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We live in a time where more people want to be their own boss. Instead of working regular 9-to-5 jobs, they’re starting their own small businesses for more freedom and flexibility.
Small businesses are now a big part of the economy. They create jobs for many types of workers and often build stronger, more personal connections with their communities than large companies.
Starting a business is easier than ever, especially a print-on-demand (POD business). To help you understand the market better, we have compiled the top small business statistics for you.
Let’s explore the small business stats.
What is a Small Business?
A small business can be born in your kitchen, study, or garage. It is all about taking a unique business idea and building products or services around it.
As the name suggests, a small business is launched with a limited investment and comprises a small team. The American Small Business Association lists some key characteristics to identify a small business:
- Owned and operated privately
- Employs fewer than 500 employees
- Earns an annual revenue of $1 million to $40 million
- Operates to make a profit
- Operates within a specific region
A bakery, boutique, print-on-demand online store, freelance services, small manufacturing unit, and hundreds of others all fall into the category of small businesses.
Your small business can be registered as a sole proprietorship or an LLC based on its business structure. You also need to acquire industry-specific permits and licenses to operate legally in the US.
Let’s now explore some small business facts and statistics.
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1. How Many Small Businesses Are There in the US?
The US is the epicenter of small businesses. Consider these small business growth statistics. According to the US Small Business Administration report, there are 34.8 million small businesses in the US. That amounts to 99.9% of all the businesses in the country.
Every popular industry has seen an increase in the number of newly launched small businesses. From healthcare to technology, real estate, transportation, education, and retail trade, small businesses are thriving in every field.
2. The Rise of AI Tools in US Small Businesses
Artificial intelligence has penetrated every industry in different capacities. Research shows that not only larger companies, but also small businesses, rely on AI technology.
The latest report by the US Chamber of Commerce (2024) states that 99% of small businesses in the US use at least one AI tool. These tools include accounting, social media management, content generation, digital payments, and so on.
Most small business owners believe AI is essential for their future growth. In fact, 81% of the owners plan to enhance AI adoption in the coming year.
3. How Many Jobs are Created by Small Businesses?
Small businesses create a lot of employment opportunities. According to the US Small Business Administration report mentioned above, small businesses in the US created 16 million new jobs between March 2022 and March 2023.
A large percentage of small businesses are family-run. Thus, along with paid employees, these businesses also have unpaid employees. Friends and family voluntarily contribute to the growth of the business.
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4. Small Business Employment Statistics
As of 2024, small businesses employ 45.9% of the private sector employees. The same US Small Business Administration report shares some more small business statistics for 2025.
Women make up more than 47% of the workforce in small businesses. Interestingly, women own 44.1% of small businesses in the US. This indicates the rapid rise of women entrepreneurs and their growth in recent years.
5. What Percentage of Small Businesses Fail?
One of the shocking statistics about small businesses is their failure rate. Launching a small business is just half the challenge. Keeping it afloat to build a sustainable business is a whole new ball game.
According to the Bureau of Labor Statistics, 20% of small businesses fail within the first two years. Another 45% fail during the first five years.
Many small businesses taste success within months of their launch. But for some reason or another, they fail within the first few years. Some major reasons for small business failure are:
- Bad business plan
- Lack of finances
- Lack of adaptability and flexibility
- Not able to meet the demand
- Highly competitive market
6. Most US Small Businesses Have No Employees
Starting a small business involves running a business with limited finances and resources. Here is one of the interesting facts about small businesses. Out of all small businesses, about 28.5 million or 81.9% are non-employer firms. (Oberlo, 2024).
In other words, most of the small business owners do not hire employees for pay. They would instead work with a small team consisting of friends and family. Everything from the production of print-on-demand products to marketing is taken care of by family.
7. Top U.S. States by Number of Small Businesses
In the US, some states have more favorable laws for starting a small business. As a result, those states have become hotspots for entrepreneurs and small business owners.
An Oberlo report states that California has 4.2 million small businesses, making up 12.1% of all US small businesses. The states of Texas and Florida rank as the second and third most popular states for launching a small business.
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Saulius Meilutis is the CEO of Podbase, helping creators and entrepreneurs monetize their ideas with print-on-demand. He shares insights on eCommerce, growth, and building lean online businesses.
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