Although small businesses are the backbone of the American economy, large multinational corporations and internet behemoths frequently receive attention.
According to current research, small companies not only produce the majority of employment in the United States but are also a key source of innovation, economic development, and national wealth.
However, the top small business statistics for 2022 offer more than reveal what works and what doesn’t.
They provide light on the future’s direction, which is critical for individuals trying to establish and maintain a firm.
Statistics on Small Business Employment
1. Small companies account for 99.9% of all enterprises in the United States:
Though the nation’s most prominent firms get the most attention, the truth is that most enterprises in the United States are small businesses, according to the US Small Business Administration.
In reality, there are 33.2 million small enterprises in the United States.
2. A small firm employs over half of all Americans:
Even though over 80% of small firms have no employees, 61.7 million people are employed by small enterprises.
- That equates to 46.4% of all U.S.U.S. employees—a massive number of workers when fewer than 20% of small enterprises have employees.
- It demonstrates how critical small company development is in a country that relies significantly on them for employment and, by extension, survival.
3. More than eight out of ten small enterprises need workers.
According to the report, 27.1 million of the 33.2 million small enterprises are owned by a single owner and have no workers.
4. Only 16% of small enterprises have one to nine workers.
- While most small enterprises have no workers, 16% have between one and 19 employees.
- And, of the 33.2 million small firms, just 650,003 employ between 20 and 499 people.
Creating Jobs in Small Businesses
5. Over the previous 25 years, small enterprises have created over 12.9 million employment
Even though a single person runs a typical small company, small enterprises supply many job possibilities in the United States.
- Small enterprises have created approximately 13 million new employment over the last 25 years.
- To put this in context, it equates to around two-thirds of all new work completed in the economy.
6. The professional and business services sector added almost 1.1 million new employment in the previous year alone
The professional and business services sectors have produced the majority of new employment in the recent year, accounting for almost one million new positions.
- On the opposite end of the scale, and perhaps unsurprisingly in the aftermath of a pandemic, the leisure and hospitality sectors suffered significant employment losses.
- In general, the labor market has improved over the last year, with employment growing by 5.8 million—240,000 more than in February 2020.
7. The education and health services business has the most significant employment opportunities.
It’s no secret that individuals working in education and health care are in great demand, thanks partly to a scarcity of qualified candidates.
- The Education and Health Services business has the most job vacancies right now.
- Individuals might take this as a sign of a viable career and employment stability.
- For companies, however, this implies that those joining these areas should expect to spend considerably recruiting and maintaining employees.
8. Home health and personal care are the industries with the most significant projected employment growth
While education and health services now have the most employment opportunities, the home health and personal care business is predicted to increase the most.
- It is expected to rise at an astonishing pace of 924% during the following decade.
- It illustrates anticipated expansion in the home health and personal care businesses, which are expected to expand in demand as the elderly population grows disproportionately faster than the younger generations.
9. The leisure and hospitality business saw the most significant employment loss
The Leisure and Hospitality business has shed 633,000 jobs since February 2020. However, the sector now has a fantastic chance to recover from the epidemic.
- Travel has not only returned, but the urge to travel has substantially risen due to stay-at-home orders and limited foreign travel limitations.
10. Washington, D.C. and New York have the highest unemployment rates in the country
According to the latest available figures, the District of Columbia has the highest unemployment rate, at 5.1%.
New York is close behind at 4.7%. Meanwhile, Minnesota has the lowest unemployment rate, at only 1.9%.
11. Rural states continue to have the lowest unemployment rates
While unemployment rates in D.C. and New York skyrocketed, Arkansas, Nebraska, and Oklahoma were the most stable, virtually retaining the previous year’s jobless rates.
- It might point to a link between primarily rural states, population density, and unemployment rates, with states with a high population density having a greater risk of experiencing higher unemployment rates.
12. In 2023, just 14% of employment lost during the epidemic will be regained
Employment in the United States is predicted to grow by 1.3 million next year. Granted, this comes on the heels of massive employment losses caused by the epidemic.
