Chapter 1General small business statistics
A small business is any company that has less than 500 employees. To provide background information on how important small businesses are to the economy and how they drive industry growth, we’ve compiled general small business stats to cover the basics of what you need to know.
99.9% of U.S. businesses are small businesses.
There are 31.7 million small businesses in the U.S.
74% of Americans felt increased community responsibility to support local businesses during the 2020 holiday season.
97.5% of all firms who exported goods from the U.S. in 2018 were small businesses.
72% of Americans said they agree that it’s more important to support small businesses than to get the best deal while holiday shopping.
55% of small business owners said running their business is fulfilling.
Small businesses created 1.6 million jobs in 2019.
Small businesses created 65.1% of new jobs since 2000.
50% of small businesses use social media marketing.
60% of customers prefer to contact a local business by calling them on the phone.
Chapter 2Online small business statistics
Like any business, small businesses have to adapt to keep up with changing times. By offering shipping options and digital software, they are able to interact with customers and meet their needs effectively, no matter where they are.
Increasingly more consumers are using online shopping to get exactly what they’re looking for in an accessible way, which has resulted in immense growth among online small businesses, exhibited by the statistics below.
21% of American respondents said that not having a delivery option was a barrier to shopping at a small business.
53% of Americans said that they were likely to shop at a small business through an online marketplace like Etsy or eBay during the 2020 holiday season.
84% of small businesses use at least one major digital platform like social media to provide customers with information.
47% of small businesses are finding new ways to interact with customers.
51% of Americans surveyed said that they were more likely to spend at a small business if they offered online ordering.
95% of small business owners said that ease of use was important when evaluating new technology for their company.
29% of U.S. respondents reported that not having an online shopping or ordering option was a barrier to spending at small businesses.
79% of small businesses use digital tools in order to communicate with customers and suppliers.
32% of small business owners said they anticipate a more digital sales strategy in the future.
39% of small businesses reported that productivity software was a top technology budget priority for their business.
Chapter 3Small business revenue statistics
More and more small businesses open every year, which makes the competition steep. However, the increased support for small businesses in recent years has caused their revenue to grow and prosper. While small businesses were hit hard by the COVID-19 pandemic, entrepreneurs are hopeful as customer support for local and small businesses has grown in the past year, shown by the statistics below.
60% of small business owners expect increased revenue in the next year.
For every $100 a customer spends at a small business, $48 goes to the local economy.
43% of American consumers said they are willing to spend $20 more on a product to support a small or local business, as opposed to saving $20 and purchasing from a larger business.
50% of small business owners said that the national economy will improve in the next year.
The average small business owner makes $67,140 per year.
86.3% of small business owners said they have an annual salary less than $100,000.
86% of small businesses would need supplemental funding or to cut costs if revenue was lost for two months.
In 2018, 55% of small business owners said they didn’t seek financing for their business since cash flow was sufficient.
56% of small business owners reported that their local economy will improve in the next year.
14% of small business owners will use extra capital to pay down debt.
Chapter 4Small business growth statistics
Growth is an important aspect of the longevity of a business, but it’s much easier to encourage repeat customers to make a purchase than to engage new customers.
Since most small businesses struggle with longevity, it's important for them to keep their legacy in mind in order for sustainable growth. With millions of new business applications in the past year alone, the growth for small businesses is apparent in the following statistics.
Small businesses created 66% of new jobs from 2000 to 2017.
Of the top five small business industries, the food and restaurant industry is the largest at 12%.
The overall growth rate of the U.S. economy in 2019 was 2.3%.
46% of small businesses said they were successful in obtaining loans.
37% of Americans said they made more of an effort to shop at local businesses during the pandemic.
In 2020 alone, 4.3 million business applications were filed, which is up 24% from 2019.
28% of small businesses added work from home capabilities in response to the COVID-19 pandemic.
Small businesses experienced a 14% credit growth rate in 2020.
56% of small business owners have plans to increase business over the next five years.
13% of small businesses plan to incorporate new technology.
Chapter 5Small business cybersecurity statistics
As more businesses opt for an online format, cyberattacks have become an increasing phenomenon, where data breaches and internal attacks become the norm. Small businesses are just as likely to be victims of cybersecurity breaches, so investing in cybersecurity software and white hat hackers can help prevent future attacks.
These cybersecurity statistics for small businesses outline the biggest threats to sensitive information and who is behind them.
43% of cyberattacks targeted small businesses.
21% of cyberattacks occurred due to errors.
33% of small business cyberattacks were social attacks.
52% of small business data breaches were because of hacking.
34% of cyberattacks on small businesses involved internal offenders.
23% of the attacks involved government actors who took part in the breaches.
15% of the cyberattacks occurred because of misuse of authorized users.
22% of small businesses reported they suffered a security breach because of a remote worker.
69% of small business cyberattacks were the work of outsiders.
39% of the attacks came from organized criminal groups.
Chapter 6Small business lending statistics
Obtaining loans from the government or banks is one way that small businesses can afford upfront expenses. It can take a while for small businesses to make a profit, but thanks to ample lenders, they’re able to start off on the right track.
As the number of small businesses increases, so does the number of owners borrowing money from lenders. Keep reading to learn fast facts about small business lending.
75% of entrepreneurs said payroll and staffing needs were the top reasons they applied for loans.
3.3 million of the total 5.2 million PPP loans in 2020 have been forgiven as of May 24, 2021.
In 2020, the average amount for a small business loan was $71,072.
