115 small business statistics to conquer 2021 and 2022

Small businesses have gone through a lot in the past year. The COVID-19 pandemic forced many businesses to close for good while countless others jumped through hoops to stay afloat amidst changing ordinances. Despite clear hardships in 2020, small business owners learned a lot of lessons that taught them resilience, patience, and compassion that they took into 2021.

Seasoned and rookie business owners alike need to build on these lessons so their business can continue to grow. Understanding what businesses went through during the COVID-19 pandemic, along with the data behind it, can help you make more informed decisions in the years to come. That’s why we’re going over 115 small business statistics that can help your business thrive. You can also skip ahead to our infographic to see the highlights.

Table of contents


01

Small businesses by the numbers

It’s safe to say that small businesses make a big impact on the economy. In fact, small businesses make up 99.9% of all businesses according to the U.S. Small Business Administration. Many of us rely on small businesses for everything from employment to our favorite desserts.

Small business owner conducting business

31% of businesses have been open for a decade or more

Open sign

Guidant Financial

There are nearly 32 million small businesses in the United States.

U.S. Small Business Administration

There are about 61 million small business employees in the United States

U.S. Small Business Administration

19% of business owners invested in a new franchise location in 2020

graphic representing a new franchise

Guidant Financial

47% of United States employees work for small businesses

U.S. Small Business Administration

58% of business owners started a business from scratch in 2020

graphic of coins

Guidant Financial

Key takeaways

  • Many people started new businesses in 2020. It’s not easy to start from scratch, but many people decided that it was time to start their new venture.
  • Small businesses employ lots of people. Even if you don’t work for one, you probably know someone who does.

Magnifying glass with star

02

Small business challenges statistics

Like any entrepreneur, small business owners face their own sets of challenges. A global pandemic, unfortunately, creates even more obstacles to overcome.

Many owners in the past year had trouble filling open positions. Others had cash flow woes that made it tough to keep the lights on. Yelp reported that more than 97,000 businesses closed towards the end of last year. Regardless, countless businesses still overcame the challenges thrown at them.

Small business owner conducting business

46% of business owners have openings that they can’t fill

National Federation of Independent Businesses

26% of business owners said labor quality was their top business problem

National Federation of Independent Businesses

32% of business owners report few qualified applications for their open positions

graphic of people with checkmarks

National Federation of Independent Businesses

24% of small business owners were concerned with staying competitive on shipping and pricing

graphic of a truck after delivering boxes

Bluehost

30% of small business owners have difficulty attracting relevant or high-quality traffic to their site

graphic of a magnet over a website

Bluehost

For business owners who experienced lower profits, 35% blamed weaker sales

National Federation of Independent Businesses

67% said that limited marketing budget was their core small business marketing challenge

Semrush

Outside of the COVID-19 pandemic, 23% of business owners said the lack of capital or cash flow was the biggest challenge of 2020

Guidant Financial

In a survey of 500 women small business owners, 55% felt men have an easier time starting their own business

Groupon

Key takeaways

  • Finding qualified workers remains a top issue for small business owners. Although small businesses employ lots of Americans, they still have trouble filling openings.
  • Sales volume is a major factor for profits. A slump in sales may be a result of consumers losing their jobs, refusing to shop in person, and other preferences that changed as a result of the pandemic.
  • A lack of cash flow is another difficulty for businesses. The U.S. entered a recession in early 2020 because of the pandemic. Government aid and reopenings helped small businesses hang on, but many still struggle.

Magnifying glass with star

03

Small business and marketing statistics

Despite what some may think, even small businesses need marketing. Small businesses can benefit from investing in extra marketing efforts where word-of-mouth falls short. In our increasingly digital and remote world, digital marketing is essential—especially for mom-and-pop small businesses.

Small business owner conducting business

39% of small businesses are expanding their social media presence

Small business expanding customer reach through social media

Bluehost

78% of small businesses use Facebook

Facebook icon

Visual Objects

55% of small business owners plan to invest in digital marketing

Guidant Financial

43% said that the most important challenge small businesses face is building a visible brand

Semrush

40% of small businesses adjusted their website to make it more mobile-friendly in light of the pandemic

mobile phone

Bluehost

30% of small businesses are increasing marketing efforts

Bluehost

68% of consumers use a brand’s website to collect information

Red Egg Marketing

39% of small businesses re-designed their website in light of the pandemic

new website

Bluehost

81% of small businesses plan to invest in social media in 2021

Visual Objects

28% of small businesses plan to increase communication with customers through email

envelope with email symbol

Bluehost

54% of business owners reported a boost in website traffic since the beginning of the COVID-19 pandemic

arrow trending up and to the right representing growth

Bluehost

48% of small business owners implemented an online store in 2020

Bluehost

Key takeaways

  • Digital marketing takes the front seat for small businesses. With the growing push to a remote-first world, improving online marketing efforts is a must.
  • Small business owners are prioritizing websites. Business owners can sell online and directly provide important information to customers.
  • Marketing budgets are a challenge for small businesses. There’s no doubt that small business owners understand the importance of marketing. However, it’s not easy to scrape out a budget for it if they’re having difficulties with profits.

