Last Updated on Jan 19, 2024

17 Essential Small Business Statistics for 2024

Small businesses endured a lot during 2020 with the pandemic causing massive lockdowns and temporary unemployment for most. Yet, it is rebounding but with some different approaches and trends. 

Many now want more delivery services, less personal contact, and a highlight on cleanliness. Small business owners are getting younger with many seeking to do what they love rather than what just makes money. However, it’s the older business owners, in some cases baby boomers, that tend to have more success.

While the small business trends have gone up and down over the past couple of years, it is clear that small businesses are still booming and do well overall in smaller communities. That is due to a loyal fan base, selling excellent products, and providing great customer service. 

There is also money available to start a small business if you know where to look. All of the small business stats that you need to know are below.

A small business is listed as a company, corporation, sole proprietorship, or limited liability company, that has less than 500 employees.

  1. The world has 582 million entrepreneurs. 
  2. 15 million U.S. small business owners make it a full-time job.
  3. 64% of all new jobs in the U.S. come from small businesses. 
  4. 3.7 million businesses are considered micro-businesses with less than 9 employees.
  5. 72% put an emphasis on shopping with a local business over saving money in the best deal.
  6. Women and minorities own 19.9 percent of all businesses.
  7. 32% of business owners have a college degree.
  8. 39% of all entrepreneurs start up their businesses with cash.
  9. $45.6 billion was invested in green energy during the first quarter of 2021.
  10. Delivery services have grown to $126.91 billion dollars in 2021.
  11. 20% of all startups don’t make it past the first year.

1. Small businesses make up 30.2 million enterprises operating nationwide. 

The U.S. Small Business Administration states that small businesses make up the backbone of local economies. They generate money and keep it within the community. Research shows $48 of every $100 generated by a small business remains in the local community. Small businesses are also a source of tax money for local governments.

2. 48% of employees work for a small business

This is down from 52% that was reported 20 years ago but shows small businesses remain a stable force for employment in the United States. 

There are around 582 million small businesses in the world, so they make up the foundation of the economy. Approximately 15 million U.S. entrepreneurs make their businesses their full-time jobs. Small businesses employing people as they do also contribute greatly to the government by paying employment taxes, Social Security, and Medicare.

3. Small businesses make up 99% of all companies that have paid employees.

This is a nationwide statistic and proves that the number of people employed by a small business is a significant number.

Additionally, 64% of all new jobs in the U.S. come from small businesses. That means small businesses are a huge catalyst for the nation’s economy. It could be bigger if you include the businesses that are created to supply small businesses with the materials they need for their products and deliverables.

4. Small businesses create 4 million more jobs than large businesses.

The SBA states small companies have been a primary source of job creation since 2000, creating more than 8.4 million new jobs. This makes small businesses an important part of the national economy. 

Along with creating new jobs, small businesses help the economy in other ways. They generate 50% of the Gross National Product (GNP). Small businesses are a part of a supply chain that fuels larger companies with everything they need. This affects how efficiently the national economy runs. 

5. 18% of the U.S. workforce works for a small business with less than 20 employees.

Many of these businesses are located in small communities where entrepreneurship is promoted and they have local support. Additionally, 3.7 million businesses are considered micro-businesses with less than 9 employees.

These are typically family-owned businesses or those young startups with solo entrepreneurs. Small towns typically have strong Chambers of Commerce that are anxious to promote new businesses. Most of these types of businesses also include online ordering and e-commerce as well as owning shops in small towns. Small towns are loyal to local businesses with 72% putting an emphasis on shopping with a local business over saving money in the best deal.

6. Women own 11.7 million businesses in the U.S.

This is based on 2017 numbers, which are the last year referenced for business demographic data. The numbers, generated by the U.S. Census Bureau and the Annual business survey indicate more new businesses are owned by women as well as minorities. This makes up 19.9% of all businesses.

7. Only 32% of business owners have a college degree. 

Most have a bachelor’s degree. There are only 12% of business owners with only a high school degree. It is advantageous for those who plan on starting a business to have at least some education in things like developing a business plan, seeking loans, researching trends, and finding out who your customers are. Sales knowledge is also key. All of these types of educational aspects will help launch a business successfully, although they don’t guarantee a business will be successful over the long term.

8. 9.2 million U.S. businesses are owned by minorities.

These include various minority groups but statistics show more African Americans and Hispanics own more small businesses than other minorities. There are many reasons for this but most believe that they can make more money owning their own business than working for someone else. Other reasons could be to accommodate family and to fulfill their passions.

9. 29% of business owners say they started their own business to be their own boss.

Wanting to be your own boss is a primary reason many start a business. They feel they have the knowledge that other employers are using or appreciating. Plus, with being your own boss, you can make as much money as you can rather than working for wages. 

