Small Business Statistics Of 2024

1. Almost all businesses across the U.S. are small businesses

While large corporations often grab headlines, it’s small businesses that form the bedrock of the American economy. Recent data from the U.S. Small Business Administration reveals a remarkable figure: 33.3 million businesses^[1] in the United States qualify as small businesses, making up 99.9% of all U.S. businesses. This number not only reflects the dominance of small enterprises in the business sector but also shows their significant role in generating employment and contributing to economic stability, a trend that remains relevant in 2024.

2. Nearly half of all U.S. employees are employed by a small business

The impact of small businesses on the U.S. job market is more significant than often perceived. Although a majority of small businesses, over 80%, operate without any staff, these entities still employ a total of 61.6 million people. This figure represents 45.9% of the entire U.S. workforce^[1], a remarkable statistic especially when considering that fewer than 20% of small businesses have any employees. This data not only shows the importance of small enterprises in job creation but also their role in sustaining the economy. It’s clear that the growth of small businesses is integral to the nation’s employment health and overall economic success.

3. Over eight out of 10 small businesses have no employees

Reflecting a significant trend in the U.S. small business sector, data reveals that a vast majority, over 80%, of small businesses are solo ventures. Out of the 33.3 million small businesses in the country, 27.1 million are managed solely by their owners and do not employ any additional personnel^[1]. This statistic sheds light on the significant number of individual entrepreneurs in the U.S. It demonstrates the independence and self-reliance characteristic of many small businesses, illustrating their unique role and contribution to the U.S. economy, even without a workforce.

4. Just 16% of small businesses have one to 19 employees

While the majority of small businesses in the U.S. operate without any employees, there is still a significant segment that does employ staff. Specifically, 16% of small businesses fall into the category of having between one and 19 employees. This equates to over 5.4 million businesses. On the larger end of the small business spectrum, only 647,921 businesses have a workforce size ranging from 20 to 499 employees^[1]. These figures give insight into the distribution of employee numbers within small businesses, showing a majority leaning towards minimal or no staff, with a smaller yet notable proportion employing a larger number of workers.

5. Small businesses have added over 12.9 million jobs in the last 25 years

Despite the average small business being operated by a solo founder, these enterprises have been a significant source of job creation in the U.S. In the past 25 years, small businesses have been responsible for generating nearly 13 million net new jobs^[1]. This accounts for approximately two-thirds of all new jobs added to the economy during this period. This trend emphasizes the enduring role of small businesses in bolstering employment, even as business continues to evolve. As we look toward the future, the continued contribution of small businesses to job creation remains a vital aspect of economic growth and resilience.

6. The leisure and hospitality industry has the highest average of jobs added per month over the last year

In the wake of the pandemic’s impact, the job market has shown remarkable resilience, especially in certain sectors. While the professional and business services industries have been significant contributors to job growth, adding over 1 million new jobs in the last 12 months, it’s the leisure and hospitality industry that stands out for its recovery pace. This sector has demonstrated the highest average monthly job growth, adding an average of 52,000 jobs per month over the last year^[2]. This surge in job creation reflects not only a rebound from the severe impacts of the pandemic but also the sector’s critical role in the broader economic recovery. Overall, the labor market has seen an increase of 5.8 million jobs since last year, surpassing its February 2020 level by 240,000 jobs, signaling a strong recovery trajectory.

7. The industry with the most job openings is the professional and business services industry

The professional and business services industry now leads in job openings^[2], a shift from the previous trend where education and health services were more in demand. This change signals a strong need for skilled workers in areas such as management, administration and consulting. Job seekers exploring opportunities in this field may find promising prospects for stable employment. For businesses operating in these sectors, the surge in job openings presents challenges in attracting and maintaining a skilled workforce, reflecting the dynamic nature of job markets and the evolving needs of industries.

8. The industry with the highest projected job growth is home health and personal care

While the professional and business services industry currently leads in job openings, the home health and personal care sector is projected to experience the most significant job growth. An estimated increase of 22%, translating to over 804,000 new jobs^[2], is expected in the next decade. This surge in demand can be attributed to factors such as an aging population, which necessitates more in-home healthcare services. The trend towards personalized and patient-centric care models also plays a role, as does the increasing preference for in-home care over institutional settings.