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04

Small business finances and growth statistics

The U.S. Small Business Administration reported that small businesses generate 44% of economic activity. This includes sales, loans, payroll and everything in between. We already know that many small businesses struggled with sales. However, understanding business finances goes much further than sales alone.

Small business owner conducting business

42% of small business owners said money and finances was a top stressor

The UPS Store

39% of small business owners use cash to start their business

money bills and coins

Guidant Financial

10% of small business owners get help from family and friends to start their business

hand holding cash

Guidant Financial

36% of business owners put money towards new equipment

National Federation of Independent Businesses

39% of business owners increased employee compensation

National Federation of Independent Businesses

59% of business owners were not interested in a loan

money bad falling through a hole in the floor

National Federation of Independent Businesses

23% of business owners borrow on a regular basis

National Federation of Independent Businesses

Small business owners make an average of $67,140 a year

calendar with payday marked

Payscale

Only 8% of business owners said labor costs were their top business concern

National Federation of Independent Businesses

49% of small business owners with online stores saw a boost in sales in 2020

Bluehost

61% of small business owners with brick-and-mortar stores saw a decrease in sales in 2020

storefront with graph showing decreasing trend

Bluehost

33% of small businesses owners saw all of their revenue coming from online avenues in 2020

Bluehost

Only 63% of small businesses accept checks

mobile device processing a payment card

Payments Journal

More small businesses prefer card payments than cash, but 70% of small businesses still accept cash

Payments Journal

For business owners who experienced higher profits, 66% said it was due to sales volumes

National Federation of Independent Businesses

Key takeaways

  • An online presence helped small business owners boost sales. With many consumers turning to online and contactless shopping, online stores were a big benefit for many businesses.
  • Compensating employees didn’t worry many business owners in 2021. In fact, many raised wages for employees.
  • Small business owners prefer other financing methods over loans. Small business owners didn’t seem too interested in getting themselves into more debt. Instead, cash and aid from loved ones were more appealing ways to finance their businesses.

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05

Small business technology and cybersecurity statistics

If you handle anyone’s sensitive information, cybersecurity should be at the top of your priority list. Data breaches cost businesses $3.86 million per breach in 2020. A breach means a hacker could expose payment, contact, and other sensitive information.

Preparing your small business for a cyber attack can save you a lot of time and money in the long run. Upgrading your business’s technology can improve both your security and productivity.

Small business owner conducting business

58% of small- to medium-sized businesses (SMB) leaders said security vulnerability is their biggest data storage challenge

shield icon with lock

Infrascale

32% of SMBs say budget is their greatest barrier to IT security

Untangle

24% of SMBs say their greatest barrier to IT security are employees not following guidelines

Untangle

40% of small business owners feel that economic uncertainty will prevent them from making necessary cybersecurity investments

Cyber Readiness Institute

For companies with less than 20 employees, only 34% provide employees with technology to improve remote work cybersecurity

laptop with checkmark

Cyber Readiness Institute

23% of small business owners said data security was a challenge because of the complexities of online data storage and protection

Bluehost

Only 20% of small business carry cyber coverage

paper with checkmark

Selective

20% of SMB leaders said they don’t currently have a data backup or disaster recovery solution in place

Infrascale

39% of SMBs have less than $1,000 allocated for their IT security budget

Untangle

27% of business owners plan to invest in IT infrastructure

Guidant Financial

42% of SMBs said news about data breaches made them review and reevaluate their IT security roadmap

speech bubbles representing news

Untangle

64% of SMBs are deploying some or all of their IT infrastructure in the cloud

clouds representing commercial computing

Untangle

For companies with less than 20 employees, only 25% implemented a remote work policy focused on cybersecurity as a result of COVID-19

Cyber Readiness Institute

Key takeaways

  • Small business owners understand the importance of cybersecurity. However, few have invested in coverage or improvements.
  • Finances are a barrier to implementing better cybersecurity solutions. The state of the economy and a business’s cash flow are the main financial roadblocks for small business owners.
  • Employees may struggle with cybersecurity if their employers don’t provide them with the right tools. A standard policy and improved technology are both ways owners can equip employees for success.

