- HoneyHat

1. What are the US’s Small Business Statistics?

According to the latest statistics, there are 33.2 Million Small Businesses in the US. These small businesses account for 99.9 Percent of all US businesses (SBA 2022).

According to the Small Business Administration (SBA), a small company is one that employs fewer than 500 people. This means that many high-value startups in the US fall within the definition of small business.

There are many definitions of small businesses. In comparison, a European Union business with fewer than 50 employees would be considered small. Small businesses are those with less than 15 employees in Australia.

We can see that out of 33.2 million small businesses there are 27,000,000 with no employees, 5.4 Million with fewer then 20 employees and 650,000 with between 20-4999 employees.

2. What are the jobs created by small businesses?

It’s not surprising that so many small businesses exist in the US. Small businesses create millions of jobs every year. According to the Small Business Administration (SBA), 12.5 million jobs were created by small businesses in the United States in 2022 (SBA 2022). This is 300,000. It’s 300,000. Less than 2021 when 12.8 million jobs were created by small businesses in the US.

Statistics from the past year show that small businesses are an integral part of the US economy and growth. They provide job opportunities, financial growth and a wide range of unique products. They contribute to economic growth, regardless of whether they grow into larger corporations.

3. Global Economic Growth is driven by small and medium-sized businesses

More than 90 percent of the population works for small and medium-sized companies, also known as SMEs (SalesForce 2019, 2019). As the statistics show, small businesses are responsible for creating large numbers of jobs.

SME have been generating employment for the last few years. SME are key contributors to innovation. These contributions can vary across industries and countries. Access to global markets, better knowledge networks and digitalization have all played a significant role in SMEs’ ability to be part of the global economy. Global economic growth is a significant contribution to SMEs by creating jobs, promoting sustainable industrialization and fostering innovation.

4. What is the most common reason to start your own business?

People might open their own business for many reasons. The most popular motivation for opening a business is that of 29 percent of respondents (Guidant Financial 2021).

Next is dissatisfaction at corporate America. This was the primary motivator for 17 percent of respondents. Another common reason is to follow one’s passions, take up a present opportunity, feel inspired, or simply not wanting to retire.

Being your own boss gives you the freedom to not only to be their boss span type=”font-weight 400 ;”>,, but also to be the boss of your time. You can make your own decisions and work where and when you want. While there are many reasons people choose to pursue financial freedom, the most important is the freedom from their current jobs and greater control over how they work.

5. The COVID-19 Crisis Hits Small Businesses Hard

Uncertainty can have a major impact on small businesses. This was especially evident during the coronavirus epidemic.

According the most recent statistics on small businesses, almost one-third (31%) of small businesses in the US is currently not operational (Facebook 2020).

In March 2020, the US was the epicenter of the virus and more than 70% of small businesses in the US closed down. Over 60% of these small businesses closed due to orders from the government or health authorities. Large parts of the country were placed under lockdown to stop the spread of the virus.

Many small business owners have taken steps to adapt to the new reality created by the coronavirus. Many have expanded their online presence to reach their clients and maintain their business by selling their products or services online.

More than half of respondents (51%) say they have improved their interactions with clients via the internet. 36% of online-based businesses are also selling online.

In the future, 28% of small business owners believe cash flow will be their greatest challenge. Then there is a lack in consumer demand.

6. The likelihood of starting a side business is higher for younger generations

Statistics show that side-hustling is more common among the new generation. Millennials and Gen Zers have a 188 percent higher likelihood of starting a side-business than traditionalists or Baby Boomers (Salesforce, 2019).

Millennials and Gen Zers are 48 percent more likely than Baby Boomers to say they started a company because they had an idea they were passionate about. The ease of starting your own business has made it much easier for younger generations to be their own boss. It’s easier than ever to start a business online.

7. What percentage of small businesses fail?

People who are starting their own business have one of the greatest fears: the possibility of losing it all. It’s not an unreasonable fear. According to the Bureau of Labor Statistics, more than 20% of small businesses fail within their first year and almost 50% of startups fail within five years.

This statistic should not discourage you from starting your business. It should actually do the opposite. Knowing the reasons and causes of the failures of small businesses within the first year can help you plan your business strategy to mitigate any potential risks. While you cannot eliminate all risk, it will give you a better understanding of what you can do in various situations.

8. What is the primary reason why new businesses fail?

Lack of cash is the main reason new businesses fail. According to CB Insights, 38% of small businesses fail due to a lack of cash or inability to get financial support.

No market demand for the product is the next reason new businesses may fail. This is why 35% of all new businesses fail, according to statistics. However, entrepreneurs who are aspiring should do more to ensure that there is demand for the products they offer consumers.

Startup failures can also be caused by being outcompeted or having a poor business model. Mismatched teams, pricing issues and mistimed product launches all contribute to the failure of new businesses.

9. What is the biggest challenge for small businesses?

Small businesses face many challenges in the initial years of starting a business. Poor quality labor is one of the biggest challenges for small businesses. CNBC, 2019, revealed that 52 percent of respondents said that labor quality was the biggest problem facing small businesses. Owners of small businesses say it is difficult to find qualified employees to hire. Owners with more than 50 employees say it is harder to find qualified candidates.

Small business owners also face financial difficulties. Smaller corporations are often unable to rely on large amounts of capital, so they struggle to manage their finances.

10. The top digital marketing channel among small business owners

Small business owners love social media. According to The Manifest 2019, 64 percent of small businesses surveyed use social media as part of their marketing strategy.

This study also shows that almost all small businesses advertise. This is because most small businesses advertise digitally, as opposed to traditional channels. Online marketing is the second most popular form of advertising, at 49 percent. Print marketing (36%), and TV (22%) are close behind.

Because they are able to target customers more effectively, small businesses turn to digital marketing. Small businesses can reach potential customers through digital marketing, which is more effective than traditional advertising methods that reach a wider audience.

Social media statistics prove that social media marketing can work for businesses. 73 percent believe that their social media marketing efforts have been effective or very effective for their business.

Conclusion – Small Business Statistics

It is clear that 2023 will be an important year for small businesses. These statistics can help you make better decisions if you own a small business or are looking for small business ideas. Even though you will likely face difficulties, it is possible to be more proactive by knowing current trends.

Summary: Small Business Statistics

The US has 33.2 million small businesses.
Small businesses in the US created 12.5 millions new jobs in 2022.
More than 90% of the population is small- and medium-sized business owners.
29 percent of respondents stated that being their boss is the main motivation to open a business.
COVID-19 rendered 31 percent small businesses in the US un-operational.
Gen Zers and Millennials are 188% more likely than baby boomers to want to start a side-business.
Over 20 percent of small businesses fail within their first year. Nearly half of all small businesses fail within five years.
38% of small businesses fail due to cash flow problems.
52% of respondents stated that labor quality is the greatest problem in small businesses.
64 percent of small businesses surveyed use social media as part of their marketing strategy.

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Author: Maryam Mohsin

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