There are 36,207,130 small businesses in the United States, making up 99.9% of all businesses and employing 62.3 million people, or 45.9% of private-sector workers, according to the SBA Office of Advocacy’s Frequently Asked Questions About Small Business 2026. About half of new businesses survive five years: 51.4% of establishments that opened in March 2020 were still operating in March 2025 (Bureau of Labor Statistics).
The 17 small business statistics below cover how many small businesses there are, their role in the economy, new business formation, survival rates, financing, and how small firms are adopting AI and online sales. Each figure comes from a government agency or a named, dated survey, with links in the Sources section.
Updated October 2026.
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Key statistics at a glance
- The US has 36,207,130 small businesses, 99.9% of all businesses (SBA Office of Advocacy, February 2026).
- Small businesses employ 62.3 million people, 45.9% of private-sector workers (SBA, 2026).
- Small businesses account for 43.5% of US GDP (SBA, 2026).
- Americans filed 534,947 business applications in September 2026 alone (US Census Bureau).
- 77.9% of new establishments survive their first year, and 51.4% survive five years (BLS, March 2025 data).
- 60% of small employer firms applied for financing in the past year, but only 42% of applicants got the full amount (Federal Reserve, 2026).
- 46% of small employer firms use AI (Federal Reserve Small Business Credit Survey, 2026).
How many small businesses are there in the US?
1. There are 36,207,130 small businesses in the United States
According to the SBA Office of Advocacy’s Frequently Asked Questions About Small Business 2026, released February 3, 2026, the US has 36,207,130 small businesses. The SBA defines a small business, for research purposes, as an independent business with fewer than 500 employees.
2. 99.9% of US businesses are small businesses
The same SBA report finds 99.9% of all US businesses are small. The count includes both employer businesses with staff and nonemployer firms, such as self-employed owners and sole proprietors with no payroll.
How do small businesses contribute to the economy?
3. Small businesses employ 62.3 million people, 45.9% of private-sector workers
The SBA Office of Advocacy reports that US small businesses employ 62.3 million people, or 45.9% of all private-sector employees. That makes small businesses, taken together, the largest employer in the country.
4. Small businesses generate 43.5% of US GDP
According to the SBA’s 2026 FAQ, economic activity from small businesses makes up 43.5% of US gross domestic product. In other words, the 0.1% of businesses that are large still produce more than half of national output.
5. Small businesses pay 38.7% of total private-sector payroll
Small businesses pay 38.7% of total private-sector payroll, according to the SBA. Their share of payroll (38.7%) is lower than their share of employment (45.9%), so the average small business job pays less than the average job at a large company.
6. Small businesses generate over 60% of net new jobs
The SBA’s FAQ About Small Business 2026 notes that small businesses generate over 60% of net new jobs, even though they employ less than half of private-sector workers. The SBA’s report also tracks quarterly changes in small business jobs from 1994 to 2024, which show how sensitive small-firm hiring is to the business cycle.
How many new businesses start each year?
7. Americans filed 534,947 business applications in September 2026
The US Census Bureau’s Business Formation Statistics (October 14, 2026) report 534,947 seasonally adjusted business applications in September 2026, up 0.5% from August. Applications are filings for an Employer Identification Number (EIN), so they include many sole proprietors who never hire.
8. September 2026 applications are projected to produce 29,022 new employer businesses
The Census Bureau projects that 29,022 new businesses with payroll will form within four quarters from the applications filed in September 2026, up 1.4% from August. Only a small fraction of business applications become employers; most remain one-person businesses.
If you are one of the new founders, start with a name that is available as a business, a domain and a social handle. The business name generator suggests ideas, and our business name search guide explains how to check state registries.
What percentage of small businesses fail?
9. 77.9% of new establishments survive their first year
Bureau of Labor Statistics Business Employment Dynamics data show that of the private-sector establishments that opened in the year ending March 2024, 77.9% were still operating in March 2025. In other words, about one in five new establishments closes within its first year.
10. 51.4% of new establishments survive five years
Of the establishments born in the year ending March 2020, at the start of the pandemic, 51.4% were still in business five years later in March 2025, according to BLS data. Roughly half of new businesses make it to year five.
11. 34.7% of new establishments survive ten years
BLS data show that 34.7% of establishments that opened in the year ending March 2015 were still operating in March 2025. Survival improves with age: of the 2015 cohort that was still open in 2024, 92.8% made it through another year.
| Years since opening | Share still operating (March 2025) |
|---|---|
| 1 year (opened 2024) | 77.9% |
| 5 years (opened 2020) | 51.4% |
| 10 years (opened 2015) | 34.7% |
Source: US Bureau of Labor Statistics, Business Employment Dynamics, establishment survival (cohorts ending March of each year).
Small business financing and challenges
12. 60% of small employer firms applied for financing in the past year
The Federal Reserve Banks’ 2026 Small Business Credit Survey: Report on Employer Firms (published March 3, 2026; 6,525 firms surveyed September to November 2025) found 60% of small employer firms applied for financing in the prior 12 months, and 38% applied for a loan, line of credit or merchant cash advance.
