The Ultimate List of Small Business Statistics for 2024

These small business statistics summarize the global size, revenue-share, key trends, characteristics, and habits affecting the small businesses, to equip new leaders and their collaborators for strategic decision making.

Scroll down to discover the quantitative data from around the world about small businesses.

Global Small Business Statistics

1. A small business can have 1 to 1,500 employees depending on the industry and country.

(Small Business Administration)

United Nations agencies like ILO put small businesses as a firm having fewer than 250 employees. Yet, the definition varies depending on the country and industry.

For comparison, the United States Small Business Administration defines firms employing 100 to 1500 employees as small business enterprises. The Small Business Administration also has other factors for determining if a company fits the definition of small business or not, such as the company headquarters, for-profit or not, where it operates, and whether it harbors a market share. So, besides the number of employees, a small business is also evaluated based on the average annual market cap in the US.

At the same time, the European Union includes businesses with 50 or fewer employees as small businesses. Conversely, the Australian government considers any business with fewer than 15 employees as a small business.

The definition of small business matters because a company can compete for government contracts and raise government-based business loans only if it officially qualifies as an SMB.

2. Small and midsize businesses make up more than 90% of all businesses globally.

(International Labor Organization, United Nations)

Formal and informal micro, small, and medium-sized enterprises make up more than 90% of all firms globally, accounting for 70% of employment worldwide. For this reason, in most OECD countries, SMBs contribute more than half to GDP across various sectors. The lion’s share of SMBs, however, goes to the service sector (the tertiary sector of the economy).

Small business owners are also key players in fostering innovation. In fact, a study in 2008 by the Office of Advocacy found that small businesses are more likely to develop emerging technologies compared to their large counterparts.

And given the improvements in digitalization and knowledge networks, multiple economic indicators estimate that small business owners will contribute enormously to the global economy, with a growth rate of 2.82% in 2019 alone.

3. There are over 32.5 million small and midsize businesses in the US (99.9% of all corporations), according to US Small Business Administration

(US SBA Office of Advocacy)

Small companies employ 61.2 million people in the US, 46.8 percent of the private workforce as of 2021. Moreover, 98.2% of these small businesses in the US engage less than 100 people. Furthermore, about 89% of the 32.5 million small employer firms have 20 or fewer employees. This estimate also includes 10% of nonprofits and tax-exempt organizations. These small business firms cover almost every industry, from health care to fitness industry, oil and gas extraction to technical services.

4. Small businesses in the US have added more jobs than large corporations from 2000 to 2020. Small firms with fewer than 100 employees have contributed most to this growth.

(US SBA Office of Advocacy)

Since 2000, small businesses account for 65.1% of the net new jobs created. In 2019 alone, the small enterprises made 1.6 million job profiles, in which SMBs with fewer than ten employees bred 1.1 million of those.

Almost 81 % (25.7 million) of the small businesses have no employees at all, so the 10.6 million vacancies of the last 20 years came only from the 19 percent (6 million) of the SMBs.

It is equally important to realize that there are only 20 thousand large companies in the US, so their share in the job creation also stands out.

5. UK’s small business had lower growth last year than the year before. The decrease amounted to 389,600 businesses or a decline rate of 6.5%

(Federation of Small Businesses)

SMBs account for 99.9% of the UK's 5.6 million businesses in 2021. Plus, almost all the 99.9% (5.5 million) small firms have fewer than 49 employees.

Over 4.1 million businesses are individually-owned with no employees, and only 1.4 million classify as small businesses with paid employment. These 1.4 small businesses account for over 48% (12.9 million) of all occupations and about 38% of turnover in the private sector.

The proportion of the UK's total small businesses steadily increased since 2000, with the downcast change experienced only between 2017 and 2018 (0.5% decrease) and 2020 and 2021 (6.5% decrease).

6. Small firms currently make up 99.8% of Australian businesses.

(Business.Nab)

About half of the 99.8% SMBs have been in business for less than ten years, but only 1 in 10 SMBs in Australia are experiencing a constant state of expansion.

In spite of that, the small and medium scale businesses are the backbone of the Australian economy, contributing to 57% of Australia’s GDP.

