Small Business Statistics 2026: Count, Jobs & Failure Rate
99.9% of US businesses are small, a figure that says more about the definition than about the corner shop. The SBA counts any independent business with fewer than 500 employees as small, and 82.3% of the businesses it counts have no employees at all (SBA Office of Advocacy, 2026). Here are the small business statistics worth knowing in 2026, each sourced inline with the year noted.
99.9% of businesses are small because “small” means under 500 employees
36,207,130 small businesses operate in the United States, against 21,041 large ones (SBA Office of Advocacy, 2026). The February 2026 edition builds that count from the Census Bureau’s 2022 business data, so the “2026” figure describes 2022.
29,811,495 of those small businesses, or 82.3%, have no employees, and 6,395,635 have a payroll (SBA Office of Advocacy, 2026). A business with 499 employees counts as small, and so does a one-person business with $1,000 in annual receipts, the floor for the Census Bureau’s nonemployer count.
63.0% of employer firms have fewer than five employees, and 89.4% have fewer than 20 (Census Bureau Statistics of US Businesses, 2022 data, released April 2025).
At the other end of the definition, 93,341 small firms with 100 to 499 employees employ 18.3 million people, 29.4% of all small business employment (Census SUSB, 2022). When a statistic says small businesses employ almost half the workforce, those mid-sized firms carry nearly a third of it.
Most small businesses are one person, and there were 32 million of them in 2024
31,985,874 nonemployer businesses operated in the US in 2024, with $1.86 trillion in receipts (Census Bureau Nonemployer Statistics, 2024 data, released September 29, 2026). That is about 2.2 million more than the 2022 nonemployer count behind the SBA’s 36.2 million total.
86.4% of nonemployer businesses are sole proprietorships (Census Nonemployer Statistics, 2024).
Transportation and warehousing is the largest nonemployer sector, at 4.48 million businesses, including 1.6 million in taxi and limousine service, the industry that holds rideshare drivers, and 1.6 million couriers and messengers (Census Nonemployer Statistics, 2024). The nonemployer count has roughly doubled since 1997, when it stood at 15.4 million (SBA Office of Advocacy, 2026). The people behind those numbers are covered in freelancer statistics.
Small businesses employ 45.9% of private-sector workers
62.3 million people work for small businesses, 45.9% of private-sector employees (SBA Office of Advocacy, 2026).
2,262 companies with 5,000 or more employees employ 49.3 million people, 36.3% of private-sector employment (Census SUSB, 2022). The 6.37 million small employer firms together employ only about 13 million more.
61% of net new jobs from January 1995 to December 2024 came from small businesses: 20.7 million, against 13.2 million from large businesses (SBA Office of Advocacy, 2026, from BLS Business Employment Dynamics). The SBA notes that a firm’s gains count as small-business gains until it crosses 500 employees.
38.7% of private-sector payroll, or $3.5 trillion, is paid by small businesses (SBA Office of Advocacy, 2026).
The 43.5% of GDP figure is a 2014 number
43.5% of US GDP comes from small businesses, according to the SBA’s 2026 FAQ (SBA Office of Advocacy, 2026). The source the FAQ cites is the Office of Advocacy’s Small Business GDP, 1998-2014 report, published in December 2018, which found the share fell from 48.0% in 1998 to 43.5% in 2014. No newer estimate has replaced it, so cite it as a 2014 figure.
97.2% of US exporters, 270,014 businesses, are small, but they account for 33.0% of known export value (SBA Office of Advocacy, 2026).
28.8% of federal contracting dollars went to small businesses in fiscal year 2024, above the 23% government-wide goal (SBA Office of Advocacy, 2026).
About 1 in 5 new businesses closes in year one, and half last five years
22.1% of private-sector establishments that opened in the year ended March 2024 had closed a year later; 77.9% survived (BLS Business Employment Dynamics, data through March 2025).
First-year survival has stayed between 75.2% and 80.9% for every opening cohort since 1994, with the low in the 2008 cohort and the high in the 2020 cohort (BLS Business Employment Dynamics, data through March 2025).
51.4% of establishments that opened in the year ended March 2020 were still operating five years later (BLS, data through March 2025).
34.7% of the 2015 cohort survived ten years, and 19.5% of the 2005 cohort survived twenty (BLS, data through March 2025).
BLS counts establishments, meaning individual locations with employees, not whole companies, and the series covers every private employer, not only small ones. In practice it is a small-business series: the average establishment that opened in the year ended March 2025 started with 3.6 employees (BLS, data through March 2025). No comparable government survival series exists for the 32 million businesses with no employees.
“Half of small businesses fail in the first year” and “90% of small businesses fail” are not in any government series. On the BLS data, roughly one in five closes in year one, about half by year five and about two-thirds by year ten.
Closing is not the same as failing. About one-third of closed businesses were successful at closure in Census Bureau data on firms started from 1989 to 1992, which the author attributed to planned exits, sales of viable businesses and retirements (Headd, Small Business Economics, 2003). The firms in that study started more than 30 years ago. Reasons startups shut down and how founders fund them are in entrepreneur statistics.
