13 Small Business Statistics & Facts (2024)

This is in-depth research about small business statistics.

In this research, you’re going to find:

How many small businesses are there in the world?
What is the impact of small businesses on the global economy?
What percentage of small businesses fail
How COVID-19 crisis affected the small businesses in the US?
What is the age of people who start small businesses?
How many small businesses have a website
And so much more…

Let’s get right into it.

Contents

Small Business Statistics Summary

Here’s a summary of the small business statistics you may find interesting:

There are currently approximately 400 million small businesses in the world
There are 32.5 million small businesses in the US, which account for 99.9% of all US businesses.
Small businesses account for around 90% of global companies and 50% of jobs worldwide.
Small companies create 1.5 million jobs annually and account for 64% of new jobs created in the US.
More than 20% of small businesses fail in the very first year, and nearly 50% of small businesses fail within the first five years.
42% of small businesses fail because of a lack of market demand.
61% of small business owners say that they were opening their own business because they wanted to be their own boss.
COVID-19 has rendered 31% of small businesses in the US non-operational.
60% of people who start small businesses are between the ages of 40 and 60
Only 22.5% of small businesses close during their first year
69.7% of business owners start their small business from scratch.
Retail and business services are the most popular small business industries with 13% of the total share
About 82% of small businesses earn more than $100,000 in revenue in the US
Only 64% of small businesses have their own website

Small Business Statistics

1. How Many Small Businesses Are There Worldwide?

There are currently approximately 400 million small businesses in the world.

Though it’s difficult to know precisely how many small businesses there are worldwide right now, Global Naps estimates sit around 400 million, with new businesses joining every day.

2. What Is The Impact Of Small Businesses On The Global Economy?

Small businesses account for around 90% of global companies and 50% of jobs worldwide.

According to the World Bank, small and medium businesses play a significant role in our economy, accounting for around 90% of businesses and 50% of jobs worldwide.

The World Bank also notes small businesses are less likely to obtain loans than large firms, and often rely on internal funds, cash from family, and personal savings to fund their companies

3. How Many Small Businesses Are There in the US?

There are 32.5 million small businesses in the US, which account for 99.9% of all US businesses.

In 2021, the number of small businesses in the US reached 32.5 million.

The Small Business Administration (SBA) defines a small business as a firm that has fewer than 500 employees.

The increase in the number of small businesses in the US in 2021 is representative of the sustained growth as it marks a 2.5% increase from the previous year and a growth of 9.8% over the four-year period from 2017 to 2021.

4. How Many Jobs in the US Are Created by Small Businesses?

Small companies create 1.5 million jobs annually and account for 64% of new jobs created in the US.

According to the Small Business Administration, small companies create 1.5 million jobs annually and account for 64% of new jobs created in the United States.

Small businesses, representing roughly 95% of all U.S. companies, are certainly important to the nation’s economic growth, providing employment for roughly half of U.S. employees.

5. What Is the Most Common Reason for Opening Your Own Business?

61% of small business owners say that they were opening their own business because they wanted to be their own boss.

According to Guidant Financial, among the most common motivations, 61% of respondents said that they were opening their own business because they wanted to be their own boss.

Other common reasons include wanting to pursue one’s own passions (31%), a presented opportunity (21%), or because they were newly unemployed (23%).

6. What Percentage of Small Businesses Fail?

More than 20% of small businesses fail in the very first year, and nearly 50% of small businesses fail within the first five years.

The percentage of businesses that fail increases to 31.2% in the second year and 38.8% in the third year. By the fifth year in 2021, the new business failure rate reaches 49.7%.

Looking at it on a year-to-year basis, the average annual rate of business failure from 2017 to 2021 for companies started in 2016 stands at 12.72%.

7. What Is the Primary Reason That New Businesses Fail?

42% of small businesses fail because of a lack of market demand.

The next most likely reason that new businesses fail is that they run out of cash.

Statistics show that 29% of new businesses reportedly failed because of a lack of finance.

Other causes for the failure of startups include not being able to find the right team to work with, getting outcompeted by competitors in the industry, cost-related issues, and an unfriendly product.

8. How COVID-19 Crisis Affected the Small Businesses in the US?

COVID-19 has rendered 31% of small businesses in the US non-operational.

According to the latest Facebook small business statistics, nearly one-third (31%) of small businesses in the US during the COVID-19 were not operational.

More than 60% of these small businesses that closed were due to government or health authority orders, as large parts of the country went into lockdown in a bid to curb the spread of the virus.

9. What Is the Age of People Who Start Small Businesses?

60% of people who start small businesses are between the ages of 40 and 60.

This is data from the 2019 small business study made by Guidant Financial. The study, reported by Small Business News, was based on surveys of more than 2700 small entrepreneurs in the US.

Interestingly, of those surveyed, 4% were even older, being over the age of 70.

The bottom line is this – it’s never too late to start your own business.

10. How Many Small Businesses Close in the First Year?

Only 22.5% of small businesses close during their first year.

This is obviously a good thing since 22.5% is not that high.

According to Small Business News, only around half of all small companies, however, survive for at least five years.

And then the number becomes smaller, with only a third of those companies lasting for 10 years.

But don’t be discouraged. The fact remains that nearly 80% of small businesses survive the first year. The chances of you making it to the finish line the first time around then are high.

Once you’re done with your first year, all you need to do is to ensure that you make the good decisions that will make you part of that one-third of companies that last for ten years.

11. How do Small Business Owners Come to Own Their Business?

69.7% of business owners start their small business from scratch.

Sometimes, they were just lucky to be part of an entrepreneurial family.

When the parents pass on, they inherit the business. But that’s a meager 4.1% of small business owners, the United States Census Bureau said.

There are other small business owners, or 7.3%, who said their small businesses were a gift.

Over 21% said they purchased their small business.

12. What Is the Distribution of Small Business Revenue in the US?

About 82% of small businesses earn more than $100,000 in revenue in the US.

Only 1.7% of small businesses earn less than $10,000 per year. Those that earn $10,000 to $49,999 are at 7%, while those earning within the range of $50,000 to $99,999 are at 9%.

The point is this. Even if you become part of the 1.7% that earns less than $10,000, that’s still a lot of money. Add to that your newfound freedom and other perks as a small business owner.

13. How Many Small Businesses Have a Website?

Only 64% of small businesses have their own website.

This is weird, since 92% of business owners, including small business owners, believe that having their own website contributes effectively to their digital marketing strategy.

Almost half, or 47%, emphasize marketing in general as their top growth strategy.

Moving forward, though, small businesses should take advantage of the power of the Internet and come up with a website to reach as many people as possible.

References:

13 Very Interesting Small Business Statistics