7. It can take anywhere from 4 to 233 days to start a small business

(World Bank)

In developed countries like the US, it takes only four days to start a small-scale operation. On the other hand, in heavily indebted poor countries, starting a small business can take up to 23 days. The difference occurs because of the availability of resources, infrastructure, transportation, and so on.

The disparity also arises because of the income gaps. For comparison, an individual with a high income — the global average — can have their business up and running in 11 days. Whereas it takes almost double the time for an individual with a low income.

Small Business Statistics: The Demographics

8. Gen X (41-56 years old) own 46% of small businesses globally.

(Guidant Financial)

Guidant Financial small business statistics show that Baby Boomers account for 41% of all small businesses globally, but Gen X’s own the largest market share with 47%. Millennials make up 13% of small businesses, while Gen Z’s account for only 1% of small businesses.

9. Women own nearly one-third of all micro and small businesses globally; although the representation is only 31%, women-owned firms are the fastest-growing segment of businesses.

(Guidant Financial, American Express)

Of course, the persistent gender gap remains even in the small businesses entrepreneurship domain.

Looking globally, women own and lead up only 31% of small businesses. However, the small global proportion is because of the rarer women-entrepreneurship in developing nations.

In developed nations like the US, however, 43.1% of small businesses are female-owned. Regardless, when it comes to revenue generated, the average male-owner income via small businesses is US$ 75,462. And the average female-owner income is $63,896, meaning women make only 85¢ for every $1 earned by men.

Further, 52.7% of women-led small businesses are sole proprietorships, and only 32% of women-led small firms employ four or more people. Also, Gen X takes the lead, given 51% of women-led firms are run by women of ages 41 to 56 years old.

10. 88% women-led small businesses generated less than US$ 100,000 in revenue

(WBENC)

WBENC documents that women-led small businesses that make more than US$ 1 million in revenue increased by 46% in the past 11 years; however, these firms account for only 1.7% of all women-led small firms in the US.

When looking over the cash flow statements, the majority of the US women-led businesses (about 88% as of 2018) generate annual receipts of less than US$ 100,000. Still, the small business growth rate owned by women is faster than that of large women-led companies.

11. Statistical data from multiple sources yields good news for US minority-owned small businesses.

(US SBA, Guidant Financial, MBDA)

Till 2015, minority ethnic groups made up only 15% of the small business in the US; today, 45% of all SMBs in the US are owned and led by minorities.

In particular, micro businesses and small firms owned by minority women saw a growth rate of 163% over a decade. As a result, almost 50% of all women-led businesses are owned by women of color in 2021. As much as 17% ownership of women-led SMBs in the US is with Latina women.

Additionally, Guidant Financial states that immigrant-owned SMB representation has also seen a boost in the past decade. As of 2021, 25% of all small businesses in the US are immigrant-owned. In particular, California, New York, and New Jersey are most dependent on immigrant-owned firms.

On a side note, veterans own 9.1 of all SMBs in the US, making up about 2.5 million small firms; roughly 2 million veterans-led small firms have sole proprietorships, while the rest of the veteran-owned SMBs employ over 5 million people.

Small Business Statistics: Technology Integrations

12. 66% of SMBs using a project management tool are able to complete their projects within the original budget.

(BigContacts)

While 23% of small businesses are hit hard because of lack of management, 66% of small businesses survive or do not face cash flow problems because of project management tools. So, if you are one of those small business owners that belong to the 23% category, ensure to utilize the best project management software for highly profitable outcomes.

13. 84% of small businesses use at least one digital tool to share their products and services with the customers

(US Chamber of Commerce, American Innovators)

Post covid, small businesses count on digital platforms more than ever to advertise their product, reach new customers, and grow their companies.

Likewise, 88% of small businesses use Facebook to advertise their products and consider it as a marketing strategy. At the same time, 73% of small business owners invest in at least one social media platform for brand exposure and to boost their sales. Furthermore, 75% of SMBs utilize tech platforms for the sole reason of marketing their product via an online medium.

Nevertheless, reports from American Innovators indicate that 73% of US SMBs are not fully aware of the digital resources like online payment channels and productivity tools available to level up their game in the foreign market. As a matter of fact, if all the US small businesses have good access to technology, it could increase US GDP by US$ 81 billion and add 900,000 new jobs.