- According to the Bureau of Labor Statistics, 9.6 million jobs were lost in the United States due to covid between May 2020 and September 2022.
- In other words, anticipated employment growth for 2023 is still just a fraction of what was lost during the epidemic.
- It shows that although the country is recovering, it still has a long way to go.
13. Only 87% of employment lost during covid will be regained by 2031.
According to projections, the United States will take more than a decade to recover from the pandemic’s employment losses completely.
- According to current forecasts, employment is predicted to expand by 8.3 million by 2031. It represents just 87% of the 9.6 million jobs lost during the epidemic.
14. Healthcare and social assistance are the fastest expanding sectors.
The healthcare and social support businesses not only have the best survival rate of any industry but are also the fastest expanding.
15. Individual and family services will create the most employment in 2015
Individual and family services have the highest projected growth, with over one million jobs added between 2019 and 2029.
- Computer systems and design is expected to create about 574,000 jobs in the next ten years, making it the sector with the country’s second most considerable employment growth.
Wages and Salaries in Small Businesses
16. The average compensation of a small company owner is just 3% more than the yearly mean earnings in the United States
Although company owners and entrepreneurs are among the wealthiest persons in the world, the average small business owner’s pay is just 3% more than the national average mean earnings of $58,260, at $60,151.
- The typical company owner’s compensation varies widely; according to Payscale pay rate statistics, small business owners make an average salary of $29,000 on the low and $128,000 on the high end.
17. Hourly wages have climbed by more than 5% in the recent year
Hourly wages have climbed by 5.2% year on year. In August, the average weekly hours declined by 0.1 to 34.5 hours.
- Meanwhile, the annual inflation rate in the United States for the last year has been 7.7%, implying that the growth in yearly wages is not proportional to the growing inflation rate.
Statistics on Small Business Ownership
18. Millennials control just 7% of small enterprises in the United States
Even though the millennial age is often regarded as very entrepreneurial, millennials control just 7% of small enterprises.
Gen Z lags behind millennials in small company ownership, accounting for just 1%.
- Meanwhile, most small firms are held by Baby Boomers and Generation X, highlighting “the generation divide” in company ownership.
- The average age to start a company is 35 years old, so the younger generation may need a little more time for reality to catch up to their dream of running a business.
19. Males own more small enterprises than females
Although the gender gap is closing, women own just 43.2% of small enterprises. Minority groups hold 19.4% of small businesses, with Hispanics owning 13.8%.
- Veterans are one of the most minor represented groups, accounting for just 6.4% of small companies in the United States.
Statistics on Online and E-Commerce Businesses
20. Nearly one-third of firms still need a website.
Although websites are becoming easier—and more affordable—than ever to construct and maintain owing to code-free website builders and vast internet resources, only 71% of companies have one.
- Among the roughly one-third who choose not to have a website, 20% say they use social media.
- However, this is not a frequently recommended strategy since millions of people use Google to find companies, from picking where to eat to purchasing a car.
21. More than a quarter of all commerce is handled online
Still, trying to convince myself that a company website is essential? There were 230.5 million internet consumers in 2021.
- More than a quarter of all commerce is done online.
- As the epidemic restricted people’s mobility, more shoppers turned to the internet to purchase clothing and shoes and food, booze, prescription prescriptions, therapy, and other necessities.
22. More than three-quarters of buyers consult a company’s website before visiting its physical presence
Just because a company works in person does not imply it does not need a website.
76% of online customers consult a company’s website before visiting a physical store or location.
- As shocking as it may seem, the web has become the first destination for customers.
- It is excellent news for brick-and-mortar companies since you don’t have to rely only on foot traffic or word of mouth to get consumers or clients through the door.
Small Business Expenses
23. Labor is the most expensive expenditure for enterprises, accounting for 70% of total spending
Labor is the most expensive aspect of most firms. It accounts for 70% of a company’s expenditure, a sizable chunk of the pie.
