Small businesses are the base of the U.S. economy, yet the headline numbers are often repeated without a source and quietly go stale. This page pulls the current figures straight from the primary datasets.
Every stat below links to the source it came from: the U.S. Small Business Administration (SBA) Office of Advocacy, the Bureau of Labor Statistics (BLS), the U.S. Census Bureau, and the Federal Reserve. The data vintage is noted on each so you can tell current figures from older ones.
Key Small Business Statistics at a Glance
- There are 36,207,130 small businesses in the United States, or 99.9% of all U.S. businesses (SBA Office of Advocacy, 2026).
- Small businesses employ 62.3 million people, about 45.9% of the private-sector workforce (SBA, 2026).
- 6.4 million small businesses have paid employees (17.7%); the rest, roughly 29.8 million, are nonemployer firms (SBA, 2026).
- Small businesses created roughly 60% of net new jobs between 1995 and 2024 (SBA, 2026).
- 79.6% of new business establishments survive their first year, but only 50.6% reach year five and 34.7% reach year ten (BLS, 2013 cohort).
- California has the most small businesses of any state at 4.34 million, followed by Texas (3.52M) and Florida (3.49M) (SBA, 2025 state profiles).
- 47% of small employer firms operated at a profit at the end of 2024 (Federal Reserve SBCS, 2026 report).
- 42% of financing applicants received the full amount they sought, with full approval most common at small banks, at 57% (Federal Reserve, 2026 report).
How Many Small Businesses Are There in the U.S.?
The most authoritative count comes from the SBA Office of Advocacy, which reports 36,207,130 small businesses in its 2026 Frequently Asked Questions report. That is 99.9% of all U.S. businesses, so in practical terms almost every business in the country is a small business.
Most of these firms are very small. Only 17.7% (about 6.4 million) have paid employees. The remaining roughly 29.8 million are nonemployer firms, typically sole proprietors and single-owner operations, based on 2022 Census nonemployer data.
Small businesses are also a major job engine. They employ 62.3 million people, roughly 45.9% of the private-sector workforce, and accounted for about 60% of net new jobs created between 1995 and 2024.
| Metric | Figure | Source (data vintage) |
|---|---|---|
| Small businesses in the U.S. | 36,207,130 | SBA Advocacy FAQ 2026 |
| Share of all U.S. businesses | 99.9% | SBA Advocacy FAQ 2026 |
| Small business employees | 62.3 million | SBA Advocacy FAQ 2026 |
| Share of private-sector workforce | 45.9% | SBA Advocacy FAQ 2026 |
| Employer firms (have paid staff) | 6,395,635 (17.7%) | SBA Advocacy FAQ 2026 |
| Nonemployer firms | ~29.8 million | Census nonemployer data (2022) |
| Share of net new jobs, 1995 to 2024 | About 60% | SBA Advocacy FAQ 2026 |
Which States Have the Most Small Businesses?
Small business counts track population and economic size, so the largest states lead. The SBA's 2025 state profiles (using federal data through March 2024) put California first by a wide margin, followed by Texas and Florida.
| State | Small businesses | Source (data vintage) |
|---|---|---|
| California | 4.34 million | SBA 2025 State Profiles (through March 2024) |
| Texas | 3.52 million | SBA 2025 State Profiles (through March 2024) |
| Florida | 3.49 million | SBA 2025 State Profiles (through March 2024) |
Per-state counts for all 50 states and the territories are published in the SBA Office of Advocacy's state profiles and the companion state small business statistics dataset.
Business Survival and Failure Rates
The common claim that most new businesses fail in the first year is not what the data shows. The clearest primary read comes from the BLS Business Employment Dynamics program, which tracks the survival of business establishments, of any size, that opened in March 2013.
For that cohort, 79.6% were still operating after one year. About half (50.6%) were still open at year five, and roughly a third (34.7%) made it to year ten.
In plain terms, roughly one in five establishments closes within a year, and about half are gone by year five.
| Years in operation | Share of 2013-cohort establishments still operating |
|---|---|
| 1 year | 79.6% |
| 2 years | 68.9% |
| 3 years | 61.4% |
| 4 years | 55.3% |
| 5 years | 50.6% |
| 10 years | 34.7% |
Two caveats matter when citing these numbers. First, this is a single cohort born in 2013, so the exact percentages shift as newer cohorts are measured, and the data covers all private-sector establishments rather than small businesses alone.
Second, a closed establishment is not the same as a failed business. The BLS data measures whether an establishment is still operating, not why it stopped. Closures can include sales, mergers, and voluntary wind-downs, so closure rates can overstate true business failure.