While the professional and business services industry currently has the highest number of job openings, the home health and personal care industry is expected to see the highest growth. Over the next decade, it is estimated to see an increase at the astronomical rate of 22% and add a over 804,000 jobs.^[2]This reveals projected growth within the home health and personal care industries, which is slated to increase in demand given the fact that the aging population is growing disproportionately larger than the younger generations.

9. The leisure and hospitality industry is still recovering from Covid-19

The Leisure and Hospitality industry, which experienced significant job losses due to the Covid-19 pandemic, is on a path to recovery. While the industry faced a shortfall of 633,000 jobs since February 2020^[2], recent trends show positive momentum. In 2023, the industry has been adding an average of 41,000 jobs per month. This is a decrease from the 2022 average of 88,000 jobs per month, yet it represents continued progress. Despite these gains, employment in leisure and hospitality remains 223,000 jobs below its pre-pandemic level as of February 2020. The industry’s recovery, spurred by resumed travel and increased demand for leisure activities, is still unfolding as it works to regain its pre-pandemic strength.

10. Nevada and D.C. have the highest unemployment rates in the nation

Recent data places Nevada at the forefront in terms of unemployment rates in the United States, with a rate of 5.4%^[2]. Following closely is the District of Columbia, recording a 5% unemployment rate^[2]. These figures suggest particular economic challenges or labor market conditions unique to these regions. Nevada, known for its tourism-centric economy, particularly in areas such as Las Vegas, may reflect the lingering impacts of the pandemic on the hospitality and entertainment sectors. Similarly, D.C.’s rate could be influenced by its distinct urban and political dynamics.

Conversely, Maryland showcases the nation’s lowest unemployment rate at just 1.7%^[2]. This could be attributed to the state’s diverse economy, which includes sectors such as bioscience, manufacturing and cybersecurity, coupled with its proximity to the federal government’s numerous agencies providing a stable employment base. Maryland’s low unemployment rate indicates strong job market health and potentially effective economic policies at play.

According to the most recent data, Nevada has the highest unemployment rate in the country at 5.4%. Right behind it is the District of Columbia at 5%^[2]. Meanwhile, on the other end of the spectrum, Marylandhas the lowest unemployment rate at just 1.7%^[2].

11. New Jersey had the largest increase in unemployment over the last year

Over the last year, New Jersey has seen the most substantial rise in unemployment rates, with an uptick of 1.3%^[2]. This change points to specific economic shifts or challenges within the state. On a different note, Maryland experienced the most significant reduction in unemployment, with a decrease of 1.5%^[2]. This could be linked to its varied economic strengths, contributing to a more stable job market.

12. The number of U.S. jobs will increase by 87,000 in 2024

In 2024, the U.S. job market is projected to witness an increase, though modest, in the number of jobs. Specifically, employment across the United States is anticipated to grow by 87,000. To put this in perspective, considering the 9.6 million jobs lost due to the Covid-19 pandemic between May 2020 and September 2022^[2], this increase represents a small step towards recovery. It’s a noticeable shift from the 2.72 million jobs added in 2023^[3], indicating a slower pace of job market recovery in 2024. This suggests that while there is progress in regaining the jobs lost during the pandemic, the journey towards a full recovery is gradual and ongoing.

Over the next year, the number of jobs in the U.S. is expected to increase by 87,000. Granted, this is following immense job loss due to the pandemic. According to data from the Bureau of Labor Statistics,^[2] 9.6 million jobs were lost in the U.S. due to covid between May 2020 and September 2022. In other words, the projected job growth for 2023 remains just a fraction of what was lost during the pandemic. This indicates that while the nation is in recovery, it still has a long way to go.

