74+ Small Business Statistics For 2023 (Demographics & Trends)

Small Businesses are the backbone of the economy. Small and medium businesses provide 70% of global employment. 

According to Forbes, 99.9% of businesses in the United States are small, accounting for 33.2 million small businesses. 

If you want to start and run a small business, then here I have compiled complete insights into small business statistics. 

This article will discuss small businesses, such as the number of small businesses, demography, employees, finance, lawsuits, etc.  

Without wasting time, let’s get into it. 

Small Business Statistics (Top Picks)

Small businesses are a vital part of the economy. Here are some key statistics and trends regarding their growth and survival.

1. Globally, there are 400 million small businesses as of 2023.

2. There are 33.2 million small businesses in the United States as of 2023.

3. With 4.2 million small businesses, California has the maximum number of small businesses in the United States.

4. Only 25% of small businesses survive more than 15 years. 

5. 26% of small business owners plan to increase their staff in 2023. 

6. 54% of small business owners plan to increase their spending on social media.

7. 86.3% of small business owners earn less than $100,000 annually. 

8. 63% of small businesses are profitable. 

9. 12.9% of small business owners are millennials in the United States.

10. 36% to 53% of small businesses are sued every year.

11. Small business owners take an average of $633,000 in bank loans.  

12. Almost 50% of all employees in the United States are employed by small businesses. 

13. In the United States, small businesses generated around 13 million jobs in the past 25 years.

14. 14% of small businesses failed because they ignored their customers. 

15. 22% of small businesses said recruiting and retention is their top challenge while running a small business in 2023. 

Small Business Statistics (General)

16. Only 25% of small businesses survive more than 15 years. 

Here a table shows the survival rate of small businesses.

Number Of Years	Survival Rate
1	80%
5	55%
10	30%
15	25%

17. 29% of respondents said being ready to be their boss is their biggest motivation to start a small business.

Here a table shows the motivations behind starting a new small business. 

Motivation	Share Of Respondents
Ready to be their boss	29%
Dissatisfied with corporate in the U.S.	17%
They wanted to follow their passion	16%
Opportunity presented itself	12%
Inspiration for new business	9%
Not ready to retire	7%
Laid off/Job outsourced	7%

18. 26% of small business owners plan to increase their number of staff in 2023. 

Here a table shows the top plan of small business owners for 2023. 

Top Plan	Share Of Respondents
Increase Staff	26%
Expand or Remodel Business	18%
Invest in Digital Marketing	18%
Invest in Traditional Marketing	10%
Invest in Information Services Technology	7%
Invest in Accounting Services Technology	6%

19. The cost to start a business of 27.3% of small businesses was $250 to $500k. 

Here a table shows the cost of starting a small business in 2023. 

Cost	Share Of Respondents
$50K	3.7%
$50K to $175K	26.2%
$175K to $250K	14.2%
$250K to $500K	27.3%
$500K to $1 million	16.3%
More than $1 million	12.3%

20. 35% of small businesses started a new franchise.

Here a table shows the small business by business type. 

Business Type	Small Businesses
New Independent Business	21%
Bought Independent Business	33%
New Franchise	35%
Bought existing franchise	11%

21. 48% of small businesses feel the economy is going into a long-term recession. 

Here a table shows the responses of small businesses when they ask whether they feel the economy is going into a long-term recession.

Answer	Share Of Respondents
Yes	48%
No	19%
Unsure	33%

22. 65% of small businesses feel about investing in Artificial Intelligence.  

Source: Guidantfinancial.com, Zippia, 99Firms.

Number Of Small Business Statistics

According to the U.S. small business Administration, more than 33 million small businesses exist in the United States as of 2023. 

Here we will see all the necessary statistics about the number of Small Businesses. 

23. Globally, there are 400 million small businesses as of 2023. 

24. There are 33.2 million small businesses in the United States as of 2023. 

25. California has the maximum number of small businesses in the United States, with 4.2 million. 

Here a table shows the number of small businesses by State. 

