Small Business Statistics: Essential Insights for 2024

General Small Business Statistics

When it comes to running a business, even small ones make a difference. Here are a few facts to know about small business employment contributions.

• Small businesses make up a whopping 99.9% of all businesses in the U.S. (U.S. SBA)

• Over three-quarters of U.S. firms have less than 10 employees. (SBE Council)

• Between 1995 and 2021, small businesses accounted for over two-thirds of net jobs created, about 17.3 million. (U.S. SBA)

• Small businesses employ 6.1 million Americans, almost half of private sector employees. (U.S. SBA)

• 45% of the fastest-growing industries are in the healthcare fields. (U.S. Bureau of Labor Statistics)

• As of 2023, the average salary of a small business owner is $68,692 per year. (Payscale)

• The top reason small business owners go into business is to be their own boss. (Guidant)

Demographics

While most small business owners are still white and male, there is great progress in diversity. Check out a few statistics on how minority and women-owned businesses are increasing.

• About one in five businesses in 2020, 1.2 million, were minority-owned. (U.S. Census)

• Over 5 million firms in the U.S. are majority-owned by women of color. (NAWBO.org)

• By generation, Gen Xers make up the largest portion of small businesses owners make up the majority of small business owners (47.2%) in 2023. (Guidant)

• Over 80% of small business owners are making diversity, equity, and inclusion (DE&I) a priority. (BusinessWire)

• Black-owned businesses make up the majority of minority-owned businesses (5.2%). (Guidant)

• 41% of small business owners in the U.S. are women. (NWBC.gov)

• About 9% of U.S. small businesses in 2021 were veteran-owned. (Score.org)

• Almost 50% of small business owners own or operate their business with their partner or spouse. (Bank of America)

Costs and Challenges

Working capital is a must-have for small businesses, leading many of them to apply for financing every year. Learn about more challenges firms face below.

• In the past five years, 66% of small firms used the owner’s personal savings or funding from family and friends. (Fed Small Business)

• Most commonly, firms reported challenges with rising costs of goods, services, and/or wages (81%). (Fed Small Business)

• Nearly a quarter of small businesses applied for loans through an online lender in 2021. (Fed Small Business)

• The top reason small business firms seek credit is to meet operating expenses. (FED Small Business)

• Cash flow problems are a major reason small businesses fail. (Small Biz Trends)

• Three-fifths of small businesses find attracting new customers difficult. (CPA Practice Advisor)

• 85% of small businesses experienced financial difficulties in 2021. (FED Small Business)

• In 2023, small business owners cited recruiting and retention (22%), inflation (22%), and lack of capital (14%) as their three biggest challenges. (Guidant)

• Over 90% of employer firms sought emergency assistance funding in 2021. (FED Small Business)

• Over 40% of businesses were temporarily closed because of the COVID-19 pandemic. (PNAS)

Success Rates

The costs of running a business may be intimidating, but isn’t a reason to give up. These next statistics reveal why some firms fail and give insight into those that don’t.

• Nearly 80% of small businesses survive the first year. (Zippia)

• The top leading industries in small business are retail and food/restaurants. (Guidant)

• Businesses in their second year have a 68.2% survival rate. (Zippia)

• 90% of e-commerce businesses fail within the first year. (Zippia)

• In this digital age of online search, businesses with a blog experience an astonishing 126% higher lead growth than those without one. (Zippia)

• 87% of business owners who have a mentor stay in business their first year, as opposed to the 75% of those that don’t. (Score.org)

• In 2022, 53% of business financing applicants were fully approved. (FED Small Business)

Emerging Trends for Small Businesses

As technology advances, so do the services of businesses. Below are must-know trends that contribute to small business productivity.

• The top three emerging technologies over the next decade for businesses are cybersecurity, 5G, and automation. (Bank of America)

• Four out of five small business owners plan to invest more in e-commerce to sell on TikTok. (Clarify Capital)

• 57% of small business owners took proactive steps to address future risks, including more digital sales, new technology, and diversified revenue streams. (Bank of America)

• More than 60% of small businesses fully or partially recovered from the pandemic. (Bank of America)

• In the past year, the top digital tools and strategies incorporated into small businesses were online banking, cashless payment diversity, and social media presence. (Bank of America)

• Three-fifths of small businesses using AI or automation for marketing boosted their work efficiency. (CPA Practice Advisor)

• Over 90% of small business owners are interested in selling products through TikTok.

Secure Funds for Your Small Business Goals

With the right strategies and financial support, your company will thrive. At Clarify Capital, we’ll work with you to find and secure the funding you need to meet your business goals. Learn below how important capital is for your business success and why you should apply for funding.