13. By 2032, the number of U.S. jobs is projected to increase by 4.7 million

By 2032, the U.S. job market is expected to see an increase in employment, with a projected addition of 4.7 million jobs^[2]. This expansion will bring total employment to an estimated 169.1 million. However, this growth, with an annual rate of just 0.03%, marks a significant slowdown compared to the previous decade's annual growth rate of 1.2% from 2012 to 2022^[2]. This slower pace of growth indicates a lengthy recovery period from the job losses incurred during the Covid-19 pandemic. Despite the increase in total jobs, by 2032, the U.S. will still be recovering from the pandemic's impact, as the growth falls short of fully compensating for the 9.6 million jobs lost during that period.

14. The fastest-growing industries are healthcare and social assistance

Not only do the healthcare and social assistance industries have the highest survival rate across all industries, but it also boasts the fastest growing industry.^[2]. This growth is driven by increasing demand for health services due to an aging population and a broader recognition of the importance of mental health and social support services. Advances in medical technology and healthcare delivery, including the rise of telehealth and personalized medicine, further fuel this expansion. Additionally, the sector's resilience to economic fluctuations and its capacity to innovate in response to societal health challenges contribute to its rapid growth. With an ever-growing focus on health and well-being in society, these industries are expected to continue their upward trajectory, meeting essential needs and creating numerous job opportunities.

15. The industry that will add the most jobs is individual and family services

The individual and family services industry has the highest projected growth as it is estimated to add over one million jobs between 2019 and 2029.^[2] The industry that is slated to have the second highest job growth in the nation is computer systems and design which is projected to add over 574,000 jobs in the next 10 years.

The individual and family services industry, with its projection to add over 1 million jobs between 2019 and 2029^[2], reflects a growing societal emphasis on social welfare and mental health services. This surge in job creation is likely driven by increased public awareness and acceptance of mental health issues, alongside a growing aging population requiring more in-home and community-based services. The expansion of this industry signifies a shift towards prioritizing individual and family well-being in policy and practice.

In parallel, the computer systems and design industry, projected to add over 574,000 jobs in the next decade^[2], mirrors the ongoing digital transformation across all sectors. The increasing reliance on technology in everyday life and business operations has spurred demand for professionals skilled in these areas. This trend highlights the critical role of technology and digital innovation in driving economic growth and job creation in the modern economy.

16. The average salary of a small business owner is just 16% above the annual mean wage in the U.S.

Business owners and entrepreneurs may make up some of the wealthiest people in the world; however, the average small business owner salary is just 16% above the national average mean wage of $59,428^[5]at $69,119^[6]. Of course, the salary of the average business owner varies greatly. On the low end, small business owners earn an average salary of $32,000 and earn as much as $147,000 on the average high end, according to pay rate data from Payscale.

17. Hourly earnings have increased more than 4% over the last year

Over the past year, there has been a 4.6% increase in hourly earnings, which is notably higher than the current annual inflation rate of 3.2%^[2]. This disparity indicates that the average wage growth has not only kept pace with but exceeded the rate of inflation. This trend suggests that, on average, employees have experienced an increase in real purchasing power, an encouraging sign amidst broader economic challenges. However, it's important to consider that these figures are averages and may not reflect the experiences of all workers, especially in industries where wage growth has been uneven. The context of these increases amidst global economic shifts and post-pandemic recovery efforts highlights the complex interplay between wages, inflation and overall economic health.

Over the year, hourly earnings have increased by 4.6%. Meanwhile, the annual inflation rate in the U.S. over the past 12 months is 3.2%, meaning that the increase in annual earnings was proportionate to the rising inflation rate.

18. Millennials own just 13% of small businesses in the U.S.

Despite that the Millennial generation is considered to be highly entrepreneurial, Millennials own just 13% of small businesses. Meanwhile, the vast majority of small businesses are owned by Boomers and Gen X, illustrating “the generation gap”^[7] in business ownership. Granted, the average age to start a business is reportedly 35 years old, so the younger generation may simply need a bit more time for the reality to catch up to their desire to own a business.

19. More small businesses are owned by males than females

While males still own a majority of small businesses, the increasing percentage of female-owned businesses, currently at 43.4%^[1], shows a positive shift towards greater gender equality in entrepreneurship. This change reflects broader societal movements towards inclusivity and the breaking down of traditional barriers in the business world. The rise in female entrepreneurship is supported by a growing number of resources and networks dedicated to supporting women in business.