States	Number Of Small Businesses
Alabama	396,432
Alaska	73,354
Arizona	571,495
Arkansas	249,907
California	4,203,260
Colorado	630,113
Connecticut	346,950
Delaware	82,121
D.C.	76,083
Florida	2,494,279
Georgia	1,051,071
Hawaii	132,640
Idaho	162,905
Illinois	1,233,572
Indiana	512,348
Lowa	270,484
Kansas	254,297
Kentucky	351,260
Louisiana	447,440
Maine	147,270
Maryland	594, 124
Massachusetts	669,224
Michigan	873,722
Minnesota	520,110
Mississippi	257,404
Missouri	532,277
Montana	120,246
Nebraska	176,358
Nevada	270,079
New Hemisphere	134,760
New Jersey	884,049
New Mexico	154,804
New York	2,168,799
North Carolina	913,398
North Dakota	73,142
Ohio	949,479
Oklahoma	350,718
Oregon	377,860
Pennsylvania	1,058,033
Rhode Island	101,516
South Carolina	418,031
South Dakota	86,550
Tennessee	603,310
Texas	2,679,964
Utah	287,803
Vermont	77,614
Virginia	745,886
Washington	608,956
West Virginia	113,410
Wisconsin	452,594
Wyoming	66,653

Source: 99Firm, Forbes.

Small Business And Social Media Statistics

According to Statista, 4.26 billion people are using social media. It is necessary for every business to promote its business on social media. 

Here we will see some interesting statistics about Small businesses and social media. 

26. 54% of small business owners plan to increase their spending on social media. 

27. 24.41% of small businesses depend on Social Media to drive revenue. 

28. 94% of small businesses post about their business daily on social media. 

Here a table shows the frequency of small businesses’ posting on social media. 

Frequency	Share Of Respondent
Daily	94%
Weekly	79%
Monthly	52%
Less frequently than monthly	65

Source: hostinger.com.

Small Business Finance Statistics

In the United States, 63% of small businesses are profitable and earning well from their business. It is essential to see the small business finance statistics before you start your business. 

Here we will see all these essential statistics of Small Business Finance. 

29. The average revenue of small businesses is $44,000 annually. 

30. 86.3% of small business owners earn less than $100,000 annually. 

31. 63% of small businesses are profitable. 

Here a table shows the profitability of the small business. 

Profitability	Small Businesses
Temporarily Closed	11%
Lost Revenue	23%
Profitable	63%

32. 13% of small businesses took an SBA loan to finance their business. 

Here a table shows the top business financing sources. 

Top Sources	Share Of Respondents
401(k) Business Financing/ROBs	52%
Cash	19%
SBA loans	13%
Term and Unsecured loans	4%
Line of Credit	3%

33. Small businesses create 44% of the United States’ economic activity (GDP). 

34. 9% of small businesses make more than $1 million.

35. 40% of small businesses have debts of more than $100,000. 

Source: Zippia, hostinger.com.

Small Business Owner Demography Statistics

Gen X and Baby Boomers dominate the small business market. Gen Z contributes only 1% of small businesses. 

Here we will see all about Small business owners’ Demography by age, gender, education, etc. 

36. 12.9% of small business owners are millennials in the United States.

37. Only 1% of small business owners are Gen Zs in the United States.

Here a table shows the small business owners by age group. 

Age Group	Share In Small Business
Gen Z	1%
Millennials	12.9%
Gen X	47.2%
Baby Boomers	39.6%
Post War	0.3%

38. 31% of small business owners have associate degrees. 

Here a table shows small business owners’ level of Education. 

Education Level	Share Of Small Business Owners
Associate Degree	31%
High School/GED	30%
Master’s Degree	18%
Bachelor’s Degree	17%
Doctorate	4%

39. 21.4% of small business owners are females.  

40. 1.2 million women-owned businesses employ over 11 million people.

41. Almost 20% of small business owners are from minority groups.

42. 21.7% of small business owners are immigrants. 

43. 4.8% of small businesses are owned by Asians in the United States. 

