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15+ Must-Know Small Business Statistics for 2022

Last updated 30th Nov 2022
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Who wouldn’t like to be their own boss?! The latest small business statistics show that the vast majority of small business firms in the USA are non-employer businesses. Most of them are just individuals who are tired of the corporate world and believe they can achieve much more if they pursue their own passions rather than follow someone else.

However, not everyone is suited to be a leader. As a matter of fact, half of the small businesses in the country fail in their first five years. Startups run out of cash, and not everyone is able to raise capital. Read on to discover valuable insights into small businesses and what it takes to run one.

Top 10 Small Business Statistics

  • There are 33.2 million small businesses operating in the USA.

  • There are 4.2 million small businesses in California.

  • 42.3% of small businesses in the USA are owned by women.

  • 4,594,752 small business firms provide professional, scientific, and technical services.

  • 25% of small businesses in the USA are run completely online.

  • 46.5% of all American small business owners are Gen Xers.

  • 88% of small business owners say they started their own firms.

  • Dissatisfaction with corporate America is the main reason why 60.9% of small business owners started their own firms.

  • Running out of money is the main reason why startups fail, according to 38% of small business owners with failed startups.

  • 92% of small business owners say they don’t regret starting their own business.

General US Small Business Statistics

There are 33.2 million small businesses operating in the USA.

According to the latest reports, 99.9% of all businesses in the USA fall in the small business category. Moreover, 46.4% of all US employees, or exactly 61.7 million workers, work in these small businesses. In the period between March 2020 and March 2021, one million new small businesses were started in the country, while another 833,458 were closed. As a result, small businesses added 8.7 million job openings but also lost 11.7 million at the same time, according to the most recent small business employment statistics.

(Advocacy SBA)

4,594,752 small business firms provide professional, scientific, and technical services.

The above figure indicates that the largest number of small businesses in the country provide such services. Furthermore, data reveals that 3,772,571 of these small businesses have no employees, 770,708 have up to 19 employees, and 51,473 have between 20 and 499 employees. The remaining small businesses in the USA are providing other services (3,554,298), construction (3,483,077), real estate (3,268,764), and transportation and warehousing (3,051,341). Small business facts reveal that more than half of all small business firms in the USA belong to one of these top five industries.

(Advocacy SBA)

There are 4.2 million small businesses in California.

Given that it’s the most populated state, it’s not surprising that California is also the state with the largest number of small businesses in the country. Texas ranks second with 3.1 million, closely followed by Florida, where 3 million small businesses are operating. Furthermore, local business statistics show that there are 2.3 million small businesses in New York, while Illinois and Georgia each have 1.2 million, and there are another 1.1 million small businesses in Pennsylvania. The number of small businesses for all the remaining states is under a million.

(Advocacy SBA)

42% of the currently operating small business firms in the USA went into business more than ten years ago.

Furthermore, the stats show that 19% of small businesses have been running for between five and ten years, 21% between two and five, and 18% have been in business for up to two years. Additionally, facts about small business entities also show that 7% of these firms were started or taken over because of the COVID-19 pandemic. Regarding their life-cycle stages, 13% of these businesses are currently at a start-up phase, while 44% are still growing. 36% of small businesses have reached maturity, 4% are in revival, and 3% are on the decline.

(Wolters Kluwer)

25% of small businesses in the USA are run completely online.

In contrast, 38% are run strictly as brick-and-mortar operations, while 37% of the businesses take a combined approach and run their business both online and are present physically. Stats on small businesses that are physically present also reveal that 92% of these firms only have one location, 8% have two or more locations, and just 3% of these businesses are franchised. Furthermore, 32% of the businesses that have more than two locations are present in multiple states. Finally, 17% of small businesses in the country report that they have international business dealings, with Canada, the UK, and Western Europe as the main regions they have expanded their business into.

(Wolters Kluwer)

3% of US small businesses have been a victim of a ransomware attack in 2021.

Small business ransomware statistics further reveal that 4% of small businesses in the country have been under a ransomware attack in 2020, while another 7% in the years before. Of those that have experienced such an attack, less than half, or 46%, say that they did not pay the ransom. Their cyber insurance policy covered the ransom costs for 27% of the businesses, while another 24% say that they paid the ransom themselves.

(Survey Monkey)

49.7% of the businesses started in 2016 failed by 2021.

The most recent small business failure statistics suggest that close to half of the businesses that get started in the USA fail within the first five years of operation. A closer look at the data from 2016 to 2021 indicates that more than one-fifth, or 20.4%, of new businesses failed by 2017, i.e., within one year of their operation. By 2018, their percentage increased to 31.2%, and by 2019 the failure rate reached 38.8%. In 2020, 45.5% of the businesses started in 2016 already had failed before reaching 49.7% in 2021.

(Shopify)

Small Business Owner Statistics

42.3% of small businesses in the USA are owned by women.

