterns, not a precise current estimate.
Exports and Global Trade
This is a statistic that surprises most people. Of the 277,799 firms that exported goods from the U.S. in 2023, 270,014 or 97.2% were small businesses.
Their total export value: $588.4 billion, representing 33% of all exports by identified firms.
Small businesses aren't just feeding the domestic economy.
They're a significant engine of international trade too even if individual export volumes per firm are smaller than large-company shipments.
Small Business Owner Demographics
Women-Owned Businesses
Women own 44.6% of all U.S. businesses — approximately 14 million firms. Women make up 46.9% of the workforce, so their ownership share is roughly proportional to their labor force participation.
What the headline number doesn't show: 90.7% of women-owned businesses have no employees. The vast majority are sole operators. Only 9.3% have hired staff — compared to 18.9% of male-owned businesses.
Hispanic-Owned Businesses
There are 5.6 million Hispanic-owned businesses in the U.S., representing 16.5% of all businesses. Hispanics make up 18.1% of the workforce, and 91.7% of Hispanic-owned firms are non-employer businesses.
Black-Owned Businesses
4.63 million Black-owned businesses exist in the U.S. but the employee gap is stark. Only 4.2% have paid employees, compared to 17.9% of white-owned businesses.
The financing gap helps explain part of this: 49% of small business bank loans go to white-owned businesses, while only 3% go to Black-owned businesses. That disparity in capital access directly limits the ability to hire and scale.
Veteran-Owned Businesses
Veterans own 1.65 million businesses (5.3% of all businesses). Veterans make up just 4.3% of the workforce meaning they start businesses at a higher rate than their population share would predict.
Ownership by Demographic Group
|
Group |
Total Businesses |
Without Employees |
With Employees |
|
Women |
14,029,282 |
90.7% |
9.3% |
|
Men |
19,223,787 |
81.1% |
18.9% |
|
Hispanic |
5,603,202 |
91.7% |
8.3% |
|
Black or African American |
4,630,585 |
95.8% |
4.2% |
|
Asian |
3,437,680 |
81.1% |
18.9% |
|
White |
26,626,289 |
82.1% |
17.9% |
|
Veteran |
1,651,542 |
83.4% |
16.6% |
Source: SBA Office of Advocacy; Annual Business Survey & Nonemployer Statistics by Demographics, 2022 (Census)
Small Business Financing Statistics
How Most Businesses Get Started
The majority of small businesses start small financially sometimes very small.
- 33% of businesses launched with less than $5,000
- 58% launched with less than $25,000
Personal savings dominate at the startup stage, especially for the smallest firms. As businesses grow, the funding mix shifts toward credit cards, community banks, and credit unions.
The largest small businesses tend to use national banks. For owners trying to plan ahead, having a structured approach to managing a business budget from the early stages can make a measurable difference in how long a business stays solvent.
Loan Access
In 2023, large banks issued $84.2 billion in new loans to businesses with revenues under $1 million. Total new lending through loans of $1 million or less reached $242.9 billion.
Despite those volumes, access is far from easy:
|
Loan Metric |
Figure |
|
Major bank approval rate for small business loans |
26.9% |
|
Average small business bank loan amount |
$633,000 |
|
Businesses citing lack of capital as top challenge |
23% |
|
Businesses launched with under $5,000 |
33% |
Source: SBA Office of Advocacy (CRA Aggregate Data, FFIEC 2023); The Zebra/Fundera
At first glance, a 26.9% approval rate sounds manageable but consider that many small business owners don't apply at all because they assume they won't qualify. The actual unmet need is likely larger than loan application data captures.
Owners commonly report that the application process itself documentation requirements, time investment, unclear criteria is a barrier before they even get to the approval stage.
A business owner's credit score plays a significant role in whether an application moves forward at all, yet many small operators aren't actively tracking it until a rejection forces the issue.
Also Read: Percentage Calculators Hub
Technology and AI Adoption Among Small Businesses
Platform Use and Efficiency
- 95% of small businesses use at least one technology platform
- 87% report increased operational efficiency as a result
- 1 in 4 small businesses now use AI tools
The Chamber's 2024 data makes clear that technology adoption isn't a fringe activity it's close to universal. What varies is depth of use.
Many small businesses use basic tools like email platforms and point-of-sale software. Fewer have moved into AI-driven automation or analytics.
Cybersecurity Risks
The flip side of digital adoption is digital exposure.
|
Cybersecurity Metric |
Figure |
|
Share of all cyberattacks targeting small businesses |
43% |
|
Small businesses that close within 6 months after attack |
60% |
|
Owners using only strong passwords as protection |
15.5% |
|
Owners who have set up a VPN |
6.6% |
Source: SEMRush; Guidant Financial; The Zebra survey, 2021
43% of all cyberattacks target small businesses partly because small operators are perceived as easier targets than large enterprises.
As reported by CNBC, 60% of small businesses that experience a cyberattack close within six months, and these incidents cost businesses of all sizes an average of $200,000.
Given that only 6.6% of small business owners have basic VPN protection in place, the exposure gap is real and largely unaddressed.
Challenges Small Businesses Currently Face
Hiring and Keeping Staff
The labor shortage isn't abstract for small business owners it shows up directly in unfilled positions.
- 41% of small business leaders report difficulty filling open roles
- 90%+ have struggled to find qualified applicants
- Nationally, there are roughly 8.5 million open jobs but only 6.5 million unemployed workers
To compete with larger employers, small businesses are adjusting what they offer: 68% now provide flexible hours, and 48% offer hybrid or remote working options.
Some owners have also turned to outside guidance executive coaching has seen growing interest among small business operators looking to sharpen their leadership approach during periods of high staff turnover and hiring difficulty.
Financial Pressures and Outlook
- 66% of small businesses face significant financial challenges
- 65% of owners currently report their business is in good health (MetLife/U.S. Chamber Small Business Index — sentiment survey, not audited financial data)
- 67% report being comfortable with their current cash flow
The gap between the 66% facing financial challenges and the 65% who still say they're doing well isn't a contradiction it reflects the reality that many small business owners are navigating difficulty while still maintaining a functioning operation. Resilience is practical, not just a talking point.
Also Read: Collars and Co Net Worth
Conclusion
Small businesses are the structural backbone of the U.S. economy 36.2 million strong, employing nearly half the workforce, and generating the majority of net new jobs.
The data shows real challenges around survival, financing access, and hiring but also consistent, measurable economic contribution.
Frequently Asked Questions
What percentage of U.S. businesses are small businesses?
99.9% of all businesses in the United States are small businesses, according to the SBA's 2025 data. That accounts for 36.2 million firms across every industry.
What is the actual failure rate of small businesses?
Around 20% fail by year one, 50% by year five, and 65% by year ten. The common claim that "50% fail in year one" is inaccurate that threshold applies closer to the five-year mark per BLS data.
How many Americans work for small businesses?
62.3 million people 45.9% of the U.S. workforce are employed by small businesses. Small businesses also created 88.9% of all net new jobs between March 2023 and March 2024.
What is the most common reason small businesses fail?
No market demand is cited by 42% of failed business owners. Lack of capital or cash flow follows at 32.8%. Both factors often appear together in practice.
What qualifies as a small business under SBA rules?
The SBA generally defines a small business as a firm with fewer than 500 employees. Size standards vary slightly by industry some sectors use revenue thresholds instead of employee counts.