Here a table shows the percentage of business owners by ethnicity. 

Ethnicity	Percentage Of Small Business Owners
White	76.2%
Asian	4.8%
Hispanic	4.7%
African-American	5.2%
Other Minorities	0.5%

44. Veterans own 6.1% of small businesses.

45. 37% of small business owners are very happy with their businesses. 

Here a table shows how small business owners are happy with their businesses. 

How Happy They Are	Share Of Respondents
Very Unhappy	4%
Somewhat Unhappy	11%
Neutral	13%
Somewhat Happy	35%
Very Happy	37%

46. 42% of small business owners support the Republican Political Party. 

Here a table shows the small business owners by Political Party. 

Political Party	Share Of Respondents
Republican	42%
Democrat	19%
Libertarian	7%
Unaffiliated	32%

Source: Zippia, 99Firms, Luisazhou.com, Guidanatfinancial.com.

Small Business Lawsuit Statistics

Every year, 12 million lawsuits are filed against small businesses. Before starting a small business, it is essential to understand small business lawsuit statistics to avoid future problems. 

Here are all the essential statistics about small business lawsuits that everyone wants to know. 

47. 36% to 53% of small businesses are sued every year.

48. Around 45% of small businesses are going through litigation.

49.  90% of businesses faced a lawsuit at least once in their lifespan. 

50. There are 12 million lawsuits filed against small businesses every year.

51. More than 75% of small business owners are worried they will face a lawsuit.

52. Small businesses with 1 million in earnings have almost $20,000 in litigation fees. 

Source: thezebra.com.

Small Business Loan Default Statistics

4 out of 10 small businesses go to small business lenders for the loan. Many small businesses take loans to finance their business. 

Here are some of the essential statistics about small business loan default statistics. 

53. Small business owners take an average of $633,000 in bank loans. 

54. Only 26.9% of small businesses get loans from major financial institutions. 

55. 43% of small business owners go to small business lenders for loans.

56. Overall, the average debt amount is $107,000. 

Source: thezebra.com.

Small Business Employees Statistics

7 out of 10 employees are employed by small and medium-sized businesses worldwide. Small businesses are providing a large number of employees. 

Here we will see some of the most important statistics about small business employees. 

57. Almost 50% of all employees in the United States are employed by small businesses. 

58. Only 16.36% of small businesses in the United States have 1 to 19 employees. 

Here a table shows the small businesses by employee size. 

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

59. 81.63% of small businesses do not have any employees in the United States.

Here a table shows the small business by the percentage of employees. 

The Number Of Employees	Small Businesses
No Employees	81.63%
1 to 19 employees	16.36%
20 to 499 employees	1.95%

Source: Forbes.

Small Business Job Creation Statistics

For the last 25 years, small businesses have continuously created jobs and contributed significantly to the economy. 

This section will show all the essential statistics about small business job creation.

60. In the United States, small businesses generated around 13 million jobs in the past 25 years.

61. 2 out of 3  jobs are added to the economy of the United States by small businesses. 

62. The professional and business services industry generated more than 1.1 million new jobs last year. 

63. Education and Health Services has the most openings in the small business industry, with 34,725 jobs.  

Here a table shows the number of job openings across different industries. 

Industry	Number Of Job Openings
Education and Health Services	34,725
Professional and Business Services	19,295
Wholesale and Retail Trade	18,989
Manufacturing	14,718
Leisure and Hospitality	12,635
Construction	11,271
Financial Activities	10,725
Transportation and Utilities	9,377
Public Administration	7,410
Other Services	7,186
Information	2,721
Agriculture and Related	2,291
Mining, Quarrying, and Oil and Gas  Extraction	603

64. Only 14% of jobs will be recovered in 2023, which were lost during the COVID-19 Pandemic, and 87% can be recovered by 2030.

65. 159.6 million Americans will be employed in 2023.

Here a table shows the number of employed Americans from 2016 to 2023. 

