101+ Small Business Statistics of 2024 (Data, Facts & Trends)

Starting a small business and setting it up is one of the most challenging tasks. Every year only 1 out of 10 small businesses become successful. Besides, they have to keep track of things like developing business models, finding an appropriate location, securing funding, converting leads into sales, etc.

In the following article, we have compiled all the latest statistics related to small businesses. Besides, to ensure the originality of facts and figures, we have added all the data from trusted sources after researching and reviewing all the required reports.

Small Business Statistics: At A Glance (2024)

Small businesses are a vital part of the economy. Here are some statistics that shed light on their impact.

99.9% of business owners across the United States have small businesses. Besides, the number of small businesses in the country is recorded to be 33.2 million as of 2023.
$2000 to $5000 is the average cost required to start and run a small business in its initial stage.
50% of small businesses fail within five years of their establishment. At the same time, 20% of businesses fail within the first year of being established.
82% of small businesses fail due to improper cash flow. At the same time, 40% of the small businesses said that they failed due to the wrong choice of products that did not have enough demand in the market.
The average earning of the small business employee is recorded to be $45,857.
Around 50% of business owners reported that they prioritize marketing to boost the sales of their businesses.
26% of the business owners are female, while 74% of the small business owners are male.
More than 61.7 million employees were hired by small businesses in 2023, which is 46.4% of all US employees. Only 16% of small businesses have 1 to 19 employees, while most small businesses have no employees.
Education and health services have the highest number of employees, while professional services have the second highest number of employees in the small business industry.
More than 86% of business owners reported earning less than $100,000 annually.

How Many Small Businesses Fail?

20% of businesses fail in the first year of establishment. While. In the second year of the establishment, almost 30% of the small businesses tend to shut down. By the end of the fifth year, 50% of small business fail.

The following table displays the percentage of the failure of small businesses in different years of their establishments.

Year	Business Failure Rate
1st Year	20%
2nd Year	30%
5th Year	50%

42% of small businesses fail as their products lack any demand in the market. On the other hand, 82% of small businesses fail due to the lack of proper cash flow.

Reason For Failure	Percentage Of Businesses Failed
Poor marketing	14%
Poor product offering	17%
Being outcompeted	19%
Lack of talent.	23%
No market need for their products.	42%
Cash flow issues.	82%

23% of the small business owners reported that they have failed as they lacked the right team members and proper support to run their business.

How Many Small Businesses Are There In The United States?

There are 33.2 million small businesses in the United States as of the year 2023. They were able to create almost 8.7 million new jobs in recent years.
46% of the people in the United States work for small businesses. Over 90% of the business population represents small and medium-sized businesses.
73% of the small businesses in the United States are expected to be working remotely by the end of the year 2028.
Marketing is considered to be the primary strategy for the growth of small businesses by 50% of business owners.

Small Business Owner Statistics

84% of the entrepreneurs in the small business industry said that they have to work overtime in order to fulfill the needs of their businesses due to a lack of workforce.
29% of business owners were inspired to have their own business due to the flexibility of time and wanted to be their own boss.
Almost 30% of business owners need external accountants for their businesses as they do not have enough finances to hire one.
31% of business owners reported that they give utmost priority to CRM systems as their top priority tech requirements.
56% of small business owners reported that digitalization of business is very expensive for small businesses.
92% of small business owners reported that they don’t regret starting their own businesses.
39% of the business owners reported that they are very happy with their work and their small business.
More than 34% of the businesses said that they started with less than $5,000.

Small Business Owner Demographics

Over 39% of small businesses are owned by women, while 61% of business owners are men.
Almost 71% of small business owners are reported to be white. Comparatively, black or African American own 6% of small businesses.

The following table displays the percentage of small business owners according to their race and ethnicity:

Race/ Ethnicity	Percentage Of Small Business Owners
White	70.8%
Hispanic/Latino	14.4%
Asian	6.2%
Black or African American	6.0%
Unknown	2.1%
American Indian and Alaska Native	0.5%

Only 7% of small businesses are owned by adults in the age group of 20 to 30 years. Besides, 63% of small business owners are above the age of 40.
Only 9% of the adults with a master’s degree own a small business. At the same time, 52% of business owners have only a bachelor’s degree.

The following table displays the percentage of small business owners with different educational levels.

Education Level	Percentage Of Small Business Owners
Master’s	9%
Bachelor’s	52%
Associate	21%
High School	10%

LGBTQ community owns less than 1% of American small businesses.
42% of the Black entrepreneurs said that they were very happy owning their small businesses and wanted to own their startups as they faced issues in the American corporate world.