Similarly, the ownership of small businesses by racial minorities and veterans, although comparatively lower, is a significant aspect of the diverse entrepreneurial ventures in the U.S. The 20.4% of small businesses owned by racial minorities and the 14.5% owned by Hispanics highlight the contributions of diverse cultural perspectives to the economy^[1]. Veteran-owned businesses, at 6.1%^[1], also play a unique role, often drawing on the skills and experiences gained during military service to drive business success.

Though the gap is narrowing, females only own 43.4% of small businesses. Racial minorities own 20.4% of small businesses—of which Hispanics own 14.5%. Veterans are one of the least represented groups, owning just 6.1% of small businesses in the U.S.^[1]

20. Nearly one out of three businesses still don’t have a website

In an increasingly digital age where websites are becoming easier—and more affordable—than ever to build and maintain thanks to code-free website builders and immense online resources, still, only 71% of businesses have a website^[8]. Of the nearly one-third favoring website-free, 20% say they use social media in lieu of creating a website. That doesn’t mean that is a widely advisable move, however, as millions look to Google to discover businesses for anything from deciding where to grab dinner to buying an automobile.

21. Over 25% of business is conducted online

Still not sure if a business website is really quite necessary? As of 2023, there were 2.64 billion e-commerce shoppers^[3]. This equated to over a quarter of all business being conducted online^[9]. As the pandemic limited the movement of people, more consumers resorted to the web to shop. And not just for things such as clothes and shoes, but groceries, alcohol, prescription medications, counseling and more.

22. Over three-quarters of shoppers visit a business’s website before its physical location

Just because a business operates in-person doesn’t mean brick-and-mortars don’t need a website. In fact, 76%^[10]of online shoppers reportedly check a business’s website before visiting their physical store or location. As surprising as this may initially be, the reality is that the web has become consumers’ first stop. And this is good news for brick-and-mortar businesses because it means that you don’t have to depend solely on foot traffic or word of mouth to get customers or clients through your doors.

23. Labor remains the number one cost for businesses at 70% of spending

For most businesses, the biggest cost is labor. It makes up 70% of a business’s spending^[11], taking up a large piece of the pie. For this reason, it’s not surprising then that one of the first areas a business looks to save money on is labor costs, whether that’s through layoffs, outsourcing to more affordable staff overseas or employing software that helps reduce the number of hands on deck a business needs to operate.

24. Inventory is the second biggest cost for small businesses

On average, the next biggest cost behind labor for businesses is inventory, which makes up an average of 25% to 35% of a business’s budget^[12]. Though inventory should equate to revenue down the line, it does represent a large upfront cost for small businesses that may be on a tight budget. For this reason, the popularity of dropshipping continues to grow, as do smaller minimum quantity orders to help reduce the upfront investment and the space required for storage—never mind the chances of damage or inventory spoiling.

25. Marketing accounts for just 9% of a business’s revenue on average

It’s common to hear of astronomical advertising budgets and campaign spending, and yet advertising makes up just 1% of the average business’s revenue^[13]. One of the most popular advertising channels, with 83%^[3]of businesses using it, is now social media. This is likely due to the value of a pay-per-click-based ad platform where advertisers only pay when users interact with their ad, the ease of use across said platforms and the sheer accessibility they offer to businesses of all sizes and budgets.

26. Small Business Spending Adjustments in Response to 3% Inflation Rise

As the economic environment continues to evolve, small businesses face the challenge of adapting to inflationary pressures. According to the CPI inflation calculator^[2], $1 in November 2022 is equivalent to $1.03 in November 2023, indicating a noticeable rise in costs over the year. This increase affects various aspects of running a business, from payroll and material costs to utilities and property taxes.

In response to these growing expenses, many small businesses have been reevaluating and adjusting their spending strategies. While specific data from 2022 showed that over half of small businesses cut costs, the trend likely persists as businesses seek innovative ways to maintain financial stability. This includes adopting remote work models to reduce office expenses, seeking more cost-effective manufacturing or supply options and leveraging technology such as artificial intelligence to boost productivity and reduce operational downtime. These measures reflect not just a reaction to the immediate challenges of inflation but also a strategic shift towards greater operational efficiency and resilience in a fluctuating economic climate.