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06

Small business owner statistics

Small business owners come from all walks of life and have lots of motivators to start their own businesses. Some are parents who want flexible schedules to spend time with their family. Others are seasoned workers who are ready to pursue their passion. Small business owners also differ in how they define success and how they run their businesses.

Small business owner conducting business

52% of Gen X small business owners are most motivated by flexible working conditions and being their own boss

Xero

52% of women-owned businesses have one to four employees

1 boss and 4 employees

United States Census Bureau

41% of small business owners are Baby Boomers

balding man is the small business owner

U.S. Small Business Administration

Roughly 52% of minority-owned businesses have one to four employees

United States Census Bureau

About 53% of Hispanic-owned businesses have one to four employees

United States Census Bureau

46% of small business owners are Gen X

Guidant Financial

47% of small business owners say that the biggest misconception of starting a business is that you’ll be less stressed

head outline with lightning bolt

Guidant Financial

When asked, “how happy are you as a small business owner?” 43% of business owners said they were very happy

bar graph with face icons

Guidant Financial

1% of small business owners are Gen Z

Guidant Financial

48% of small business owners define success as achieving profitability

bar graph showing growth

Xero

46% of small business owners says their defining moment for starting a business was their passion for entrepreneurship

Xero

13% of small business owners are Millennials

Guidant Financial

58% of small business owners gave themselves five years or less to make it or break it

Xero

28% of women say self-belief and self-doubt were obstacles to starting a business

Xero

17% of small business owners started their own business because they were dissatisfied with corporate America

sad face over briefcase

Guidant Financial

41% of Gen Z small business owners are most motivated by passion and purpose for their work

heart with star

Xero

29% of small business owners started their own business because they were ready to be their own boss

Guidant Financial

Key takeaways

  • Gen X remains the largest age group of small business owners. They’re followed by Baby Boomers, Millennials, and Gen Z.
  • Many small business owners choose this path because they want to be their own boss. Other top motivators include a passion for entrepreneurship and for their work.
  • Despite high stress and challenges, many are very happy as small business owners. For some, perks like managing your own working conditions and getting away from corporate America are enough to make the tough times worth it.

Magnifying glass with star

07

COVID-19 and small businesses statistics

It’s clear that the COVID-19 pandemic came with its share of difficulties for all aspects of life. Many small businesses unfortunately took the brunt of it and small business revenue suffered as a result. However, we did see companies adjust in light of dwindling demand and changing government regulations. Many small businesses today are still working to stay afloat and serve their customers.

Small business owner conducting business

62% of small business owners used personal funds in response to financial challenges in 2020

wallet open with cards and cash spilling out

Fed Small Business

78% of small business owners reported a decrease in revenues in 2020

Fed Small Business

90% of Asian-owned small businesses reported a decrease in revenue in 2020

Fed Small Business

67% of Asian- and Black-owned small businesses reduced operations in 2020

Fed Small Business

79% of small businesses owners had outstanding debt in 2020

past due invoice

Fed Small Business

35% of small business owners with lower credit scores used online lenders

computer monitor with lending website open

Fed Small Business

63% of Hispanic-owned firms reduced operations in 2020

Fed Small Business

44% of small businesses had more than $100,000 in debt in 2020

ball and chain with dollar sign on the ball

Fed Small Business

26% of small businesses temporarily closed in 2020

Fed Small Business

55% of small business owners faced disruptions because of government mandates

paper with government building icon

Fed Small Business

48% of small businesses modified operations in 2020

Fed Small Business

56% of small businesses reduced operations in 2020

Fed Small Business

58% of small business owners faced disruptions because of changes in demand

Fed Small Business

Only 14% of business owners expected employment growth in 2020

Fed Small Business

88% of small business owners said sales had not returned to normal when surveyed in September and October 2020

Fed Small Business

57% of small business owners says businesses like theirs won’t recover until the second half of 2021 and beyond

Wells Fargo

Key takeaways

  • Minority-owned businesses took a big hit during the pandemic. Hispanic-, Asian-, and Black-owned businesses all reduced operations in 2020.
  • Sales have not returned to normal for most businesses. Small business owners expect recovery to come much later.
  • Changes in demand and government mandates disrupted businesses. Openings, closings, capacity restrictions, and changes in consumer preference forced many businesses to quickly adapt.

