The Ultimate List of Small Business Statistics for 2024

Though it’s difficult to know precisely how many small businesses there are worldwide right now, estimates sit around 400 million, with new entrepreneurs joining the ranks every day. Small businesses or “SMEs” are widely regarded as the backbone of the economy, responsible for supporting the flow of cash in and out of individual towns and cities.

Thanks to the rise of digital technology, it’s much easier for an ambitious individual to launch a small business with very little initial investment these days. You can start an online store with practically no start-up capital and begin selling your wares in a matter of minutes.

Today, we’re going to be exploring some of the most important small business statistics you need to know. Here are some key stats to get us started:

Small Business Statistics: General SME Statistics

1. Small businesses account for 90% of all global companies

(World Bank)

According to the World Bank, Small and Medium Enterprises play a significant role in our economy, accounting for around 90% of businesses and 50% of jobs worldwide. Formal SMEs contribute around 40% of the national income in emerging companies too.

The World Bank also notes small businesses are less likely to obtain loans than large firms, and often rely on internal funds, cash from family, and personal savings to fund their companies. Around 65 million firms are expected to have unmet financing needs each year.

2. Over 99% of America’s businesses are small businesses

(JP Morgan Chase)

According to JP Morgan Chase, over 99% of the 28.7 million firms in America were made up of small businesses in 2014. Around 88% of these firms hired fewer than 20 employees, and 40% had less than $100k in revenue. Building on these facts, the Small Business Administration found there are currently around 29.6 million small companies in the US.

3. Small businesses accounted for 1.6 million new jobs in 2020

(CDN Office of Advocacy)

In 2020, small businesses accounted for around 99.9% of all United States businesses, delivering employment in the form of 1.6 million net new jobs over the year. Additionally, the United States number of small businesses increased by 2.1% throughout 2019 to 2020.

4. Around 50% of small businesses start at home

(SBA)

SBA’s research found that around 50% of all small businesses are launched from home, with more home-based companies emerging all time. More specifically, around 60.1% of all firms not using paid staff are based at home, as are around 23.3% of employer firms. The most likely industry where a business will be home based is information (70%).

5. The most popular reason for starting a business is to be your own boss

(Guidant Financial)

Around 29% of people asked why they started their own business said they were motivated by the desire to be their own boss. Other popular reasons for starting a business included being dissatisfied with the standard workplace and wanting to pursue a specific passion. Only around 12% of respondents said they began their business due to an opportunity presenting itself.

6. The Services industry is most popular for small business owners

(Guidant Financial)

Research from Guidant found in 2020, the most popular kind of business to start was a “service” company. Services companies accounted for around 28 million businesses in the US, with an average revenue of around $9.5 billion. Other popular sectors included the food and restaurant industry, general retail, and the health, beauty, or fitness industry.

Small Business Statistics: Small Business owners

7. 44% of small business owners are 39 to 54 years old

(Guidant Financial)

The Guidant Financial trends index for 2021 found that around 44% of small business owners belong to the Gen X group (39 to 54 years old), while baby boomers own around 41% of small businesses. Around 12% of SMEs currently have millennial business owners, but the number is growing.

Guidant financial also discovered the majority of small business owners are men (66%)

8. Around 53.7% of small business owners have a bachelor’s degree or higher

(Fundera)

While it’s not always necessary to have a degree if you want to start a business, the majority of small business owners have some level of bachelor’s degree or higher. Fundera found that 32% of respondents had a bachelor’s degree, while 13% had a Master’s degree, and 15% said they had some manner of college education.

9. 56% of small business owners struggle to find employees for their business

(Indeed)

More than half of small business owners struggle to find the right employees to help them grow their small business. Around 56% of respondents said it’s somewhat difficult or very difficult to track down the professionals they need.

Crucially, Indeed’s studies also say that finding the right small business talent is harder than it used to be. 35% of respondents believe that attracting the right talent is more difficult than it was five years ago.

10. Working overtime is common for small business owners

(Fundera)

Fundera’s research found that working from home and being your own boss doesn’t necessarily mean more time off. Around 81% of business owners will work over time, usually working during the night as well as during the day.

Around 89% of small business owners also say they work on weekends to keep up with their busy schedules, although they may be flexible about their hours.

Small Business Statistics: Financing statistics

11. 65% of entrepreneurs in 2019 felt they didn’t have enough cash to start a business

(Kabbage)

Data released by Kabbage Inc in 2019 found that around 65% of entrepreneurs felt they may not have enough money to start their own business. 93% of business owners also calculated a survival rate of around 18 months. 58% of the respondents in the Kabbage study started their company with less than $25,000, and a third started with less than $5,000.