27. Over 180,000 more small businesses opened than closed in the last year

From March 2021 to March 2022, approximately 1.4 million new small businesses opened, according to data from the U.S. Small Business Administration (SBA)^[1]. That is 447,519 more small businesses that opened within this timeframe than closed. This increase shows positive growth towards business ownership, and the shift towards entrepreneurship following the pandemic and tremendous job loss.

28. One in five businesses fail within the first year

Chances are you’re familiar with the statistic that half of all businesses fail. However, this only paints a partial picture. To get the complete picture, it should be noted that 20% of businesses fail in the first year, 30% in the second year and 50% by year five^[15]. This illustrates how pivotal the first five years of business are for new ventures.

29. Businesses are most likely to fail from running out of capital

A significant factor in the failure of new businesses is financial challenges. Data shows that 38% of businesses fail due to exhausting their cash reserves or the inability to secure additional capital. This points to the essential role of financial management in the survival and growth of startups and young companies.

In comparison, 42% of businesses that close within the first five years do so because of inadequate market demand^[16]. However, the issue of capital is not merely about having funds; it's about managing these resources effectively to reach and engage the target market. For entrepreneurs, this means balancing the act of capturing market demand with maintaining robust financial health to ensure long-term business sustainability.

30. Lack of market need is the second most common reason small businesses fail

Following closely behind financial challenges, the second most common reason for small business failure is insufficient market demand, accounting for a significant portion of closures. While 38% of small businesses struggle due to running out of capital^[16], the lack of market need presents an equally pressing challenge. For a small business to be successful, it's imperative not only to have adequate capital to sustain operations in the early stages but also to ensure there is a consistent and growing demand for its products or services.

31. The construction industry has the highest failure rate

When examining failure rates by industry, the construction sector stands out with the highest rate of business failures, at 25% in the first year^[17]. This high failure rate in construction may stem from various factors inherent to the industry, such as the complexity of projects, fluctuating material costs and the need for skilled labor. Additionally, the industry's sensitivity to economic cycles and changes in real estate demand can add to the challenges faced by new businesses. These dynamics illustrate the unique pressures within the construction sector, requiring businesses to navigate a range of operational and financial challenges from the outset.

32. The industries with the highest survival rate are healthcare and social assistance

Contrasting with other sectors, businesses in the healthcare and social assistance industries show remarkable resilience, boasting the highest survival rates^[17]. This durability can be attributed to factors such as consistent demand for health and social services, regardless of economic fluctuations. The essential nature of services provided, ranging from medical care to social work, ensures a steady need, contributing to the longevity of businesses in this sector. Additionally, advancements in medical technology and an increasing focus on health and well-being across populations further support the growth and sustainability of these industries. The healthcare and social assistance sector's ability to adapt to changing demographics and health needs plays a significant role in its stability and enduring success.

On the other end of the spectrum, the healthcare and social assistance industries have the highest survival rates.^[17]

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Small businesses can glean a lot of insight by looking at business statistics. Not only does data help provide intel on the general business climate—the one in which all businesses operate within, but statistics can also be leveraged to enable businesses to better plan for the future based on the direction in which the data is pointing to. Of course, while every business will potentially interpret and apply the data differently, this is exactly what can help give one small business a leg up on those that do not.

To compile our list of the top small business statistics of 2024, we went directly to the information powerhouses, such as the Bureau of Labor Statistics and the United States Small Business Administration (SBA) to acquire and analyze available data. We considered the source quality, relevance and timeliness of the data to present, compare, contrast and overlay data to create more useful insights for small businesses.

Visit our hub to view more statistics pages.

1. U.S. Small Business Administration Office of Advocacy
2. Bureau of Labor Statistics (BLS)
3. Statista
4. Forbes Advisor
5. Payscale
6. Guidant Financial
7. Bloomberg
8. Zippia
9. IBISWorld
10. Oberlo
11. Visual Objects
12. Paycor
13. UpKeep
14. Hubspot
15. Fundera
16. CBInsights
17. Freshbooks