The American economy depends on small businesses now more than ever. As of 2019, the majority of companies in the US are small businesses, which employ over 59 million workers. These statistics will help you understand what influences small business and how they impact the economy.
Small Businesses are bigger than you think.
While “small business” might make you imagine local family-owned shops on Main Street, the actual definition of a small business in the US describes a company that’s probably larger than you think. The U.S. Small Business Administration (SBA) defines a small business as having less than 500 employees. Small business stats show that most businesses in America have fewer than 500 employees. Furthermore, 89% of all businesses in the US have less than 20 employees.
The majority of businesses in the US are considered small businesses.
The American economy depends on small businesses. According to the SBA, there were 30.7 million small businesses in the United States as of 2019. That’s 99.9% of all US businesses! And new businesses are popping up every day. In fact, on average, about 543,000 new businesses are started each month, which adds up to more than 6.5 million per year.
Small businesses employ 59.9 million workers.
Almost 60 million people in the US, or 47.3% of the country’s workers, get their paychecks from small businesses, according to the SBA. Over the last five years, small businesses created a net of 6.8 million jobs, around 1.5 million annually, which is 4.1 million more than the 2.7 million new jobs large companies created, according to Value Penguin.
Women own 45% of all US businesses.
As of 2012, the US was home to 9.9 million businesses owned by women, with another 2.5 million companies that split ownership between men and women, according to the SBA. This means that 12.3 million firms, or 45% of all classifiable firms, were at least 50% women-owned. According to 2017 data from the National Association of Women Business Owners, women-owned businesses generate around $1.7 trillion in sales and employ nearly 9 million people.
Around 8 million businesses are minority-owned
As of 2012, 8 million businesses (29.3%) in the United States were minority-owned. According to the SBA, these Minority-owned businesses also employ around 8.7 million workers. Of these, 12% were Hispanic-owned, 10% were Black- or African American-owned, 7% were Asian- owned, American Indians and Alaska Natives owned 1%, and Native Hawaiians and other Pacific Islanders owned 0.2%.
50% of all small businesses are home-based
The share of home-based businesses has remained relatively constant over the past decade, at about 50% of all firms, according to a 2018 report from the SBA. But it would be safe to bet that these numbers will likely rise within the next few years. Information, construction, and professional, scientific, and technical services are the industries in which home-based businesses are most prevalent.