30% of microloans from the Small Business Association (SBA) went to startups in the 2020 fiscal year.
66% of small businesses were most satisfied with large banks as lenders.
$799 billion in Paycheck Protection Program (PPP) loans were approved by the SBA as of May 31, 2021.
42% of small businesses applied for a loan, line of credit or cash advance from a large bank in 2019.
Small businesses that applied for financing went from 43% in 2019 to 37% in 2020.
5 million of the 5.6 million PPP loans approved in 2021 went to businesses with 10 employees or less.
Small businesses that received all of the financing they applied for went from 51% in 2019 to 37% in 2020.
Chapter 7Small business employment statistics
Employees at small businesses are integral to the company’s success — without passionate and dedicated workers, small businesses wouldn’t be able to thrive. This year, entrepreneurs are looking for a myriad of qualities in their candidates like experience, enthusiasm and the ability to learn new skills.
On top of that, businesses are looking for employees to fill vacant positions given the enormous impact the pandemic has had on the workforce. Below, we’ve sourced informative statistics that serve as a testament to the need for hardworking employees at small businesses.
81% of small businesses have no employees.
1 in 5 business owners plan to hire over the next year.
46% of small business owners reported job openings that couldn't be filled in July 2021.
19% of small businesses have employees, as opposed to a singular owner who is self-employed.
47% of small business owners said they had difficulty finding qualified employee candidates.
23% of small business owners said the top characteristic they look for when hiring is creativity.
49% of small business entrepreneurs said the top characteristic they look for when hiring is work experience, while 46% said integrity.
Small businesses created 10.5 million new jobs from 2000 to 2019.
60.6 million workers are employed by small businesses.
43% of small business owners said they look for passion for work in the hiring process, while 38% look for the ability to learn new skills.
Chapter 8COVID-19 small business statistics
The pandemic had a major impact on small businesses, even causing many of them to close their doors for good. However, other small businesses in retail have entered the ring now that the landscape has changed dramatically with new customer needs like no-contact shopping and payment. Keep reading to learn about the impact the pandemic has had on small businesses.
38% of small businesses stayed open as essential businesses.
43% of small business owners have tried to hire since the pandemic began.
200,000 more businesses closed during the pandemic than the average yearly number of 600,000.
25% of small- and medium-sized businesses were closed as of December 2020.
56% of Americans said they increased how much they shopped at small and local businesses during the pandemic to help keep them in business.
33% of small- and medium-sized businesses expect it to take longer than six months to return to normal operations.
68% of small business owners used various sources of funding to help their business survive during COVID-19.
31% of small businesses that closed and reopened said they were able to do so because of customer support.
55% of small business entrepreneurs said they faced operational challenges during the pandemic.
25% of small business owners said that the pandemic changed the types of employee roles and skill sets needed for their business’s success.
Chapter 9Small business failure statistics
More small businesses fail in their first few years than consumers might think. In fact, most businesses fail during the first decade of operations. Increased support for small businesses from the public has helped many stay afloat in the past year, however, the competition is only increasing with the 4.3 million new business applications filed in 2020. Read below to learn about failure in the small business landscape.
The industry with the highest failure rate is information, where 25% of businesses fail within the first year.
20% of new businesses fail during their first two years of operation, 45% fail during the first five years and 65% fail during the first decade.
The state of Massachusetts has the lowest failure rate for small businesses.
25% of new businesses operate for 15 years or more.
The industry with the lowest failure rate is the agriculture, forestry, fishing and hunting industry, where 12% fail during the first year.
31% of survey respondents reported that small businesses have products that can be more expensive.
29% of American respondents reported that a smaller range of products and services at small businesses was a barrier to shopping there.
About 600,000 businesses in the U.S. close every year.
19% of U.S. respondents said that shopping at small businesses is less convenient than shopping at larger businesses.
37% of respondents said that the biggest barrier for shopping at small businesses was the lack of awareness about them because of little to no advertising.
Chapter 10Small business demographic statistics
More minorities and veterans have become small business owners in recent years and have ultimately created more representation. This in turn can inspire more young entrepreneurs to pursue their business dreams and become their own boss.
If you’re looking to learn more about who is behind small businesses and how they succeed, read the following demographic statistics.
45% of small business owners were part of a minority ethnic group.
33% of female business owners reported household responsibilities were affecting their ability to focus on work, compared to male business owners at 25%.
26% of Americans surveyed said there was a lack of small businesses around them.
There are 5.2 million self-employed minority people in the United States.
54% of Americans said they were likely to shop at a minority-owned small business during the 2020 holiday season.
The number of Black-owned businesses in the U.S. reached 124,551 in 2021.
Veterans owned, operated and controlled 379,620 small businesses in the U.S. in 2018.
43% of Hispanic small business owners obtained a high school diploma or GED.
51% of Hispanic small business owners said they opened their own business to be their own boss.
Chapter 11Additional facts and FAQs
More minorities and veterans have become small business owners in recent years and have ultimately created more representation. This in turn can inspire more young entrepreneurs to pursue their business dreams and become their own boss.
If you’re looking to learn more about who is behind small businesses and how they succeed, read the following demographic statistics.
Chapter 12Wrapping up: the future of small business
While starting a small business is not easy, many that stand the test of time are able to do so because of proper planning, accounting and passion for the business. Small businesses make up the vast majority of businesses in the country, and more new businesses are registered every day. The statistics we covered above are the fast facts of the plight of entrepreneurship, but many can testify that it is worth all the time and effort it takes to start a small business.
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