Small businesses remain a vital and highly regarded part of the U.S. economy. According to Pew Research, 86% of U.S. adults feel small businesses positively impact the country, ranking them higher than even the military or religious institutions. Small businesses are everywhere: they make up 99.9% of U.S. firms, according to the Small Business Administration. Out of 33 million small businesses, only about 6 million have employees, yet they provide nearly half (46%) of private-sector jobs.
Among these small businesses with employees, most are genuinely small — nearly half have only one to four employees, while just 1% employ over 100 people. Altogether, small businesses employed 56.4 million workers in 2021 and generated $16.2 trillion in revenue, with larger small businesses contributing more heavily to overall revenue.
Ownership demographics highlight diversity in small business leadership. While 61% of small businesses are majority-owned by men, 22% are majority-owned by women, and 14% have equal male-female ownership. Family ownership is limited, with just 27% being family-owned and only 10% jointly owned and operated by spouses.
However, these promising numbers also contrast sharply with the “silver tsunami” forecast, where a massive wave of business owners nearing retirement age may lead to widespread ownership transitions or closures. This shift poses challenges as more than 50% of business owners are aged 55 and older, many of whom may look to retire without clear succession plans. This wave could affect small business continuity, the workforce, and local economies if these firms lack buyers or successors.
Despite these challenges, entrepreneurial spirit remains resilient. Business applications surged to nearly 1.8 million in 2023, with states like Florida, California, and Texas leading in volume. Smaller states, like Delaware and Wyoming, show the highest applications per capita, underscoring a widespread drive toward business creation across the nation, even as the economy prepares for the impacts of an aging generation of business owners.