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08

Small business PPP loan statistics

The U.S. Small Business Administration administered the paycheck protection program, also known as PPP. The program was intended to help businesses keep their employees on payroll during the COVID-19 crisis. Womply was the the #1 source of PPP loan applications. We helped 1 million businesses, independent contractors, gig workers, and self-employed individuals with PPP.

Small business owner conducting business

52% of small business owners said they’d spend more than half of their PPP loan on payroll and the remainder on rent, utilities, and mortgage on interest

people outlines with cash

Fundera

The U.S. Small Business Administration approved 11,823,594 PPP loans

stamp placing checkmarks

U.S. Small Business Administration

56% of small business owners says the amount they received for the PPP was not sufficient for their expenses and needs

Fundera

The U.S. Small Business Administration distributed $799,832,866,520 total net dollars in PPP loans

bag of cash

U.S. Small Business Administration

82% of small businesses applied for PPP loan

Fed Small Business

5,467 lenders participated in the PPP

U.S. Small Business Administration

35% of small business owners said they didn’t apply for a PPP loan because of the rules around PPP loan forgiveness

mobile phone with big red X and checkboxes

Fundera

Only 60% of small business owners fully understand how PPP loan forgiveness works

Fundera

Of the 5.2 million PPP loans disbursed in 2020, 145,000 are under review for loan forgiveness

magnifying glass over paper

U.S. Small Business Administration

64% of small businesses would apply for more government-provided assistance if it were made available

website button saying Apply Now

Fed Small Business

Of the 5.2 million PPP loans disbursed in 2020, 3.3 million were forgiven

U.S. Small Business Administration

Only 40% of small business owners planned to spend 100% of their PPP loan on payroll

Fundera

Of the small businesses that received none of the PPP funding they applied for, 71% reduced the number of employees on their payroll

Fed Small Business

Of the small businesses that received all of the PPP funding they applied for, only 46% reduced the number of employees on their payroll

Fed Small Business

Of the small businesses whose sales had not returned to normal, 30% said it’s unlikely they could survive until sales recover without additional government assistance

out of business sign

Fed Small Business

When asked if they intend to rehire staff laid they laid off with their PPP loan, 64% of small business owners said no, because they did not lay off any staff

speech bubbles with people icons

Fundera

Key takeaways

  • Many small businesses applied for PPP loans. These loans helped businesses keep employees on their payroll.
  • Businesses who received PPP loans were able to keep more people on their payroll compared to businesses who didn’t receive any PPP loan funding.
  • PPP loans were not enough for small businesses. The initial amount wasn’t sufficient for some and many say they’d need more aid until sales eventually recover.

Magnifying glass with star

09

Future of small business statistics

Many small business owners are looking on the bright side and predict high growth in the future. They have a lot of knowledge under their belt to take on new challenges.

Small business owner conducting business

49% of small business owners plan to increase staff and remodel or expand their business

Guidant Financial

48% of small business owners say there’s no need for a physical store

website with shopping cart

Bluehost

51% of business owners were interested in growing their business

Guidant Financial

30% of small business owners are somewhat confident in small business in the current political climate

Guidant Financial

65% of small business owners says that the worst of the pandemic is behind us

U.S. Chamber of Commerce

33% of small business owners say the economy’s health is good

EKG-type graph under cash

U.S. Chamber of Commerce

55% of Americans say they dream of starting their own small business

thought bubble with storefront

The UPS Store

64% of small business owners remain concerned about the impact of COVID-19 on their business

COVID-19 virus

U.S. Chamber of Commerce

Three in four small business owners predict online sales will increase in 2021

Bluehost

57% of small businesses anticipate revenue increasing in 2021

U.S. Chamber of Commerce

43% of Gen Z business owners say the pandemic increased their desire to run a business

Xero

Key takeaways

  • Many business owners are optimistic for the future. With vaccines readily available in the U.S. and states reopening, small business owners are expecting sales to increase.
  • Entrepreneurship is still a dream for many Americans. The difficulties brought on by COVID-19 haven’t deterred Americans from wanting to be their own boss.
  • Business owners are planning for growth in the future. As sales improve for some, growth is essential to keep up.

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Being a small business owner is no easy task. However, growing something you can call your own is one of the many rewards of owning a small business. The key to being agile is keeping a pulse on trends and statistics like these, which can help you predict and prepare for changes.

Sometimes, those trends forecast some rocky roads for the future. But despite the obstacles in your path, you can always find growth opportunities. Learn more about how small businesses can grow in a slow economy.

Take a look at some of our other popular small business resources below to help you run a better business.

Take a look at this infographic below for a visual overview of the state of small business in 2021.

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