Small Business Statistics 2024 – NerdWallet

According to the SBA, as of 2023, there will be 33.3 million small businesses nationwide, employing more than 61.6 million people. Small businesses, a valuable driver of the U.S. economy, have experienced unprecedented changes since the COVID-19 pandemic, but not all of them have been negative.

Federal agencies such as the Small Business Administration, Census Bureau, and Bureau of Labor Statistics oversee nearly every aspect of the small business economy. Research from nonprofit and private organizations can help clarify the picture. The small business statistics below provide a snapshot of the U.S. business environment as of 2024.

According to the SBA, there will be 33.3 million small businesses nationwide in 2023, employing more than 61.6 million people.^[0]

Since the start of the COVID-19 pandemic, we have seen an unprecedented and significant increase in new business applications in the years since 2021, with 16 million applications and 2.8 million new businesses established since 2021. it was done.

Minority- and women-owned businesses have contributed significantly to the increase in small business creation. Black- and Latino-owned businesses experienced the fastest growth, with business ownership increasing from 5% to 11% and 7% to 10%, respectively, between 2019 and 2022.Also, from 2019 to 2023, the growth rate of women-owned businesses outperformed men's businesses by 94%.^[0]

Small businesses created 17.3 million net new jobs between 1995 and 2021, accounting for 62.7% of net new jobs created since 1995, according to data from the Bureau of Labor Statistics.^[0]

Small business employment has been hit hard by the pandemic, with a net loss of 8.6 million jobs in the second quarter of 2020, according to data from the Bureau of Labor Statistics. However, between March 2021 and March 2022, small and medium-sized enterprises created 4.9 million jobs, accounting for 70% of all new jobs during this period.While the effects of the pandemic are still being felt among small business owners, this data provides an encouraging view of small business resilience.^[0]

Entrepreneurship is not for the faint of heart. According to data from the Bureau of Labor Statistics, approximately 20% of new businesses close within their first year. Most companies succeed in the short term, but only a few can sustain themselves in the long term. BLS data showing the number of businesses that opened in March 2013 revealed that 34.7% of those businesses will remain open in his 2023. This means that 35% of new businesses were able to reach their 10th anniversary.^[0]

In fiscal year 2023, SBA provided $27.5 billion through more than 57,300 businesses. 7(a) Loan To small and medium-sized enterprises. Nearly 70% of those loans were for loans of $350,000 or less, the SBA reported.

Small business owners received $87 million SBA Microloan Loans began in fiscal year 2023, with $43.5 million of them going to Black- and Latino-owned businesses.

As of October 2022, more than 10.5 million PPP loans have been applied for forgiveness. Of those, 93% have been partially or fully forgiven, according to metrics collected by the SBA.

The SBA's Deposit Guarantee Program, which helps small businesses, especially those in historically underserved areas, compete for government contracts, will provide contract awards to small businesses in fiscal year 2023. Contributed to distributions of $7.3 billion. Of this amount, 62% of the total amount was allocated to small and medium-sized enterprises. The SBA's Office of Guarantees and Guarantees said the money went to small business owners in underserved areas.^[0]

Approximately 22% of all employer businesses in 2021 were run by women, according to the Census Bureau's 2022 Annual Business Survey.Approximately 1.3 million Women-run business It employed 10.5 million people.

According to the same Census Bureau study, 21% of all employer businesses in 2021 minority owned business. Among these, Hispanic-owned businesses recorded a growth of just over 8% from 2020 to 2021.^[0]

As of 2019, more than 21% of all U.S. business owners were immigrants, according to data from New American Economy. And as of 2017, immigrant-run business employs 8 million people^[0]

According to the SBA Office of Advocacy, the pandemic has caused 9.6% of small businesses in the leisure and hospitality sector, including restaurants, hotels, and arts and recreation, to close, leading to a loss of 41.1% of employees. Other service sector businesses such as repairs, dry cleaning and laundry, personal care and pet care suffered a loss of 9.3% as well. However, the loss of employees was only 22.1%.

The number of new business applications increased across all sectors, but the retail industry was the biggest driver of this growth, increasing from approximately 525,000 applications in 2019 to approximately 1 million in 2021.

The Advocacy Office attributes some of this increase to structural changes in the market due to the pandemic, which has disrupted many sectors. e-commerce And remote work. Not only has this removed the “existing advantage” of existing businesses incurring additional costs to adapt to the online economy, but it has also made it more affordable to do business. start a business.

Transportation and warehousing also experienced an explosion in business applications, growing 100.7% from 2019 to 2021. Although it is possible to draw a correlation between this increase and the increased demand for e-commerce products, the Advocacy Bureau points out that such structural changes are at play.Does not take into account the growing number of applications in all business areas^[0]

According to a monthly survey conducted by the National Independent Business Research Foundation, nearly a quarter of small business owners say: inflation It's the most important business problem they face today. While this number is still significant, it is down from about a third of respondents in 2022.

The same NFIB survey revealed that 40% of small business owners struggle to fill vacancies. Among business owners who reported actively hiring or looking to hire in December 2023, 49% cited a lack of qualified applicants.Behind inflation, the quality of workers was his second most important issue facing managers^[0]

The majority of small business owners are feeling the effects of: supply chain issues According to Bank of America's 2023 Small Business Owner Report, 19% reported losing customers as a result, so it's having some impact.

The same 2023 report from Bank of America found that despite tough economic conditions, 65% of small business owners expect revenue to increase next year.

A Bank of America report found that more than half of small business owners surveyed expect to eventually digitize the way they do business. accept payment. Meanwhile, of his 56% of business owners who say cybersecurity threats are impacting their business, a quarter are cutting back on digital tools such as payroll, banking, payments and information storage. We are responding to these threats by:^[0]

21.6% of SMEs still feel a significant negative impact on their business as a result of the pandemic (as of April 2022), up from 31.8% of SMEs who felt such an impact earlier in the pandemic. is improving. (between August and September 2020), according to data collected by the Census Bureau.^[0]

The NerdWallet survey of more than 300 U.S. small business owners was conducted online by Harris Poll from April 26 to May 1, 2023. The survey asked about companies' general banking habits and the impact of bank failures such as Silicon Bank in 2023. Valley Bank and Signature Bank, for business owners. Read the entire research methodology.

Among small business owners with a business banking account, 52% use only one bank for their account, 39% use two banks, and 10% use three or more banks.

Silicon Valley Bank and Signature Bank Failed in March 2023. According to a NerdWallet survey, 60% of small business owners say recent bank closures have not affected their business.

Only 13% of small business owners said they opened a new bank account as a result of recent bank failures, but 25% said they considered moving their business account to another bank.

Due to the recent bank failures, 4% of small business owners' salaries were delayed.

Among small business owners with business banking accounts, 14% report total business banking account balances of less than $10,000. Another 13% said that from $10,000 he has $24,999.

Meanwhile, 55% say they have more than $50,000 in all of their business bank accounts. Also, 23% report that he has more than $250,000 in deposits.

If you have more than $250,000 in cash in the bank, it's important to spread it across multiple bank accounts. The Federal Deposit Insurance Corporation only insures up to $250,000 per account in the event of a bank failure.