Small businesses employ nearly half of America’s workforce and account for 43.5% of America’s GDP. They are an important part of the economic ecosystem where large and small businesses are vendors, employees, partners, and customers of each other.
Small businesses revitalize the economy.
99.9%
Percentage of U.S. companies are small and medium-sized enterprises
33.2M
small and medium sized businesses in the usa
Data from the 2023 SBA Office of Advocacy FAQs for Small Businesses.
Since the late 1990s, small businesses have accounted for 43.5% to 50.7% of the U.S. gross domestic product (GDP), representing trillions of dollars of economic activity. In 2014, the most recent data available, small businesses generated approximately $5.9 trillion. By comparison, large corporations generated $7.7 trillion in national GDP in the same year.
Small businesses are large employers.
45.9%
of Americans are employed by small businesses
61.6M
Americans are employed by small businesses
The majority of small businesses (82%) operate without employees, and small employers with employees employ nearly half of the U.S. workforce. Key industries for small and medium-sized enterprises include professional and business services, financial activities, and wholesale and retail trade, with between 3.5 million and more than 7 million businesses in each sector.
The chart below shows how companies contribute millions of jobs over time. For example, all small businesses that employ 10 to 19 people collectively add more than 500,000 jobs to the U.S. economy over a 10-year period. And small businesses pay a lot. On average, small businesses pay their employees $30.42 per hour, which equates to $63,000 in annual revenue.
Entrepreneurship is booming in the United States. In recent years, there has been a sharp increase in the number of applications submitted to start new businesses. Filings doubled in 2020 compared to the previous year, and the trend has continued ever since, with more than 5 million new business applications filed each year. As of April 2024, 1.75 million applications have already been submitted this year.
Check out the interactive map below that tracks the latest data on the surge in entrepreneurship in each state and county across the country.
Click on a state to see details.
State Select a state Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Mexico New Mexico New York North Carolina North Dakota and Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming
Business Application Growth Rate December 2022 to December 2023
<0
0-15
15.1-30
30.1-45
45.1+
Honoring America’s Top Small Businesses
Small businesses are innovative.
Data from the Small Business Administration (SBA) shows that small businesses have historically filed the majority of patents. Companies with 5 to 9 employees have more patents per employee than any other company, nearly twice as many patents as large companies in 2016. In the same year, small employers (1-4 employees) filed more than 270 patents per employee, or more than 10 patents. Percentage of all patents filed in that year.
2022 SBA Office of Advocacy Data “The Facts: Small Business Innovation as Measured by Patent Activity.”
Ownership of small businesses is diverse.
The innovation and diversity of small businesses is a reflection of the entrepreneurs behind them. More than 40% of small business owners are women, and 4 in 10 small business owners are foreign-born.
One in five is owned by racial minorities, with Hispanics making up the majority. In fact, according to the SBA, Hispanic owners own one in four new businesses. Collectively, Hispanic-owned businesses pay more than $100 billion annually to 1 million employees.
Small businesses are resilient.
Despite facing headwinds such as inflation and the ongoing labor shortage crisis, small businesses have proven themselves to be resilient time and time again.
This year, the majority of small business owners remain cautious about the country’s economic outlook but report that their businesses are doing well, according to the MetLife and U.S. Chamber of Commerce Small Business Index.
65%
Small business owner claims his business is in good shape
67%
Small business owners say they are satisfied with their cash flow
Small businesses struggle to find and retain talented workers.
Labor shortages are a major headwind facing small business leaders. There are currently 8.5 million jobs available in the United States, but only 6.5 million unemployed people are needed to fill them.
41% of small business leaders say they struggle to fill job openings, and more than 90% say they struggle to find qualified applicants.
The battle to find the right workers intensifies, with 45% of small businesses saying they looked for new talent in 2023, up from 33-36% of respondents in 2021. Small businesses report using a variety of tactics to attract new talent. These include offering flexible working hours (68%) and offering hybrid or remote work options (48%).
Small businesses are leveraging AI.
The latest edition of the U.S. Chamber of Commerce’s Empowering Small Businesses report explores how various technology platforms are playing a critical role in helping small businesses overcome challenges such as labor shortages and inflation, and how technology Highlights how small and medium-sized businesses that take advantage of .
Companies are also looking to add emerging technologies such as AI to their arsenal of digital tools to compete and expand their businesses. Nearly all (95%) small businesses in the United States report using at least one technology platform.
87%
Small and medium-sized businesses report increased efficiency thanks to technology platforms
one quarter
Small businesses leverage artificial intelligence (AI)
Small business owners access capital from a variety of sources to grow their businesses.
Access to growth capital is a perennial challenge for small businesses. Historically, startups and the smallest businesses (0-4 employees) have used personal savings to fund their operations.
Growing companies and large small businesses rely primarily on credit cards, local banks, and credit unions to finance their operations. The largest small businesses rely on national banks to finance their growth.
33%
Launch your business for less than $5,000
58%
Launch your business with less than $25,000
Small business owners say loan applications are time-consuming, there is little information available about funding sources, and the biggest barrier to financing is simply not being eligible.
How the U.S. Chamber of Commerce supports small businesses.
The U.S. Chamber of Commerce has a long history of supporting and advocating for small businesses. We work every day to give small businesses a bigger voice in Washington, connect entrepreneurs with federal officials, and advocate for policies that help small businesses grow, not hinder them.
Our Small Business Council is made up of 100 small business owners from across the country who regularly visit Capitol Hill and lead our efforts to advocate for policies that keep Main Street businesses thriving. I am.
Since 2017, we have partnered with MetLife Life to track small businesses on a quarterly basis in the Small Business Index. This provides valuable insight into the current challenges and opportunities for small businesses that will help us make our case in Congress.
Through our small business platform CO-, which helps nearly 20,000 businesses every day and received over 6 million site visits last year alone, we help small businesses to ensure resilience in the face of any challenge. We provide the tools and insights you need. .
Learn more about the U.S. Chamber of Commerce’s small business activities. If you have any questions regarding small business policy, please contact Tom Sullivan at tsullivan@uschamber.com.
Looking for the latest small business outlook?
Every week, the U.S. Chamber of Commerce’s deputy director for small business policy summarizes the latest data and what it means for the health of America’s small businesses.
About the author
Stephanie Ferguson
Stephanie Ferguson is Director of Global Employment Policy and Special Initiatives. Her research on labor shortages has been cited in the Wall Street Journal, the Washington Post, and the Associated Press.
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makinidge hoover
Makinizi Hoover is a senior manager in the Strategic Advocacy Division at the U.S. Chamber of Commerce. Her work includes the development and project management of comprehensive data centers that serve as valuable resources for policymakers, businesses, and the general public.
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isabella lucy
Isabella has created amazing visualizations that address pressing issues such as the worker shortage, the benefits of hiring veterans, the longevity of small businesses, and the future of work.
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