Americans filed a record 5.67 million business applications in 2025
5,671,836 business applications were filed in 2025, the highest annual total since the Census Bureau’s series began in July 2004 and 62% above the 3,498,990 filed in 2019 (Census Bureau Business Formation Statistics, our sum of the unadjusted monthly data, 2026).
4,345,310 applications were filed from January through August 2026, 13.5% more than in the same eight months of 2025 (Census Bureau Business Formation Statistics, 2026).
Only about 5.5% of 2025’s applications are expected to become employers within a year. The Census Bureau projects 313,024 businesses with payroll will form within four quarters from the 2025 applications (Census Bureau Business Formation Statistics, 2026).
Fewer than half of small employers were profitable
47% of small employer firms were operating at a profit at the end of 2024, 19% broke even and 34% ran at a loss (Federal Reserve Small Business Credit Survey, 2026 report). The survey drew 6,525 responses from firms with 1 to 499 employees between September 3 and November 14, 2025.
73% of small employer firms named rising costs of goods, services or wages as a financial challenge, 54% struggled to pay operating expenses and 50% dealt with uneven cash flow (Federal Reserve Small Business Credit Survey, 2026).
42% reported higher costs from tariffs as a financial challenge, the first year the survey offered it as an answer (Federal Reserve Small Business Credit Survey, 2026).
57% said reaching customers and growing sales was an operational challenge, the most common one, followed by hiring or retaining qualified staff at 46% (Federal Reserve Small Business Credit Survey, 2026).
98.7 was NFIB’s Small Business Optimism Index in August 2026, down 1.1 points from July but above the 52-year average of 98.0 (NFIB, 2026).
35% of small business owners had job openings they could not fill in August 2026, and 82% of those hiring or trying to hire reported few or no qualified applicants (NFIB, 2026).
$81 billion is what federal paperwork cost small businesses in 2025, and over 80% of that burden comes from the IRS (SBA Office of Advocacy, 2026).
Women own 14.2 million US businesses, most with no employees
14.2 million US businesses were owned by women in 2023, with $2.8 trillion in receipts (Census Bureau, 2025). Women owned 12.9 million nonemployer businesses, 42.3% of the total, but 22.9% of employer firms.
1.6 million US businesses were owned by veterans in 2023 (Census Bureau, 2025).
Black-owned businesses made up 14.4% of nonemployer businesses but 3.4% of employer firms in 2023, and Hispanic-owned businesses made up 17.5% and 8.4% (Census Bureau, 2025).
26.1% of employer firms were family-owned in 2022 (SBA Office of Advocacy, 2026).
67% of US adults have “a great deal” or “quite a lot” of confidence in small business, the highest of the 17 institutions Gallup measured, against 17% for big business (Gallup, 2026). The poll surveyed 1,001 adults from June 1 to 15, 2026.
46% of small employers use AI, and 7% of those have fully integrated it
46% of small employer firms said their business or its employees currently use AI, and another 15% planned to start within 12 months (Federal Reserve Small Business Credit Survey, 2026).
Just 7% of the firms using AI had fully integrated it into their business (Federal Reserve Small Business Credit Survey, 2026). Adoption rates by survey, uses and revenue impact are in small business AI statistics.
The admin lands on the owner when hiring stalls
Most employer firms have fewer than five people, and four in five owners who are hiring report few or no qualified applicants (Census SUSB, 2022; NFIB, 2026). So the email, scheduling and follow-up usually fall to the owner. Carly takes that layer. It sorts, drafts and sends email across all of an owner’s Gmail and Outlook inboxes, schedules meetings and runs booking pages, follows up on quotes and leads, and runs Zapier-style workflows that start when a new email, lead or form fill comes in. It works on the web or by text, and connects to thousands of apps. The jobs to hand it first are in AI assistant for small business.
FAQ
How many small businesses are in the US? 36,207,130, per the SBA Office of Advocacy’s February 2026 FAQ, based on 2022 Census data. 82.3% have no employees. Census counted 31,985,874 businesses with no employees in 2024 alone (Census Nonemployer Statistics, released 2026).
What percentage of small businesses fail? About 22% of new establishments close in their first year, about 49% within five years and about 65% within ten (BLS Business Employment Dynamics, data through March 2025). Closing is not always failing: about a third of closed businesses were successful at closure (Headd, 2003).
How many people do small businesses employ? 62.3 million, or 45.9% of private-sector employees (SBA Office of Advocacy, 2026). Small businesses created 61% of net new jobs from 1995 through 2024.
What counts as a small business? For research, the SBA Office of Advocacy defines a small business as an independent business with fewer than 500 employees. SBA lending and contracting programs use separate size standards that vary by industry.
Is it true that 90% of small businesses fail? No government data series shows that. BLS data put ten-year closure at about 65% for new establishments with employees.
Related: Productivity Statistics · Sales Statistics · Best AI tools for small business owners · Best AI virtual assistants for small business · CRM for small business · AI personal assistant for business owners
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