12. The average amount borrowed to start a business is $10,000

(SBA)

According to SBA, most companies able to access funding for their small business will ask for around $10,000 in start-up capital. However, high-tech firms can require a lot more – closer to around $80,000. Though it’s possible in some cases to get startup funding, the majority of small businesses are largely self-funded.

13. Small businesses have an unmet financing need of around $5.2 trillion each year

(World Bank)

Insights from the World Bank suggest that the current level of unmet financing needs for small businesses is growing. Around 65 million firms in developing countries have an unmet financing need of around $5.2 trillion per year. The East Asia and Pacific countries account for the largest deficit (46%), followed by America, and Europe.

The World bank also notes the Caribbean and Middle East, North Africa, and Latin American regions have the highest financial gaps.

14. The average income for a small business owner is $64,709

(Payscale)

While the most common reason to start a new business is to be your own boss, it’s also important to make a decent income. According to PayScale, the average median income for someone who operates and owns a small business is around $64,706, ranging from around 30k to 148k for most.

Notably, Payscale says geographical region will often have the largest influence on a business owner’s income. If you’re in a high cost-of-living area, you might not earn as much.

15. Micro businesses are the cheapest to start

(Business News Daily)

Micro businesses with fewer than ten employees are often the least expensive to start, costing around $3000 in total. The cost of your business can be even lower if you’re operating from home. Most small home-based business can start with only $2000 to $5000 in financing.

16. Low sales and cash flow are the number one causes of business failure

(SBA)

Studies by the office of advocacy found that low sales and limited cashflow are the number one cause of a business closing down. Around 1 in 12 businesses close on average each year. However, companies may close due to personal reasons too.

Small Business Statistics: Business survival and success

17. 92% of small business owners don’t regret starting their company

(Fundera)

Though starting a small business requires a lot of commitment and work, business owners don’t regret signing up for the challenge. Around 92% of respondents said they don’t regret starting their business. This is true around 70% of small business owners work more than 40 hours a week.

18. Only 63% of businesses continued to be profitable during COVID

(Guidant Financial)

Guidant financial found that most small businesses suffered as a result of the COVID-19 pandemic. Around 41% of companies said they had experienced a negative change in business operations since the pandemic began, and only 63% of companies overall were profitable in 2020.

Around 4% of companies said they expected their companies to fail as a result of the pandemic, while 78% believed their company could survive. The most common impact of COVID was a loss of revenue, affecting 23% of companies.

19. 60% of small businesses closed during to Pandemic

(Yelp)

Yelp’s Economic impact report found that around 60% of small businesses shut down or stopped trading as a result of the pandemic. The number of small companies closing down grew gradually from the beginning of April 2020.

20. About 50% of small businesses survive more than 5 years

(SBA)

SBA research finds around 50% of small businesses will survive for five years or longer, while only around a third of establishments will start for 10 years or longer. This data looks at the average success rate of a business outside of the impact of the pandemic.

21. Only around 11% of people are confident in small business growth

(Guidant Financial)

After asking respondents to rate their confidence in the ability of small businesses to thrive in America, Guidant Financial discovered only around 11% classify themselves as very confident. Around 30% of people rated “somewhat confident”, compared to 24% saying they were “somewhat unconfident”. Around 15% of respondents said they were very unconfident about the resilience of small businesses.

Small Business Statistics: SME Trends

22. 30% of pandemic entrepreneurs say they’ll never open a physical store

(Salesforce)

According to survey data from Salesforce, the number of small businesses founded in the United States during the pandemic between 2020 and 2021 increased by 24%. However, these companies are operating a little differently to the standard small business. According to the survey, 30% of pandemic entrepreneurs never want to open a physical store.

Salesforce also found that 32.9% of people started a small business because they were furloughed and unable to work during the pandemic.

23. Food and restaurant businesses are growing fastest

(Guidant Financial)

Research from Guidant Financial found the most rapidly growing industry for small businesses in 2020 was the food and restaurant sector (12% growth). The second most rapidly growing option was retail at 11% followed by Business Services at 11% and health and beauty services at 9%.

24. 72% of small business owners feel optimistic about the future

(Salesforce)

Research from Salesforce found that around d72% of small business owners still feel optimistic about the future, regardless of challenges caused by the pandemic. In the last year, 72% of small business owners grew their online presence, and 71% said they survived the pandemic because they invested in digital transformation.

Summary – Small Business Statistics

Small businesses are the backbone of the global economy, and an important part of what makes the world so versatile. As the small business statistics above show, there’s still plenty of opportunity for entrepreneurs to get involved with the world of small business sales and carve their own place in the industry. As we continue into the future, small businesses will only continue to grow.

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Sources

World Bank

JP Morgan Chase

CDN Office of Advocacy

SBA

Guidant Financial

Fundera

Indeed

Kabbage

Payscale

Business News Daily

Yelp

Salesforce