13. Only 42% of small business financing applicants received the full amount
According to the same Federal Reserve survey, 42% of applicants received the full amount of financing they sought, 36% received some or most, and 22% received nothing. Having clean financial records and a separate business bank account improves the odds.
14. 77% of small employers cite rising costs or tariff-related costs as a challenge
Rising costs of goods, services and wages were the most common financial challenge in the Federal Reserve’s 2026 survey, and more than four in ten firms cited tariff-related costs. In total, 77% of firms cited one or both. Firms were slightly more likely to report falling revenues than rising ones.
Small business technology and marketing statistics
15. 46% of small employer firms use AI
The Federal Reserve’s 2026 Small Business Credit Survey found 46% of small employer firms currently use AI, another 15% plan to start within 12 months, and 33% have no plans. If plans hold, more than six in ten small employers will be using AI by late 2026.
16. 97% of consumers read online reviews for local businesses
BrightLocal’s Local Consumer Review Survey 2026 found 97% of US consumers read reviews when choosing a local business, and 45% now also use ChatGPT or other AI tools for local recommendations. A complete Google Business Profile and a steady flow of reviews are among the cheapest marketing tools available to small firms.
17. E-commerce accounts for 17.1% of US retail sales
The US Census Bureau estimates that e-commerce made up 17.1% of US retail sales in Q2 2026, with online sales of $340.2 billion, up 12.2% year over year. Even small, local retailers increasingly need a way to sell online or take orders through their website.
What do these small business statistics mean for new founders?
Small businesses are the majority of the economy, but the odds are real: about one in five new establishments closes in year one and only about half reach year five. The firms that last tend to start with a clear plan, keep costs under control, separate business and personal finances, and build visibility online through a website and reviews.
Practical first steps: pick and check a name, then register it. See our guides on how to start a business and how to start an LLC. For taking payments in person and online, Square is a common low-cost option for small businesses. Then secure the matching domain and social handles with the namechk name checker.
How we compiled these statistics
We relied on official government data (the SBA Office of Advocacy’s 2026 FAQ, the US Census Bureau’s Business Formation Statistics and e-commerce reports, and the Bureau of Labor Statistics’ Business Employment Dynamics) plus the Federal Reserve Banks’ 2026 Small Business Credit Survey and BrightLocal’s 2026 consumer survey. All figures are as of October 2026; older statistics without a current source were removed.
FAQs
How many small businesses are in the US?
There are 36,207,130 small businesses in the United States, according to the SBA Office of Advocacy’s Frequently Asked Questions About Small Business 2026. Small businesses, defined as independent firms with fewer than 500 employees, make up 99.9% of all US businesses and employ 62.3 million people, or 45.9% of private-sector workers.
What percentage of small businesses fail in the first year?
About 22%. Bureau of Labor Statistics data show 77.9% of private-sector establishments that opened in the year ending March 2024 were still operating in March 2025. Over longer periods, 51.4% of establishments opened in 2020 survived five years and 34.7% of those opened in 2015 survived ten years.
How many new businesses are started each year?
Americans file roughly half a million business applications every month. The US Census Bureau counted 534,947 seasonally adjusted applications in September 2026. Only a fraction become employers: the Census Bureau projects 29,022 new businesses with payroll will form within a year from that month’s applications.
How much of the economy do small businesses make up?
Small businesses generate 43.5% of US GDP and pay 38.7% of private-sector payroll, according to the SBA Office of Advocacy’s 2026 FAQ. They employ 45.9% of private-sector workers and generate over 60% of net new jobs, which is why they are often called the backbone of the US economy.
How hard is it for small businesses to get funding?
The Federal Reserve’s 2026 Small Business Credit Survey found 60% of small employer firms applied for financing in the prior year, but only 42% of applicants received the full amount they sought and 22% received nothing. Rising costs and tariff-related costs were the most common financial challenges in 2025.
How many small businesses use AI?
According to the Federal Reserve’s 2026 Small Business Credit Survey of 6,525 employer firms, 46% of small businesses currently use AI, 15% plan to start within the next 12 months and 33% have no plans. The survey was fielded from September to November 2025, so adoption has likely risen further since then.
Sources
- SBA Office of Advocacy: Advocacy Releases Frequently Asked Questions About Small Businesses 2026 (February 3, 2026)
- SBA Office of Advocacy: Frequently Asked Questions About Small Business 2026
- US Census Bureau: Business Formation Statistics (October 14, 2026)
- US Bureau of Labor Statistics: Business Employment Dynamics, establishment survival table
- Federal Reserve Banks: 2026 Small Business Credit Survey, Report on Employer Firms (March 3, 2026)
- BrightLocal: Local Consumer Review Survey 2026
- US Census Bureau: Quarterly Retail E-Commerce Sales, Q2 2026
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