Small Business Employment Statistics

Small businesses employ around 46.4% of the employees in the United States.
80% of small businesses have no employees. According to the data obtained, almost 27.1 million businesses out of 33.2 million small businesses have no employees working with them.
Only 16% of small businesses have around 1 to 19 employees. Besides, only 650,003 small businesses have more than 20 employees.

The following table displays the number of employees in different small business organizations.

Number Of Employees	Number Of Small Businesses
1-19	5,431,541
20-499	650,003
No employees	27,104,006

Source: Forbes advisor

In the last 25 years, small businesses have provided 12.9 million jobs. Besides, the professional and business service industry has led to the creation of 1.1 million jobs in the last year alone.
Most job openings in small businesses are recorded in the health and education industry. Besides, the second most job openings are recorded in the professional and health services industry.

The following table displays the number of employees in small businesses in different industries.

Industry	Number Of Employees
Education and health services	34,725
Professional and business services	19,295
Wholesale and retail trade	18,989
Manufacturing	14,718
Hospitality and Leisure	12,635
construction	11,271
Financial activities	10,725
TransportationAnd utilities	9377
Public administration	7410
Other services	7186
Information	2721
Agriculture and related industry	2291
Mining, quarrying and oil and gas extraction.	603

Home health and personal care are the sectors with the highest forecasted job growth. The Leisure and hospitality industry lost 633,000 jobs in the year 2022.
Only 14% of jobs out of the total jobs lost in the COVID-19 pandemic will be recovered in the year 2023. Further, by the end of the year 2031, only 87% of the jobs that are lost during covid can be recovered
56% of the small businesses said that they usually do not find loyal employees who may stay with them for the long term.
63% of small business owners said that they have to hike employee compensation to retain their employees.
There are 582 million entrepreneurs in the world as of 2023.
15 million business owners have to work full time for their businesses.
Since the year 1982, the number of small businesses has doubled in the United States.

Small Business Revenue Statistics

70 to 80% of the small businesses said that they lost between 30 to 50% of their revenue during the pandemic.
More than 86% of small business owners earn a yearly salary that is lower than $100,000.
65% of the entrepreneurs said that they do not have enough cash to keep their businesses going.
27% of the small businesses estimated that their annual sales would exceed $200,000.
45% of the non-employees said that they had a revenue that was less than $25,000.

Small Business Industry Statistics

12% of the Small businesses are from the restaurant and food industry. Besides, 11% of the small businesses are from the retail industry.

The following table displays the percentage of small businesses in different industries.

Industry	Percentage Of Small Business
Food and Restaurants	12%
Retail	11%
Business Services	11%
Health, Beauty and Fitness	9%
Residential and commercial services	7%

47% of the small businesses reported that they run marketing campaigns independently.
50% of the small businesses are operated from home and do not have any headquarters.

Social Media Usage Of Small Businesses

86% of the small businesses said that they used Facebook for advertising and marketing as their leading social media platform.
More than 73% of small businesses are investing in social media marketing to generate leads and attract new customers.
After the year 2019, 63% of small businesses increased their investment in social media marketing.
Small businesses gain 60% of their new customers from Instagram.
94% of the small businesses said that they posted monthly on social media. While at the same time, 52% of the small business owners posted daily.

The following table displays the percentage of small businesses that post on different days.

Posting Period	Percentage Of Small Business Owners
Daily	52%
Weekly	79%
monthly	94%
Less frequently	6%

Around one-third of the most viewed Instagram stories are from small businesses.
Almost 27% of small business owners spend less than one hour on the promotion of their brand every day.

Small Business Finances

66% of the small businesses said that they face financial issues while running their small business. At the same time, 43% of small business owners said that they face the most challenges when they have to keep track of their operating expenses.
If small businesses are not able to earn for two months, 86% of them will need extra funding or will have to cut costs.
40% of small business enterprise owners admitted that they have debts of around $100,000 or more.
After the year 2019, the approval rate of institutional loans for small businesses was recorded to be 65%.
The average cost required to start a retail business is $32,000.
The most approved loan is a merchant cash advance. It has an approval rate of 84%. Besides, the approval rate of business loans is only 57%.

The following table displays the percentage of approval rates for different types of loans:

Loan Type	Approval Rate
Auto or equipment loan	79%
Merchant cash advance	84%
Business line of credit	71%
SBA loan or line of credit	65%
Business loan	57%
Personal loan	43%

39% of business owners used cash to finance their small business needs. In contrast, 10% of business owners borrowed money from their family and friends.

