Whether you’re an entrepreneur or just a curious reader, you’ll discover 49 of the most important statistics for small businesses in 2023.
- 80% of small businesses survive their first year
- Small business e-Commerce increases 37%
- Majority of small businesses expect remote and hybrid work to remain
General Small Business Statistics
33.2 Million Small Businesses in the U.S.
The U.S. Small Business Administration reports that there are over 33.2 million small businesses operating in the U.S. today.
This is approximately 800,000 new small businesses compared with a year earlier.
47% Growth in Small Businesses in the Last Decade
The number of small businesses operating in the U.S. has almost doubled in the past 10 years.
Up to 22% of Small Businesses in the U.S. Fail Within 1st Year
Between 20% and 22% of small businesses started in the U.S. fail within the first year. The good news with this statistic is that 80% of businesses manage to survive the first year.
5 Million New Small Businesses
There were 5 million new businesses created last year. This is a 7.4% decrease from a year earlier when a record 5.4 million businesses were started.
89% of Small Business Owners Work Weekends
Not only do small business owners frequently work weekends, but 8 out of 10 work nights; it’s not unusual for them to work 60+ hours a week.
Small Business Demographic Statistics
40% of Small Businesses in the U.S. Are Owned by Women
Between 38.7% and 43.1% of small businesses in the U.S. are owned by women. That’s a 21% increase over the last 5 years.
42% of New Small Businesses Are Owned by Women
4 out of every 10 new small businesses opened in the U.S. this year were by women.
Average American Small Business Owner Is 50.3 Years Old
Nearly 9 out of every 10 small businesses in the U.S. are owned by members of the Gen-X or Baby Boomer generations, which drives the average age up considerably.
Average Age of New Business Owners Is 34 Years Old
While the majority of small businesses are owned by the Gen-X and Baby Boomer generations, the majority of new businesses opened are by millennials. This is expected to continue as a trend into the future.
Small Business Marketing Statistics
Average Small Business in the U.S. Should Spend 8% on Marketing
Small businesses in the U.S. with revenue of less than $5 million are recommended to spend no more than 8% of revenue on marketing.
97% of Consumers Search Online for Local Businesses
With nearly all consumers using Search to find local businesses, it’s vital for small businesses to maintain a strong online presence.
Over 80% of Consumers Check Online Reviews Before Visiting a Small Business
Between 82% and 90% of consumers admit that they always read online reviews from other consumers before choosing to visit a small business in person or online.
64% of Small Business Use Email Marketing
Despite email marketing being the most effective form of marketing by a number of metrics, it is only the second most popular marketing method small businesses use.
Social Media Marketing Is the Most Popular Form of Marketing
Following on from the last statistic, social media marketing is used by 77% of small businesses, making it the preferred means of marketing.
Small Business Finance Statistics
20% of Small Business Customers Generate 80% of Revenue
Cultivating customer loyalty is critical to the success of small businesses since on average, 80% of generated revenue comes from the 20% most loyal customers.
Online Sales Have Increased Post-Pandemic
The percentage of revenue generated by online sales has increased almost everywhere. U.S. small businesses have had a modest 2% increase since the pandemic began, whereas the U.K. received a 6% boost.
U.S. Government Grants $162.9 Billion of Funding to Small Businesses
The last year saw the U.S. government meet its contracting goal of awarding 23% of federal contract dollars to small businesses, with an all-time high of 26.5%.
$28.1 Billion for Women-Owned Small Businesses
This is an increase from the $26.2 billion awarded last year, but still slightly under the 5% target set by the current administration.
Small Business Employment & Wealth Creation Statistics
64% of New Jobs Created Are from Small Businesses
The biggest companies often grab the headlines for the number of jobs they provide, yet it may surprise you to learn that the majority of jobs created in the U.S. each year are from small businesses.
Small Businesses Contribute 44% to U.S. Economic Activity
Although the percentage contributed has fallen from the 48% seen in the late 1990s and early 2000s, small business gross domestic product (GDP) has grown an average of 1.4% annually. Large business GDP has grown faster at 2.5% annually.
59% of Small Businesses Offer Remote Work Options
Post-pandemic in the U.S., nearly 60% of small businesses (50 employees or less) have kept or modified remote and flexible work options.
Up to 62% of Small Business Employees Are Satisfied with Their Work
Different sources report that between 51% and 62% of small business employees are currently satisfied with their work. This is a 2.1% improvement over last year.
98% of U.S. Exporters Are Small & Medium-Sized Businesses
Small businesses (along with medium-sized businesses) make up close to all of the U.S. exports industry, with just 2% attributable to big business.
58% Have “Wellness Programs”
Ensuring your employees are happy and healthy is a good way of reducing costs, with some studies showing businesses can save approximately $3 for every $1 spent on wellness programs. Perhaps that’s why 58% of small businesses in the U.S. already have wellness programs in place.
Small Businesses in the U.S. Hire 500,000 Million People
Last year, an extra 500,000 people found employment with small businesses in the U.S., bringing the total up by 0.82% to 61.7 million people.
46.4% of the U.S. Workforce Is Employed by Small Businesses
While small businesses account for much of the economic output of the U.S., they also contribute to employment as well. The latest data shows almost half of the U.S. workforce is employed by small businesses.
57% of Small Business Owners Think Remote Work Is Here to Stay
Not only do the majority of U.S. small business owners think that remote work is here to stay, but they have also observed a 19% increase in the number of available workers because of remote work options.