- As a result, it’s not surprising that one of the first places a firm tries to cut expenses is personnel, whether via layoffs, outsourcing to more inexpensive workers abroad, or using technologies that help minimize the number of hands-on decks a business needs to run.
24. Inventory is the second most expensive expense for small enterprises
Inventory is the second most expensive expenditure for firms after labor, accounting for 17 to 25% of the total budget.
- Though inventory should lead to income in the long run, it is a significant upfront investment for small enterprises on a limited budget.
- As a result, the popularity of drop shipping continues to rise, as do lower minimum quantity orders to decrease the initial investment and storage space required—not to mention the risk of damage or inventory spoilage.
25. Advertising contributes to just 1% of a company’s income
It’s usual to hear about massive advertising expenditures and campaign spending, although advertising accounts for about 1% of the average business’s income.
- Social media is currently one of the most popular advertising mediums, with 55% of firms utilizing it.
- It is most likely owing to the value of a pay-per-click ad platform, in which advertisers only pay when viewers engage with their ad, the simplicity of use of those platforms, and the sheer accessibility they provide to companies of all kinds and budgets.
26. According to reports, more than half of all small firms have reduced their expenditure
Rising inflation and labor expenditures imply that the cost of conducting business is growing from every viewpoint, from increased human capital expenses to supplies and shipping to property taxes and building upkeep and utilities.
- As a result, 57% of firms decreased expenditures in the previous year.
- Predictably, businesses seek various strategies to decrease expenses and minimize overhead.
- For example, while some companies went completely remote (eliminating costly office space and standard in-office perks such as free snacks and drinks), others sought more affordable manufacturing contracts or suppliers.
- Still, others used artificial intelligence to reduce downtime and increase productivity.
Statistics on Small Business Survival
27. In the previous year, almost 180,000 more small firms started than closed
According to statistics from the US Small Business Administration, nearly 1.1 million new small companies were established between March 2020 and March 2021. (S.B.A.).
- That is 180,528 more small companies that opened then closed over this period.
- This rise demonstrates a promising trend toward company ownership and a move toward entrepreneurship in the aftermath of the epidemic and massive employment losses.
28. One out of every five firms fails during the first year
You’ve probably heard the statistic that 50% of all companies fail. However, this is just a partial image.
- To grasp the whole picture, consider that 20% of enterprises fail in the first year, 30% fail in the second year, and 50% fail by year five.
- It demonstrates how crucial the first five years of a new enterprise are.
29. Due to a lack of market demand, about half of all firms fail
42% of all enterprises that fail during the first five years fail to owe to a lack of market demand.
- It demonstrates how critical it is to have market evidence before embarking on a new enterprise.
- Furthermore, it may highlight a gap in marketing when there is a need but a lack of knowledge, resulting in little to no desire for the particular firm, its services, and its goods.
30. The second most prevalent cause of small company failure is a lack of finance
At 38%, the second most prevalent cause of small company failure is a lack of money.
- Starting and sustaining a small business is costly; therefore, business owners must have saved enough money to cover operational expenditures for the first few years until the company grows and produces a profit rather than operating at a loss.
31. The failure rate in the professional, scientific, and technological services business is the greatest
In terms of first-year failure rates, the professional, scientific, and technical services sector has the highest rate at 19.4%.
- The instability of this ever-changing and continually progressing market is undoubtedly a contributing factor, as it not only influences new product and service acceptance rates but may also be a shifting target for enterprises.
32. The healthcare and social support sectors have the most incredible survival rate
The healthcare and social support businesses, on the other hand, have the most incredible survival rates.
- In contrast to the scientific and technological services market, there is typically a clear need for enterprises in the healthcare arena, and although it is constantly evolving, demand always remains strong.
What do these figures imply for small businesses?
Looking at company data may provide a lot of information for small firms.
Not only does data give information on the overall business climate—the environment in which all firms operate—but statistics can also be used to assist businesses in better preparing for the future, depending on the direction the data is going.
Of course, although each firm may interpret and utilize the data differently, this might offer one small business an advantage over another.