The following table shows the percentage of small business owners that used different methods for financing their businesses.

Financing Method	Percentage Of Small Business Owners
Cash	39%
ROBS	20%
Family and friends	10%
SBA Loan	9%
Line of credit	95
Unsecured Loan	5%
Equipment Lease	3%
HELOC	3%

Small Business Technology Usage

79% of small businesses reported that they are using digital tools to communicate with their customers and suppliers.
At least one of the digital platforms is utilized by 84% of small business owners to share their products online.
55% of the small business owners said that the technology renders a great help in managing their customer interactions.
Ease of use is one of the most important factors considered by small business owners when they are considering investing in new technology. It is followed by the factors like a trustworthy vendor and the price of the technology.

The following table displays the percentage of small business owners that consider different factors while investing in technology.

Factor	Percentage of Small Businesses That Give Preference To The Factor.
Ease of use	69%
Trustworthy	63%
Price	61%

Source: Semrush.

Small businesses that invest more in technology tend to earn twice as compared as other small businesses and are more likely to grow rapidly in the upcoming years.
More than 33% of businesses prioritize CRM platforms over the other types of technologies required to run a business.
30% of small businesses are planning to use technology to provide customers with automatic recommendations and provide them with a personalized experience.

Consumer Behavior

130 million customers tend to open shopping posts every month in order to gain more knowledge about a product.
46% of consumers started shopping from small businesses after the year 2020.
53% of small business customers shop from the business as they want to give back to society from their end.
45% of consumers prefer personalized services from small businesses.
48% of the consumers said that they prefer small businesses to get the highest quality items.
91% of the consumers say that they prefer small businesses only when it is convenient for them.
On receiving excellent services, 77% of the customers are ready to pay more for small businesses.
Around 80% of the people said that they research small businesses and their product quality before buying from them.

Effect Of Covid-19 Pandemic On Small Businesses

After the outbreak of Covid-19, almost 29% of small businesses had to face heavy losses and were on the verge of being closed down.
70% of the small enterprises said that they had to seek help for their finances after the pandemic due to the heavy losses.
There was a 41% drop in the activities of African-American businesses after the COVID-19 pandemic.
E-commerce sales of small businesses boosted rapidly by around 50% during the COVID-19 pandemic.
67.8% of small business owners in the United States said that they were negatively affected due to the pandemic. Besides, 11% of them reported that they had to reduce their budget for the business.
75% of owners think that crises similar to COVID-19 can happen again, so small businesses need to be prepared.

The following table displays the effect of covid-19 pandemic on small business owners.

Impacts On Business	Percentage Impact On Small Businesses
Loss of revenue	23%
Reduced budget	11%
Temporary closure	11%
Cut down wages	10%
Temporary pivot	7%

Almost 45% of small businesses were moderately affected by the COVID-19 pandemic.

Small Business Trends In 2024

65% of the small businesses said that they would invest in technology like artificial intelligence in the upcoming days.
By the end of the year 2025, it is more likely that 80% of business owners will stop investing in the personalization of the products due to the lack of returns.
The remote work that increased during the pandemic by 13.5% is more likely to remain hybrid.

Small Business Habits and Characteristics

89% of business owners work on weekends, while 81% work at night.
Small business owners aged 55 or more have more chances of survival. However, they also struggle to find employees.
62% of owners work more than 50 hours a week, while 14% work only 30-39 hours a week.
48% of Gen Z and millennials said that they started their business on a passionate idea.
38% of business owners agreed that discipline is necessary for success in small businesses.

Future Stats of Small Businesses

Due to insufficient ROI, over 80% of businesses will stop investing in personalized projects by 2025.
Only 30% of small businesses are expected to survive 10 years or longer. 50% of them will only last five years or longer.
By the end of 2030, 600 million jobs will be needed. Small businesses will provide employment opportunities to fulfill a significant portion.
66% of businesses will rely on eCommerce websites as their prime sales channels and product promotions.
Remote work and work-from-home jobs for small businesses will see a 13.5% rise despite no pandemic.
By the end of 2024, small businesses will spend $526.17 billion on advertising.

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Conclusion: Small Business Statistics (2024)

That’s all about the state of small business in 2024.

The number of small businesses is seen to be growing rapidly. Many adults prefer starting their startup instead of working for other companies.

Besides, starting a small business has become comparatively easier due to the implementation of digitalization. Hence, adults with full-time or part-time jobs start their own businesses to earn some extra income.

It will surely be interesting to see the growth of small businesses by the end of the year 2024.