In absolute figures, women own 12,001,410 of the total number of small businesses in the country. Additionally, women account for 47.3% of the workers employed in small businesses in the USA. Furthermore, less than a third, or 9,709,323 of all US small businesses, are owned by Hispanics and racial minorities. More precisely, Hispanics own 4,228,625, Black Americans own 3,239,551, and Asian Americans own 2,651,835, as per the latest small business owner demographics.

(Advocacy SBA)

88% of small business owners say they started their own firms.

In comparison, only 6% say they purchased their business from a previous owner, 4% inherited it, and 2% joined a family business. Additionally, 42% of small business owners say they had their business idea when they were young, and another 33% had an idea that at least somewhat impact their business ventures.

(Wolters Kluwer)

46.5% of all American small business owners are Gen Xers.

What’s more, they are just one percentage point ahead of Baby Boomers who account for 45.5% of all US small business owners in the USA. Furthermore, small business ownership statistics reveal that 7% of small business owners are Millennials, while Gen Zers and Silent Generation Americans each account for 0.5% of the total number of small business owners in the USA.

(Guidant Financial)

Dissatisfaction with corporate America is the main reason why 60.9% of small business owners started their own firms.

The results of a recent survey also reveal that 47.6% of US small business owners felt ready to be their own boss, so they started their own businesses. New business statistics also show that 31% did it so they could pursue their passion, while 23.4% started a business because they were laid off. Finally, 22.7% of small business owners say they were not ready to retire, so they started their own business, and 21.4% did it because an opportunity presented itself.

(Guidant Financial)

Running out of money is the main reason why startups fail, according to 38% of small business owners with failed startups.

While more than a third of small business owners attribute their failure to being unable to raise capital, another 35% attribute it to the lack of market need. Statistics on small business failure also show that 20% of them say they got outcompeted, while 19% admit to having a flawed business model. Regulatory and legal challenges are also a common reason why small businesses fail, cited by 18% of businessmen with failed startups, while another 15% say their business failed because of pricing and cost issues.

(CB Insights)

92% of small business owners say they don’t regret starting their own business.

A recent survey found that most small business owners are happy with their decision to be their own boss, even though they work longer hours than most Americans. Small business stats reveal that more than 70% of small business owners work over 40 hours, while 19% work more than 60 hours every week. Additionally, 81% of small business owners say they work nights, and another 89% say they work weekends. What’s more, 86.3% of small business owners say they take a yearly salary of less than $100,000, which, considering the hours they put in, suggests that they are underpaid. In comparison, the median CEO salary in the USA is $158,000.

(Fundera)

42% of small business owners are concerned that their business may be a victim of a cyber attack.

Small business cybersecurity statistics show that American small business owners are not overly concerned with cybersecurity, even though only 28% say they have a plan to respond if such an attack were to occur. Of those who show some level of concern, only 13% say they are very, while the remaining 29% say they are only somewhat concerned. Additionally, 42% say they have no response plan if their business went under a cyber attack, while 14% say their plan is currently in development. Despite the low percentage of small businesses in the US with a response plan, 56% of small business owners are somewhat or very confident in their ability to quickly resolve a cyber attack.

(Survey Monkey)

77% of the small businesses in the US report experiencing the negative effects of the COVID-19 pandemic.

Data reveals that 63% of small businesses report having their revenues decreased, while 43% report a reduced number of employees since 2019. In addition, 59% of small businesses describe their current financial situation as poor or fair. This percentage jumps to 66% for businesses that employ up to four people, 75% for businesses in the leisure and hospitality sector, and 81% when it comes to businesses run by Hispanic owners.

(Fed Small Business)

Small Business Data FAQ

How many small businesses are there in the US?

According to the most recent data, the number of small businesses in the USA in 2022 is 33.2 million, accounting for 99.9% of businesses in the country.

(Advocacy SBA)

How many jobs do small businesses create?

At the moment, 61.7 million workers, or 46.4% of the entire US workforce, are hired by small businesses.

(Advocacy SBA)

Do small businesses have a high success rate?

The recent success rate of small businesses in the USA suggests that one out of five small businesses closes within a year, and nearly half of them close within a period of five years since going into business.

(Shopify)

The Summary

As appealing as it sounds, being your own boss isn’t the smooth sailing one might imagine at first. Besides the obvious perks and responsibilities, starting a business means facing risks one cannot foresee. The COVID-19 pandemic caught many businesses off guard, and many business owners still don’t realize the dangers of ransomware and cyber attacks. Either way, small business statistics reveal that these types of ventures remain a driving force of the US economy, employing nearly half of the country’s workforce.

Sources:

Hristina Nikolovska

Hristina Nikolovska

An internship in a digital marketing agency during her freshman year of university got Tina into content. A decade later, she’s utilizing her educational background in English and knack for research to craft website content on crypto and ensure readers are fully informed. When she’s not investigating the crypto market and expanding her knowledge, you’ll find her randomly roaming cities and sunny coasts all over the world.