Running a small business comes with many challenges, especially in today’s economic landscape. Despite hurdles like recent inflation spikes and supply chain disruptions, some small businesses are not just surviving; they’re thriving.
In fact, 77% of small business owners are confident their businesses will survive the current economy.
In this post, we’ll explore key small business revenue statistics and other insights into how small business owners are achieving success. Comparing your business’s performance to these benchmarks can help you identify areas for improvement and develop data-backed strategies to reach your business goals.
The Big Picture: General Small Business Stats
According to the Small Business Administration (SBA), a small business is defined as any business with fewer than 500 employees. While that number may seem, well, small, these businesses are the backbone of the economy, and their ability to thrive even in challenging economic conditions is a testament to the ingenuity and resilience of entrepreneurs.
- In the U.S., 99.9% of all companies are small businesses, totaling over 33 million individual companies.
- Small businesses in the United States earn an average annual revenue of $1,221,884.
- Small businesses have created 62.7% of all new jobs since 1995.
- Small business owners bring in an average annual salary of $69,647, exceeding the national average wage by 6%.
- Small businesses bring in close to half (43.5%) of the United States’ gross domestic product.
- Small businesses generate 32.6% of the known value of U.S. exports.
- 35.6% of all private sector revenue comes from small businesses, totaling $13.3 trillion.
The People Behind the Business: Ownership Statistics
The beauty of America lies in its diversity. Almost anyone — regardless of race, gender identity, or age — can start a business venture and be their own boss. This is truer than ever today, as the ownership landscape is becoming more inclusive. Let’s take a closer look at small business ownership data.
- As of 2019, 12,338,407 small businesses were women-owned, employing almost 10.8 million employees and bringing in $2.1 trillion in sales.
- Black business owners owned 3,589,567 small businesses in 2019, employing over 1.2 million people and making $217.3 billion in sales.
- Almost 5 million businesses are currently Hispanic-owned, employing approximately 3 million workers and representing a 34% increase in Hispanic business owners over the decade before the COVID-19 pandemic.
- Small businesses owned by Asian American Pacific Islanders reached over 3 million, employing over 5.2 million people and accounting for $958.8 billion in sales.
- By 2021, 27.3% of all small businesses were family-owned, and the majority (72.8%) had fewer than 10 employees.
- Between 2023 and 2024, the number of millennial small business owners increased by 27%, while the number of baby boomer-owned small businesses dropped by 7%.
- Among new small businesses in 2024, 58% are independent, and 42% are franchises.
Weathering the Storm: Economic Challenges
Small businesses are often the most vulnerable to economic downturns. Challenges they face include inflation spikes, interest rate hikes, supply chain disruptions, labor shortages, and overall economic uncertainty. These statistics highlight how American small businesses are faring in the current economic climate.
- Nearly two-thirds (approximately 65.3%) of small businesses in the United States were profitable in 2022.
- Top concerns of small business owners include inflation and supply costs (75%), cost of healthcare for employees (69%), increased interest rates (57%) and workforce shortages (53%).
- To stay afloat, 70% of small business owners have made sacrifices for their business, resorting to measures like raising prices (47%), working longer hours (45%), and even cutting their own salaries (32%).
- Over 46% of the $368 billion in small business loans in 2019 were under $100,000, suggesting a significant reliance on credit cards, which can strain profit margins across industries.
- Artificial intelligence statistics show that AI is not being applied to business operations in 83% of small businesses.
- According to a survey from the National Federation of Independent Business (NFIB), 30% of businesses reported declining profits in May 2024.
On the Rise: Small Business Growth Trends
Amid economic uncertainties, small businesses that have shown remarkable resilience share a few common traits. First and foremost, they exhibit incredible adaptability. By quickly responding to the changing demands of consumers and finding innovative ways to deliver their services or products, these businesses have managed to stay ahead.
- Small businesses are responsible for 62.7% of net new job creation since 1995, with 17.3 million net new jobs created between 1995 and 2021.
- 55% of small business owners achieved higher business revenues in 2023 than in 2022.
- In 2024, staff expansion tops business priorities (24%), followed by digital marketing (18%), with fewer focusing on remodeling (17%) and traditional marketing (10%).
How To Boost Small Business Revenue: 4 Tips
As the statistics above show, owning a small business in today’s economy is no easy feat. Check out these tips for unlocking your revenue potential.
- Plan ahead: It’s safe to say you can expect disruptions in your supply chain at some point. These disruptions can have a major impact on your operations, potentially damaging customer and business relationships. Monitor your inventory levels closely and stay up-to-date on supplier performance and industry trends so you can anticipate potential issues and develop mitigation strategies proactively.
- Know your customers: Though this should go without saying, having a deep understanding of your target audience is essential to business success. Focus on a specific niche so you can tailor your offering and develop a targeted marketing strategy to reach your desired customers.
- Monitor your finances: Profitability hinges on managing your expenses effectively. Monitor your financial performance to see where you’re falling short and lean into opportunities that are more lucrative to bolster cost optimization.
- Measure KPIs: Identify which key performance indicators (KPIs) are most important for your business and keep a pulse on your business’s performance in those areas. These data-driven insights can help you create strategies for growth.
Bottom Line: The Future Is Small
By being adaptable, embracing technology, focusing on customer experience, and fostering community support and collaboration, small businesses can navigate through uncertainties and emerge stronger.
As we continue to witness these successes, it’s clear that with the right approach and strategies, small businesses can not only survive but also flourish, contributing significantly to the economy and generating employment opportunities. It’s an encouraging reminder that even in tough times, innovation and community can lead to extraordinary outcomes.
Samantha Edwards is a San Diego-based editor and writer. Her background in journalism and public relations has led her to cover unique topics ranging from timeshares to pet lifestyle to local news to small business statistics. When she’s not writing, you can find her walking her dog, baking, or traveling.