Year	Number Of Employed Americans
2016	151.4 million
2017	153.3 million
2018	155.8 million
2019	157.5 million
2020	147.8 million
2021	152.6 million
2022	158.3 million
2023	159.6 million

66. It is needed to create 600 million jobs globally to support the global workforce by 2030.  

Source: Forbes, Luisazhou.com.

Small Business Success Statistics

Here are some of the most important statistics about small business successes that you need to see. 

67. Retail is the top industry in small business, with 18% of success. 

Here a table shows the most booming industries in small business. 

Industry	Share Of Respondents
Retail	18%
Food and Restaurants	12%
Health, Beauty, and Fitness Services	10%
Construction and Contracting	8%
Residential and Commercial Services	7%

Source: guidantfinancial.com.

Small Business Failure Statistics

While starting a new business, knowing about small business failure statistics is essential. You can learn from others’ mistakes and run your business successfully. 

Here I have compiled all the essential statistics about small business failure. 

68. Around 22% of small businesses close within a year.

Here a table shows the failure rate of small businesses by year. 

Years	Failure Rate
1	21.9%
2	31.8%
3	39.7%
4	45.7%
5	50%
6	53.6%
7	57.7%
8	61%
9	63.2%
10	65.7%%

69. 34.6% of small businesses remain open in 2022 which were opened in 2012. 

70. 14% of small businesses failed because they ignored their customers. 

Here a table shows the reasons for the failure of Small Businesses. 

Reasons	Share Of Small Businesses
Cash Flow Issue	82%
Lack of Demand	42%
Lack of Talent	23%
Lack of Business Model	17%
Ignored their Customers	14%
Poor Marketing	14%

71. 32.8% of small business owners said lack of capital is the reason to close their business. 

Here a table shows the factors because of why owners closed their small businesses. 

Reasons	Small Businesses
Lack of Capital	32.8%
Strong Competitors	19.6%
Unsustainable Growth Rate	18.75%
Lack of market Interest	17.5%
Lack of Personal Business knowledge	15.3%
Due to COVID-19 Pandemic	1%

Source: thezebra.com, Zippia, Hostinger.com.

Small Business Challenges Statistics

There are many challenges to small businesses. But here, I have compiled some of the common challenges that small businesses face. 

72. 22% of small businesses said recruiting and retention is their top challenge while running a small business in 2023. 

Here a table shows the top challenges for small businesses in 2023.

Top Challenges	Share Of Respondents
Recruiting and Retention	22%
Inflation and Price Increases	22%
Lack of Capital/Cash Flow	14%
Supply Chain Issues	11%
Marketing and Advertising	8%

73. 26% of small businesses say inflation was their most important problem one year before (2022) in the United States.

Here a table shows the fundamental problems small businesses had one year before (2022) in the United States.

The Most Important Problems	Share Of Respondents
Inflation	26%
Quality of Labor	22%
Taxes	15%
Cost of Labor	11%
Cost/Availability of Insurance	5%
Government Regulations	8%
Poor Sales	4%
Competition from large businesses	0%
Finance and Interest rates	0%
Others	9%

74. 28% of small businesses say inflation is their most important problem in the United States as of February 2023.

Here a table shows the essential problems small businesses have in the United States as of February 2023.

The Most Important Problems	Share Of Respondents
Inflation	28%
Quality of Labor	21%
Taxes	13%
Cost of Labor	12%
Cost/Availability of Insurance	5%
Government Regulations	5%
Poor Sales	4%
Competition from large businesses	4%
Finance and Interest rates	2%
Others	6%

Source: Guidantfinancial.com, Statista.

Related Read:

• Business Statistics
• Digital Marketing Statistics
• Email Marketing Statistics
• Affiliate Marketing Statistics
• LinkedIn Statistics

Conclusion: Small Business Statistics (2023)

As of 2023, there are 400 million small businesses worldwide. Small business culture is growing year by year. And creating huge employment across the world. 

In the United States, Small businesses created 13 million job opportunities in the last 25 years. 

Small businesses come with many problems and challenges. 20% of small businesses failed within one year. But, still, more than 60% of small businesses are profitable. 

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