14. Digital-forward SMBs are more prepared to handle market volatility.

(Salesforce)

71% of existing SMBs endured the pandemic through digitization. 35% of evolving small businesses had less than 50% digitized processes before the Covid-19 and integrated more online services like contactless payments, touchless pick-up and delivery, and other COVID-safer customer alternatives to safeguard their businesses.

Even in terms of revenue-earned, small firms with technology integrations give their employees two times the pay than the non-digitized small companies. Additionally, digitized-small firms generate four times more annual receipts than non-digitized SMBs; for this reason, fully-digitized SMBs are three times more likely to scale up their business in the next year and create more job profiles.

15. 85% of growing SMBs believe it’s extremely or very important for them to invest in some kind of communication SaaS

(Salesforce)

Especially after the pandemic, small businesses are focusing on offering more flexibility to their customers with payments and the ways customers can reach them.

A report based on responses from 2300 small businesses indicates that 57% of SMBs are stressing more on transparency and clear communication with the customers. Furthermore, 37% of SMBs consider customer relationships over one-time interactions.

16. Small-sized businesses are 2x more likely to invest in CRM and financial software than other web-based tools.

(Salesforce)

CRM software allows businesses to manage all their communications and relationships with both existing and potential customers; no wonder 31% of (digitized) small business owners prefer investing in them over any other digital service. An equal number of SMBs consider accounting tools as the most important tech investment for their business. 28% of small businesses invest in some other kind of digital tool to grow their business.

17. Data breaches in SMBs have risen two-fold compared to the previous years, with 46% of all data breaches centered on SMBs in 2021 compared to only 28% in 2020

(Verizon)

With each year, cyberattacks are rising among SMBs. In 2020, small businesses accounted for less than half the number of breaches that large companies experienced.

However, the 2021 Data Breach Investigations Report (DBIR) suggests that both the organizations are now less far apart, with 46% breaches in small organizations (1000 or fewer employees) and 54% cyberattacks in large firms (more than 1000 employees).

Financial gain is the most prominent motive behind most cyberattacks in small businesses, with over 93% of cybercrimes focused on monetary exploitation. System intrusion, miscellaneous errors, and basic web application attacks represent over 80% of cyberattacks.

18. Around 71% of small businesses have a website. Plus, 43% of SMBs invest in web performance services.

(Fits Small Business)

Back in 2018, only 50% of small businesses owners had a website. However, the latest small business stats reveal that almost 71% of small businesses have a web presence. Among the small businesses without a website, 29% of small businesses intend to build a website in 2022.

It is also critical to note that 38% of customers will stop interacting with a poorly designed site. So, in case your website doesn’t have a website, ensure to utilize the best website builders and represent your business online with a beautiful-looking, highly optimized website. Alternatively, you can consider investing in the best eCommerce platforms like Shopify and Squarespace if you want to automate sales and have application integration or store customization options to manage sales.

Equally important to note is that 43% of SMBs invest in web performance tools, as poor website experience drives almost 50% of potential customers straight into your competitors’ arms.

19. 95% of small businesses (into manufacturing) improve some or all their processes after their ERP implementation

(Datix)

Although 64% of small business owners believe that ERP projects exceed their budgets, 95% of small business owners say that ERP implementations cut their costs by one-fourth and small business administration costs by one-fifth of the previous costs. Furthermore, Datix, in its impact of ERP on businesses, states that modern ERP systems increase on-time deliveries by 24%.

Remember that a reliable ERP system brings all your operations, like customer management, human resources, business intelligence, financial management, into one system and reduces process time.

Small Business Finance Statistics

20. 57% of small business owner use their personal savings for startup capital

(Kauffman Firm Survey, Guidant Financial, UnsecuredFinances)

Some sources like the Kauffman Firm Survey suggest that starting a small business costs — on average — US$ 80000. On the other hand, other sources like the Wells Fargo Small Business Index estimate the startup cost to be around US$ 10000.

Plus, web-based small businesses may need much more. Moreover, self-reliant small businesses like freelancing cost nothing to start.