Small Business Digital Transformation Statistics
37% Increase in E-Commerce Sales
Although small businesses suffered from a lack of in-person shopping during the COVID pandemic, e-commerce sales increased by an average of 37%.
69.6% of Small Businesses Use Social Media Marketing
Over two-thirds of the global small business industry is currently utilizing social media for marketing. This number climbs to 92.1% when looking at U.S.-based small businesses only.
47% of Small Businesses Experienced Cyber Attack
Data collected from multiple sources and averaged shows that around half of small businesses in the U.S. experienced some form of cyber-attack last year.
44% of Small Businesses Use Cloud Services
Almost half of all traditional small businesses in the U.S. have already implemented cloud services into the business, and this figure rises to 66% for small technology businesses.
91% of Small Business Websites Are Mobile Optimized
While this is an impressive statistic, it doesn’t account for the fact that only 64% of small businesses have a website.
15% of U.K. Small Businesses Use AI Technology
As businesses grow in size, the adoption of AI technologies increases. By 2025, AI technologies are expected to be in use by 22.7% of small businesses.
21% to 35% of Small Businesses Are Interested in Using Virtual Reality
VR technologies are gaining popularity in the small business space with between one-fifth and one-third of small businesses exploring the possibility of using the tech for employee training and customer experiences.
51% of Small Businesses Have No Cyber Security Budget
Half of small businesses have no cyber security budget at all. Of the half that do have a cyber security budget, two-thirds have a budget under $500.
17% of Small Businesses Have Cyber Insurance
Not only are small businesses ill-equipped to prevent cyber-attacks, they’re also unprepared for the consequences. Just 17% have cyber insurance and more worryingly, just 36% are familiar with what cyber insurance is and does.
Small Business Success & Failure Statistics
52% of U.S. Small Business Owners Plan to Expand Their Business
Surveys carried out this year found that around half have plans to expand their business and 66% said that they expect revenues to increase.
70% of Small Businesses That Receive Mentoring Survive 5+ Years
This is double the rate of survival for small businesses that receive no mentoring at all.
81% of Small Businesses Adapt to Survive
The agility of a small business makes it possible to rapidly adapt to market changes. Surveys show that 8 out of 10 small businesses have implemented new strategies and technologies to remain competitive.
Small Business Prediction Statistics
Small Businesses Will Contribute to $1.45 Trillion Spend on Technology
145 million small and medium-sized businesses are predicted to spend up to $1.45 trillion on technology this year. 40% comes from the Americas.
Small Business Challenges & Opportunities
Up to 39% of Small Businesses Face Funding Challenges
This is particularly a problem for small businesses under 2 years old and especially if they don’t have any employees. Once past the 2-year point, the figure falls to 23% (employer) and 26% (non-employer).
~60% of Small Businesses Have Adopted or Are Adopting Automation
Surveys conducted in 2020 showed that approximately two-thirds of small businesses planned to implement automation technologies. Today, two-thirds of small business owners say that automation is essential for running their business.
Two-Thirds of Consumers Support Environmentally Friendly Small Businesses
Environmentally friendly small businesses should (in theory) enjoy greater customer loyalty since 60% of U.S. consumers say that they are willing to pay more for eco-friendly products and 78% say that a sustainable lifestyle is important to them.
Only 4% of E.U. Small Businesses Sell to Countries outside the Bloc
Not only do just 4 out of 100 small businesses in the bloc sell to the countries outside of the union, but only 8 out of every 100 sells to other countries within the bloc.
42% of Small Business Owners Report Feeling Burnout
With so many small businesses being one-person businesses (~80%), it shouldn’t come as any surprise that almost half of small business owners report feeling burnt out. This percentage rises to 62% when looking at minority business owners only.
Fewer than 50% of Small Businesses Report Their Sustainability Performance
The majority of small businesses still view environmental, social, and governance (ESG) policies as an unnecessary expense, without any benefit. For comparison, 94% of large businesses already use sustainability reports.
54% of Small Businesses Had or Are Having Supply Chain Issues
Whether caused by the COVID pandemic, the war in Ukraine, or other global issues, just over half of all small businesses have experienced or are currently experiencing problems with their supply chains.
43% of Cyber Attacks Are Aimed at Small Businesses
Small businesses are the preferred target for global cyber criminals. It’s easy to see why almost half of all cyber-attacks are aimed at small businesses. Globally, small businesses make up approximately 90% of businesses and often have a minimal (or zero) security budget.
Half of U.S. Small Business Say Diversity & Inclusion Aren’t Important
Despite all the advantages that a diverse and inclusive workforce can bring to a small business, 46% say that improving diversity and inclusion ranks as only slightly important or not important at all.
Frequently Asked Questions
83% of small business owners earn less than $100,000 per year, and a significant proportion earn less than $50,000.
80% of businesses survive their first year, but that number drops to 45% when we look at the first five years.
The average small business that has revenue of less than $ 5 million is advised to spend between 7% and 8% of revenue.
5 million new small businesses were created last year, 7.4% less than a year earlier.
This depends on the definition of small business used. The U.S. Small Business Administration defines it as “companies that hire fewer than 500 employees.”
SBA, BLS, Fed Small Business, Hoot Suite, HubSpot, McKinsey, Gov.uk, Chamber of Commerce, Bloomberg, Accenture.