New Business Formation Activity
Business creation has stayed unusually high since the pandemic. According to the Census Bureau's Business Formation Statistics, Americans filed about 5.6 million new business applications in 2025 and about 5.2 million in 2024.
Application volume has remained above the 5 million mark every year since 2021, based on the seasonally adjusted annual totals tracked in the Census series (via FRED).
Formation data is a leading indicator for the small business counts above, since today's applications become tomorrow's employer and nonemployer firms. For the full breakdown of application and formation trends, see FinStackk's companion research page, Business Formation Statistics (https://www.finstackk.com/research/business-formation-statistics).
Small Business Finances, Profitability, and Credit
Profitability is far from guaranteed, even among established firms. The Federal Reserve's Small Business Credit Survey (2026 Report on Employer Firms) found that 47% of small employer firms were operating at a profit at the end of 2024. The rest reported break-even, a loss, or were unsure.
Revenue momentum was soft. In the 2025 survey, firms were slightly more likely to report that revenue had decreased rather than increased over the prior 12 months.
Access to financing is uneven. Among firms that applied, 42% received the full amount they sought. Applicants were most likely to be fully approved at small banks, where 57% got everything they asked for.
One caveat on this source: the Small Business Credit Survey is a convenience sample rather than a random one, so its figures are best read as indicative of conditions rather than strictly representative.
Frequently Asked Questions
How many small businesses are there in the United States?
There are 36,207,130 small businesses, which is 99.9% of all U.S. businesses, according to the SBA Office of Advocacy's 2026 FAQ. About 6.4 million of them have employees; the rest are nonemployer firms.
What percentage of small businesses fail?
Based on BLS survival data for the 2013 cohort of business establishments, about 20% close within the first year and roughly half close within five years. These are closure rates for establishments of all sizes, not failure rates, since a closure can include a sale or voluntary wind-down.
What counts as a "small business"?
The SBA sets size standards that vary by industry, based on either number of employees or average annual revenue. As a common rule of thumb, a firm with fewer than 500 employees is treated as small, but the exact threshold depends on the industry, so check the specific standard before relying on this general rule.
How many people do small businesses employ?
Small businesses employ 62.3 million people in the U.S., about 45.9% of the private-sector workforce, and they created roughly 60% of net new jobs between 1995 and 2024 (SBA, 2026).
Are most small businesses profitable?
Not quite most. The Federal Reserve's 2026 Small Business Credit Survey report found 47% of small employer firms were operating at a profit at the end of 2024, with the rest at break-even, a loss, or unsure.
Which state has the most small businesses?
California leads with 4.34 million small businesses, followed by Texas (3.52 million) and Florida (3.49 million), per the SBA's 2025 state profiles.
Sources and Methodology
This page uses primary government and Federal Reserve datasets only. Where secondary roundups repackage these figures, we cite the original source instead. Data vintages are noted because several widely quoted small business numbers are several years out of date.
- U.S. Small Business Administration, Office of Advocacy: Frequently Asked Questions About Small Business, 2026. Business counts, employer vs. nonemployer split, employment share, and net job creation.
- SBA Office of Advocacy: 2025 Small Business Profiles for the States, Territories, and Nation. Per-state small business counts (data through March 2024).
- SBA: State Small Business Statistics 2025 dataset. Downloadable per-state figures.
- U.S. Bureau of Labor Statistics: Business Employment Dynamics, establishment survival. Cohort survival rates (2013 cohort through 2023); see also the BED methodology FAQ.
- U.S. Census Bureau: Business Formation Statistics. New business applications and formations; annual totals via FRED series BABATOTALSAUS.
- Federal Reserve Banks: Small Business Credit Survey, 2026 Report on Employer Firms. Profitability, revenue, and loan approval rates (end of 2024); profit series also at FRED SBCSS7B0V0FRB.
Methodology note: SBA Advocacy figures draw on Census and BLS source data and are the standard reference counts for U.S. small businesses. BLS survival figures are cohort-specific and cover establishments of all sizes. Federal Reserve Small Business Credit Survey results come from a convenience sample rather than a random one.
How FinStackk Helps
FinStackk is an accounting and tax compliance platform built for U.S. businesses. Its modules cover the day-to-day financial work behind the numbers on this page:
- Fin-Books for ongoing bookkeeping and clean financial records.
- Fin-Tax for business tax filings and a compliance calendar.
- Fin-Sights for financial dashboards that show where a business stands.
For businesses just getting started, Fin-Start handles incorporation and EIN setup so you begin on solid footing.
Update History
- October 2026: Initial publication. Figures reflect the SBA 2026 FAQ, SBA 2025 state profiles, BLS 2013-cohort establishment survival data, Census Business Formation Statistics, and the Federal Reserve 2026 Small Business Credit Survey report.