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The United States has established itself as a hub for entrepreneurship and economic development, with a notable 33.2 million small businesses scattered across the nation, according to the latest data. These small businesses, despite operating at over 80% without any employees, have managed to provide jobs for 61.7 million individuals, fueling the country’s labor market. 

However, the road to success is fraught with challenges, as evidenced by the sobering statistic that approximately 19.6% of these small businesses fail within their first year, according to the BLS. 

The resilience and adaptability of small business owners remain crucial factors in navigating the complex landscape of the American economy. Let’s explore a comprehensive list of small business statistics to find out the true state of small business. 

Key Small Business Statistics in 2023

  • In the United States, there are 33.2 million small businesses and there are currently around 334 million businesses in the world.
  • Over 80% of small businesses have no employees, and 61.7 million people are employed by small businesses.
  • Approximately 19.6% of small businesses fail within the first year.
  • Only 34.5% of businesses survive 10 years.
  • $26 trillion in economic developments contributed, when businesses decide to adopt green practices.
  • 93.79% of small businesses use social media which approximately 30.57 million businesses in the USA.

Businesses Use Social Media by Platform 

Platform Number of Businesses Use
Instagram200 million globally
Twitter118 million
Facebookabout 200 million
Whatsapp50 million businesses
Snapchat35 million businesses
Linkedin57.2 million businesses

Small Business Formation Statistics

Small Business HR Facts

  • HR software is used by 65% of small businesses in the United States.
  • 15% of small businesses intend to implement HR software within the next one to two years.

#1. Approximately 19.6% of small businesses fail within the first year. 

Based on various sources, statistics reveal that the failure rate for small businesses is alarmingly high. 

Approximately 19.6% of small businesses fail within their first year, with the rate increasing over time. Half of all small businesses fail within five years, and a staggering 66% fail within ten years. 

Cash flow problems are a primary reason for small business failure, with a significant 82% of failures attributable to cash flow problems (Score). These figures highlight the challenges facing small business owners and underscore the importance of effective cash flow management to sustain a thriving enterprise.

#2.There are approximately 595,000 businesses that close each year

Based on multiple credible sources, it is estimated that around 595,000 businesses close annually. It is important to note, however, that this number is an estimate and may vary from year to year. 

Despite the high number of closures, it is also noteworthy that a significant number of new businesses open each year, with estimates ranging from 627,000 to over 1 million. These statistics illustrate the dynamic nature of the business landscape and highlight the ongoing entrepreneurial spirit driving innovation and growth in the economy.

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