Whichever it may be, Guidant Financial reports that almost 57% of small businesses are self-funded; accounted for — by the use of personal credit cards, home equity, and other personal assets — 74% of small business owners belong to the self-funded group.

Additionally, 20% of small business owners opt for Rollovers for Business Startups (ROBS) — the 401(K) Business Financing — to fund their business.

21. Stagnant or growing SMB-owners (in the US) receives an average salary of US$ 60,000 per annum

(TheBalanceSMB, Fundera)

About 86% of SMB-owners receive an annual salary of less than US$ 100,000. As a matter of fact, only 10% of small business owners make more than a million. Retain that most SMB-owners do not take a salary at all.

It is noteworthy that the annual pay highly depends on two aspects: industry and location.

For instance, a retail owner makes on average about US$ 55,000 annually. Conversely, a person leading a manufacturing company makes up to US$ 250,000 per year. Moreover, business owners' salaries run parallel to the cost of living in the area, meaning a retail owner of New York City may make up to 3x times the retail owner based in Raleigh, North Carolina.

Must be recalled that the wage gap also concerns small corporations; as mentioned, women make only 85¢ for every $1 earned by men.

22. Small businesses reported that lack of cash flow is the biggest challenge for many small businesses

(SBA, Entrepreneur, FedSmallBusiness)

1 in 5 small businesses fail within their first year of operation. The top reasons: improper management and lack of cash flow. Fundera suggests that 66% small business owners face financial challenges, while 46% find it tough to meet the cost of operation.

Hypothetically, 86% of SMBs have to cut down their cost and supplement funding if faced with a two-month revenue loss.

For this reason, about 70% of all small business owners have some kind of debt; 33% carry a debt exceeding US$ 100,000, and the rest — 37% of them have a debt of US$1 – US$ 100,000. By the third quarter of 2020, 9 million loans worth $750 billion were dispatched to the SMBs in the US alone.

As of 2020, 48% of SMBs have ample revenues to continue their operations in the same manner. Out of this, only 28% of SMBs had adequate capital to continue their business, and the rest of 20% are backed by small business loans.

Small Business Statistics: Consumer Preferences

23. 70% of Americans are more likely to shop from a local small business

(MintLife)

Online or in-store, almost 70% of Americans prefer supporting local businesses and are likely to shop via small businesses. 57% of Americans prefer shopping local because they want to keep money local, while 38% do so to support their local communities and creators.

Also, 28% of Americans shop locally because of the better service, whereas 77% are willing to pay more if they receive excellent customer service from local shops.

In terms of convenience, 91% of customers will turn to small businesses if they feel convenient, but only 74% choose to support local businesses while being inconvenient.

Moreover, when it comes to shopping online from small businesses, Millennials and Gen Zers favor web-medium 4.5x more than the Boomers and Gen Xers.

24. Consumers prefer communicating on the phone 4x more than visiting the actual location of the small business.

(Bright Local)

Bright Local Customer Contact Statistical reports suggest 60% of consumers prefer communicating on the phone, whereas only 15% prefer visiting in person. The other 25% of customers weigh other communicating channels like email, social media platforms, messages.

Moreover, about half of the customers will not use a business if they find the contact information wrong or out-of-date.

Given these points, GoogleMyBusiness listing is critical for increasing sales, as only 15% of people — who prefer shopping online — opt for in-store purchases.

25. 45% of customers read reviews before purchasing from the brick-and-mortar establishments

(BazaarVoice)

Just like online shopping behavior, offline shoppers — in the omnichannel world — are more likely to seek consumer-generated content before purchasing in-store. And this is true for all categories — toys, games, appliances, baby products, health, electronics, or services — new shoppers look for ratings and reviews to qualify their buying decision before they actually decide to purchase in-store, indicating that small businesses succeed or fail even on the basis of digital marketing and social media marketing efforts.

Small Business Statistics: Characteristics And Habits Of Small Business Owner

26. 29% of small business owners say that the biggest reason for opening their own business is to be their own boss

(Guidant Financial)

From year to year, “to be their own boss” remains the most popular motivation for starting a new business, which does not come as a surprise as it allows individuals to achieve unlimited success and gives them a chance and opportunity to grow and develop.