10. There is a 75% increase in demand for cleaning services. 

The pandemic made everyone nervous about germs and many are desiring regular cleaning services so that industry is trending up. If you have a little entrepreneurial spirit, this could be an excellent business for people to start who have financial or educational barriers. 

Additionally, those who make cleaning supplies will also see a profit as purchases of disinfectant sprays rose 4.8% a month from previous numbers. 

11. Delivery services are growing substantially in 2021 to $126.91 billion. 

This is a 10.3% compound annual growth rate (CAGR) above 2020 where the growth was $115.07 billion. Many people want delivery services now because they are working remotely and they want less contact with people than before due to coronavirus concerns. 

Food service deliveries are one of the hottest trends now and more people are ordering products online than ever before. 

12. $45.6 billion was invested in sustainable, or green energy businesses during the first quarter of 2021.

Green energy and sustainable businesses are trends that aren’t going to fade anytime soon. Many investors want to pull away from a company that drains natural resources and instead want to promote those who promote a healthy planet.

The $45.6 billion in investments into green energy compares to a $384.7 billion outflow in overall funding. Green energy is also moving beyond just pure energy to a wider circle of industries in an attempt to transform them into more sustainable businesses.

13. 20% of all small businesses don’t make it past the first year.

According to the U.S. Bureau of Labor Statistics, many businesses start with some success for the short-term but many small businesses fail before they reach their first anniversary. Interestingly, business entrepreneurs who are 55 years old and older have a higher success rate, but they tend to have a fewer number of employees. If you’re a young entrepreneur, perhaps it’s worth taking a page from the seniors’ playbook.

14. 34% of small businesses celebrate 10 years. 

The Bureau of Labor Statistics says the number drops as the years move on with only one-third of businesses surviving the past decade. A closed shop doesn’t necessarily mean business failure. Other reasons for closing could be a move, retirement, or selling the business.

While the number of small businesses that reach this milestone is fairly low, those that do can say they contributed to the U.S. economy for a decade.   

15. 46% of consumers stated in 2020 they prefer to shop at a small business.

More than half of these consumers state some of the reasons they like buying from small businesses is because it gives them a greater purpose in shopping and helps them give back to their communities. They also state that the majority of small businesses have better quality products and more personalized customer service.

Keep in mind, consumers are willing to buy from small businesses that have an online presence too. There’s strong consumer support for online or e-commerce businesses, especially after the past year with so many people shopping online during COVID.

16. 30% of SBA microloans financed startups.

Misconceptions about startup loans are rampant with many thinking there is no financing for a new enterprise, but the federal government does finance some startup businesses. These figures from 2020, supplied by Congressional Research Service, show there is startup capital available. The application process, however, is quite long and competition is fierce.

17. 39% of small business owners use cash for their startups. 

To become self-employed, you might need to tap into your own reserves. This may include cash they have saved over the years to plan for entrepreneurship, retirement money, family loans, or inheritances. Many start a business with an extremely low beginning investment of as little as $5,000.

There’s a growing number of businesses that can be started with a small amount of cash, which is giving small enterprises a chance to grow.

How can I fund a small business?

There are multiple ways to fund a startup business. Most people start with money they have saved because they see it as an investment in themselves. Others try crowdfunding, Small Business Administration (SBA) loans, small micro-loans, family investments, marketplaces like Fundera, small business financing companies like Guidant Financial, bank loans, or angel investors.

How can I ensure my business is successful?

The first thing to do is create a business plan. This involves researching your market, identifying your customers and their needs as well as your competition. You also can pre-sell your product.

The most important thing is to make sure you have enough money to carry you for a few months up to a year before you launch.

What is the best way to advertise a small business?

You don’t have to spend a lot of money on fancy advertising to get your business going. Social media marketing is often a free tool you can use to spread the word. You also need to submit your business to local listings, which are also free and offer things like referral discounts and loyalty programs.

Don’t forget to look into email marketing services. Platforms like MailChimp and Constant Contact are easy to use and are often free until your list of contacts grows to a certain point. 

Creating a marketing strategy might be one of the biggest challenges. To be successful, SMB owners need to have a plan, as opposed to posting a few tweets and sending an email now and then. New owners might consider spending a little of their cash flow to speak with a marketer or a marketing consultant to create a plan.

What is a small business incubator?

A small business incubator is where a local organization, such as the chamber of commerce or a local college, has programs and physical support to help businesses get started. 

This includes an array of things from classes on drafting a business plan or developing a digital marketing campaign, to physical office space, computers, and phones to coaching and capital. They also have many networking connections to help small business owners get going.