73 Remarkable Small Business Statistics to Know

Millions of people dream about starting their own business. It’s an excellent way to drive your passion and create your own path to success. However, owning a small business isn’t at all a walk in the park. Approximately 20% of new businesses fail within the first two years. 

It’s crucial to stay on top of the newest small business statistics to create a business strategy built to succeed long term and always get new and innovative ideas.

Let’s jump in!

The Size of Small Businesses Statistics

1. As of 2020, there were 31.7 million SMBs in the U.S (99.9% of all businesses). 

2. Depending on the industry, a small business can have 250 to 1,500 employees. 

3. Out of the 31.7 million small businesses, 3.7 million are microbusinesses with one to nine employees. 

4. Annually, small businesses create 1.5 million jobs and account for 64% of all new jobs in the U.S. 

5. There are 582 million entrepreneurs in the world. 

6. 15 million Americans work full-time for their own business. 

7. Small businesses in America occupy between 30% and 50% of all commercial space, an estimated 20 billion to 34 billion square feet. 

8. The number of small businesses in the U.S. has doubled since 1982.

Small Business and Social Media Statistics

9. 86% of small businesses use Facebook for advertising as their leading social media platform. 

10. Small businesses with fewer than 10,000 Facebook followers that publish 60-plus times per month get 60% fewer clicks per post than businesses that post five times or less per month. 

11. 73% of small businesses invest in social media marketing. 

12. In 2019, 63% of small businesses increased investments in social media. 

13. 60% of people discover new products on Instagram. 

14. 130 million accounts open shopping posts to learn more about products every month. 

15. One-third of the most viewed Instagram stories are from businesses. 

Consumer Preference for Small Business Statistics

16. In 2020, 46% of consumers said they were more likely to shop at a small business. 

17. 53% of people say shopping at small businesses gives back to their communities and gives them more purpose in their shopping habits.

18. 48% of people shop SMEs for higher-quality items and 45% for personalized service. 

19. 91% of the time, consumers will choose small businesses when convenient, and 74% look for ways to support small businesses even if it’s not convenient. 

20. Consumers (77%) are willing to pay more if they receive excellent customer service from small businesses.

Small Business Finance Statistics 

21. 66% of small businesses face financial challenges, with 43% claiming the most prominent challenge is paying operating expenses. 

22. If revenue was lost for two months, 86% of small businesses would need to supplement funding or cut costs. 

23. 40% of small enterprises have debts of $100,000 or more. 

24. 43% of businesses asked for new financing in 2019. 

25. In 2020, there was a 14% credit growth rate. 

26. The approval rate of institutional loans for SMEs was 65% in 2019. 

27. In 2020, small businesses experienced a 14% credit growth. 

28. The average cost of starting a retail business is $32,000. However, store owners have reported starting with only $5,000.

29. 39% of small business owners use cash to start their business. 

30. 20% of small business owners opted for a 401(k) business financing to start their business. 

31. The biggest challenge small businesses face is cash flow. 

32. The overall average loan amount is $107,000. 

33. The average owner of a small business receives a salary of $69,593 per year. 

34. At the end of 2020, nine million loans were given to SMEs, totaling $750 billion. 

35. The average small business owner uses about 10,000 in startup capital. 

Characteristics and Habits of Small Business Owners Statistics 

36. Businesses with founders aged 55 years or older are more likely to survive but less likely to have employees.

37. 81% of business owners work nights, and 89% work weekends. 

38. Most small business owners work between 40 and 49 hours per week. 

39. 32% of business owners have a completed bachelor’s degree, while 12% only finished high-school. 

40. Millennials and Gen Z are 48% more likely to say they started their business because they were passionate about an idea. 

41. 29% say their motivation for starting a business was to be their own boss. 

42. Compared to baby boomers, millennials and Gen Z are 188% small business owners are more likely to have a side hustle. 

43. 38% of Small business owners say discipline is needed to have an entrepreneurial mindset. 

44. Women entrepreneurs are most likely to start a business in retail and wholesale (26%), government, health education, and social services (21%), and professional administrative services (18%). 

Small Business Technology Statistics

45. 84% of small enterprises are using at least one digital platform to share their products. 

46. 79% are using digital tools to communicate with suppliers and customers. 

47. Small businesses in 2021 plan to step up their digital efforts. 

48. 55% of small business owners say that technology manages customer interactions. 

49. The most important factors when looking for new technology are ease of use (69%), trustworthy vendor (63%), and price (61%). 

50. Close to 85% of small enterprises have already invested in SaaS options in 2021.

51. On average, small firms use anywhere between 25 and 50 SaaS solutions. 

52. 80% of small businesses are not taking full advantage of available technology. 

53. Small companies that fully utilize technology earn two times more revenue per employee, experienced nearly four times the revenue growth annually, and were almost three times more likely to create jobs in the next year. 

54. Nearly one-third of all businesses prioritize CRM platforms over other types of technology. 

55. 28% of data breaches in 2020 involved small businesses. 

COVID-19’s Affect on Small Businesses Statistics

56. In 2020, 29% of small business owners mentioned that the impact from coronavirus, loss of business, and even their business closing was their worst fear. 

57. The average small business with monthly expenses over $10,000 only had enough savings to last roughly two weeks. 

58. 70% of small enterprises anticipated taking financial aid. 

59. An entire 22% of SMBs went out of business between February and April 2020. 

60. African-American businesses were hit the hardest, with a 41% drop in business activity. 

61. 32% of small businesses that have received financial aid still had to cut wages and lay off employees. 

62. 62% of small business owners still feel the worst impact from COVID-19 is still yet to come in 2021. 

63. 55% of businesses needed to modify the layout of workspaces to create room for social distancing. 

64. With the pandemic mostly contained in China, household spending rapidly increased by 3.3% and 7.9% on goods and services.

65. Compared to April 2020, people were 11% less likely to say COVID-19 is causing their business problems. 

66. The more prominent nuisance COVID-19 caused for businesses was the lack of turnover.

67. Ecommerce sales are higher than ever before after the pandemic caused years of growth in just a few weeks. 

68. 75% of small business owners agree that if a crisis like COVID-19 were to happen again, they’d be better prepared for it. 

The Future of Small Business Statistics

69. 65% of small businesses are more likely to invest in technology like artificial intelligence for automation. 

70. By 2025, 80% of business owners who invested in personalization will stop funding projects due to a lack of ROI. 

71. Online and digital channels will continue to grow. No-touch payments, including contactless cards and mobile payments, increased among small businesses in 2020.

72. Remote work is here to stay and will increase 13.5% even after the pandemic.

73. Customers will look to get more out of their money and place more importance on value. 

Final Thoughts

What can we learn from the small business statistics? SMEs make up almost the entire population of businesses in the U.S. So, if you’re thinking of opening a business, you’ll likely experience some of the same struggles and wins as nearly every small business owner across the country. 

The statistics can tell us that starting a new business isn’t easy, especially during COVID-19, and considering many businesses fail within the first year. However, being aware of new the newest statistics can give you fresh business ideas, helping your business stay on top of your game. If you’re a small business owner, SEO is another great way to gain brand awareness and outperform your competitors. 

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We got our information from the following sources:

Small Business Administration Fundera Markinblog Lumen HubSpot The Manifest Instagram Businesswire Zendesk Fed Small Business Camino Financial Guidant Financial DataforGood PayScale JP Morgan Chase Fundera Babson US Chamber SWZD SalesForce Small Business Trends Statista PNAS NCBI PWC Babson McKinsey Shopify SHRM Gartner Score Zen Business Workest