According to survey conducted by Guidant Financial, the second most popular reason for starting a new business is dissatisfaction with the corporate US, which increased by 11% compared to the previous year; obviously, the Covid-factor comes in, given the struggles employees faced with corporate decisions during the pandemic, including lay-offs.

27. Millennials and Gen Z are 188% more likely to start a small business as a side hustle, compared to Baby Boomers

(Babson)

Just like the Baby Boomers, 48% of Millennials and Gen Zers get into small businesses to follow their passion, make a difference in the world, and get rich. However, the approach of Millennials and Gen Zers is different from the Baby Boomers.

The traditionalist — Baby Boomers — are more likely to quit their job when starting a small business. Whereas Millennials and Gen Zers are 188% more likely to start a small business as a side hustle. On the contrary, compared to Baby Boomers, entrepreneurs aged 18-24 are less likely to dive into entrepreneurship because of family traditions, which becomes a driver in older age groups (entrepreneurs aged 45-54).

28. 97% of self-employed professionals don’t plan to return to traditional work; 70% actively work to grow their business, so they do not have to work for someone else

(Freshbooks)

Out of the 15 million self-employed Americans, 14.5 million are not inclined to return to full-time work, regardless of challenges like not finding talented staff, new customers, or more money to reinvest. Likewise, 45% of Millennials, 47% of Gen Xers, and 61% of Baby Boomers want to work instead of retiring.

Nevertheless, it does not mean all self-employed individuals are satisfied with their business landscape. In terms of career satisfaction, only 71% of self-employed professionals are happy with the career-in-hand.

29. Small businesses with owners 55 and older are the most likely to survive but are the least likely to have employees.

(JP Morgan Chase)

The small business trends of the past few years report that 20% of new businesses closed within the first year of operation. Nearly half of SMBs (45.4%) withstood the test for five years, and only one-third lived to experience the decade.

And while there are numerous factors that decide whether small businesses survive or not, one pattern (predicted) is age.

JP Morgan Chase reports that a small business owner in their 30s has an 11.1% probability of exiting after its first year. In comparison, a small business represented by a 45-year old only has a 9.6% probability of withdrawing after the first year. Although the proportions remain near each other, it diminishes with the added age of owners. The experience and business strategy adopted by older individuals is the reason small businesses survive when led by someone over the age of 55.

The Future Of Small Business Statistics

30. After experiencing remote work benefits, small businesses have or will integrate the remote system into their daily business operations.

(Payscale)

After being forced to work from home, small business owners have realized the upsides of remote work. As much as 47% of small business owners believe in operating 25% of employees from home and will follow a similar business model to the pandemic.

31. 9% of growing SMBs are already using AI, while 44% are more likely to use AI within the next three years

(Salesforce)

Most small business owners believe that automation is the most prominent factor influencing revenue growth, and the best evidence to support this prediction is that — on average — small businesses rely on 20-50 SaaS tools with artificial intelligence and automation functions. That is why most small businesses are willing to increase their tech budget and more likely to invest in automated tools in the coming years to ensure business survival.

How Can These Small Business Statistics Help You?

Understand that these latest small business statistics, especially the revenue data, were influenced by the unique nature of the COVID-19 crisis, which brought on new challenges like muted demand and customers. But that isn’t to say small companies will perform similarly.

By nature, small businesses are scrappy and solvent, and they will overcome this recessionary environment soon, contributing the same, if not more, to the economy in the years to come.

Small business is a portal for many people to enter the economic mainstream. And if you happen to be an entrepreneur, visionary, inventor, or innovator looking to enter the business world — or someone already navigating uncharted waters — these important small business statistics will help you make better decisions.

Sources

1. Salesforce
2. WBENC
3. Payscale
4. JP Morgan Chase
5. Freshbooks
6. Babson
7. Guidant Financial
8. BazaarVoice
9. Bright Local
10. MintLife
11. Small Business Administration
12. Entrepreneur
13. FedSmallBusiness
14. International Labor Organization
15. United Nations
16. TheBalanceSMB
17. Fundera
18. FSB
19. Kauffman Firm Survey
20. UnsecuredFinances
21. US SBA Office of Advocacy
22. US Chamber of Commerce
23. American Innovators

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