Essential Small Business Statistics: Big Business Starts Small
Small businesses need to be extremely inventive, persistent, and brave to survive in a highly competitive market. With thousands of new businesses launched every day, it can be tough to stand out from the crowd.
We want you to be as prepared as possible when it comes time to launch your own small business. That’s why we’ve compiled these statistics, which we hope will provide a useful insight into the current entrepreneurial landscape.
Key Small Business Statistics for 2025 – Editor’s Choice
- According to the Small Business Administration, it takes an average of $30,000 to start a business.
- There are more than 34.8 million small businesses active across the United States in 2025.
- It takes only four days to open a small business; around 33% get started with less than $5,000.
- 47% of small business owners in 2024 were worried about AI and automation replacing their businesses.
- Only 0.7% of US entrepreneurs who apply manage to get VC funding.
According to the SBA, there are over 34.8 million small businesses active across the United States.
(U.S. Small Business Administration)
It’s estimated that these small businesses combined have around 61.7 million employees, which accounts for 45.9% of all employees in the US in 2025.
Businesses with fewer than 500 employees represented 99.9% of all US businesses in 2024.
(Deloitte; U.S. Small Business Administration)
Additionally, 98% of businesses have fewer than 100 employees.
13.3% of small employer firms are structured as sole proprietorships.
(Office of Advocacy)
In contrast, 86.5% of nonemployer small businesses are structured this way.
Small businesses account for 35% of all US exports.
(Office of Advocacy)
This now amounts to more than $542 billion annualy.
73% of small businesses have grown in 2024.
(U.S. Bank)
The most recent data has shown that 84% of Black-owned small businesses and 80% of Hispanic small businesses have seen growth in the last year.
More than half of small businesses (56%) rely on the entrepreneur’s personal savings or loans from family or friends to get them off the ground.
(SBE Council; Fed Small Business)
Aside from that, small businesses also rely heavily on traditional debt. A recent survey of several states shows that the most common types of external financing for employer firms are loans and lines of credit (54%) and credit cards (53%).
Approximately 30% of nonemployer firms and 7% of employer firms began without any startup business capital.
About 33% of small businesses get started with less than $5,000.
(SBA, Small Business Trends)
On average, it costs around $30,000 to start a business, according to the Small Business Administration. However, home-based small businesses can be started for $2,000 to $5,000. Online publication Small Business Trends further reports that 58% of small businesses start operating with less than $25,000.
Small business loan default rates rose to 3.40% in 2024.
(Coleman Report)
The peak of small business loan default rates was in 2009, immediately after the Great Recession, when the average rate was around 6%. In 2025, the default rate is expected to drop to 3.19%.
Only 0.7% of US entrepreneurs who apply get venture capital funding.
Small business’ share of US GDP is 43.5%.
(U.S. Small Business Administration)
The percentage has varied over the years, reaching 50% at the start of the 21st century.
One in four small-business entrepreneurs reports spending more than 40 hours per year working on their federal taxes.
(National Small Business Association)
When asked how much time they spend each year dealing with taxes (calculating payroll, working with the accountant, and filing reports), 11% of small business representatives answered that they spend more than 120 hours. Another 15% said that they spend between 41 and 80 hours on tax-related tasks.
91% of small businesses in the US generated less than $1 million in revenue in 2024.
(National Small Business Association)
The majority, or 25% of small businesses had revenue which was less than $25,000.
Firms with fewer than 100 employees have the biggest share of small business employment.
(United States Census Bureau; JP Morgan Chase & Co.)
Around 18% of all employees in the US work for companies with fewer than 20 employees.
Small business employee wages are expected to increase by 2.5% in 2025.
(CPA Practice Advisor)
In 2024, the growth was 3.5%, down from 6% two years before.
According to the US Census Bureau, 56.6% of businesses in the States have five employees or fewer.
(U.S. Small Business Administration)
This was up from 55% compared to the last previously available data.
More than 2.6 million new jobs were generated by small businesses in 2024.
(Office of Advocacy)
The data indicates that more than two thirds of jobs in the US are generated by small businesses.
39.1% of small business owners were female in 2024.
(Wells Fargo)
Female entrepeneurs employed more than 12.1 million people in the US during the last year.
Gen X were the generation with most small business owners in 2024.
(Capsule)
American small busienss owners belonging to this generation amounted to 43% of all owners, followed by Baby Boomers at 37%.
The most popular motivation for someone to start a small business is determination to be their own boss.
(Guidant Financial)
In a survey by Guidant Financial, 26% of responders said they wanted to be their own boss, while 23% said they wanted to pursue their own passion.
California had the most small businesses in 2024.
(Office of Advocacy)
The Golden State had 4.2 million small businesses, followed by Texas and Florida.
65.9% of all employees in Montana were employed by small businesses in 2024, the highest percentage in the US.
(Office of Advocacy)
The next two states leading the way in small business employment were Wyoming and Vermont.
60% of small business owners kept their own books in 2024.
(Small Business Majority)
While it may seem surprising, the truth is that the majority of owners still do their own bookkeeping.
42% of small businesses in 2024 failed due to low market demand.
(Forbes)
Additionally, 38% fail due to lack of capital.
79% of small business owners in 2024 said they were open to impelenting AI and Automated Solutions in 2025.
(U.S. Bank)
On the other hand, some 47% of owners were worried that their company will be replaced by automation. When it comes to employees, 1 in 4 were worried about AI replacing their jobs.
71% of small business owners in 2024 said that digital tools make their jobs easier.
(U.S. Bank)
The same survey found that 9 out of 10 employers found digital tools to be important to their businesses.
In 2024, inflation was the most important problem for small business owners in the US.
(Statista)
More than 24% of respondents pointed to inflation as the biggest issue, followed by the quality of labor at 21%.
74% of small business owners in the US expect a period of stability for their business in 2025.
(American Express)
The vast majority of business owners, of 91% of them claimed that they felt confident in their ability to grow their business this year.
42% of small business owners claimed that setting concrete goals was the most important success factor in 2025.
(American Express)
This was followed by meeting with the customers at 41%, while 33% stated customer research as the most important key to success.
Sources
For years, the clients I worked for were banks. That gave me an insider’s view of how banks and other institutions create financial products and services. Then I entered the world of journalism. Fortunly is the result of our fantastic team’s hard work. I use the knowledge I acquired as a bank copywriter to create valuable content that will help you make the best possible financial decisions.
