Small Business Statistics

Small businesses are defined by the Office of Advocacy at the U.S. Small Business Administration (SBA) as having 500 employees or less. The SBA estimates there were 29.6 small million businesses in the U.S. in 2008.

Effect Of Small Businesses On United States Economy

Small businesses are a key part of the American economy. According to various government organizations, small businesses in the U.S.:

  • Employ over half of all non-government employees.
  • Account for 44 percent of total American private payroll.
  • Produce over 50% of the nonfarm private GDP
  • Hire 4 of 10 of high tech workers in the country

What Is The Small Business Survival Rate?

Almost all firms established in the United States start as small businesses. It is estimated that 99.8% of new businesses are small businesses.

Of these new businesses with employees, 70% last two years. Only half survive five years.

Source: U.S Dept. of Commerce, Bureau of the Census, Business Dynamics Statistics.

Best States For Small Businesses

Each year the Small Business and Entrepreneurship Council releases its ratings for the best states for Small Business. The index looks at 36 government related costs imposed on the small businesses in the states. Lower scores on the index indicate a more small business friendly state.

Here is the 2009 ranking of states according to the Small Business and Entrepreneurship Council. The most small-business friendly states are at the top (South Dakota FTW) and the least friendly are at the bottom (what's up, D.C.?)

  • 1 South Dakota 25.693
  • 2 Nevada 31.348
  • 3 Texas 32.082
  • 4 Wyoming 37.069
  • 5 Washington 42.955
  • 6 Florida 45.284
  • 7 South Carolina 48.001
  • 8 Colorado 48.250
  • 9 Alabama 48.823
  • 10 Virginia 50.843
  • 11 Ohio 51.250
  • 12 Alaska 51.554
  • 13 Tennessee 51.855
  • 14 Utah 52.404
  • 15 Indiana 52.602
  • 16 Arizona 52.803
  • 17 North Dakota 53.044
  • 18 Missouri 53.277
  • 19 Mississippi 53.439
  • 20 Georgia 53.781
  • 21 Oklahoma 53.868
  • 22 Kentucky 54.877
  • 23 Michigan 55.383
  • 24 Illinois 55.983
  • 25 Arkansas 56.006
  • 26 Kansas 57.813
  • 27 Pennsylvania 57.847
  • 28 New Mexico 58.101
  • 29 Louisiana 58.111
  • 30 Wisconsin 58.800
  • 31 Montana 59.041
  • 32 Idaho 61.705
  • 33 New Hampshire 61.995
  • 34 Nebraska 62.143
  • 35 Delaware 62.775
  • 36 West Virginia 63.689
  • 37 Maryland 64.342
  • 38 Oregon 65.179
  • 39 North Carolina 65.497
  • 40 Connecticut 66.627
  • 41 Iowa 67.485
  • 42 Hawaii 68.454
  • 43 Minnesota 72.149
  • 44 Massachusetts 72.515
  • 45 Rhode Island 73.339
  • 46 Maine 74.699
  • 47 Vermont 75.717
  • 48 New York 76.940
  • 49 California 77.749
  • 50 New Jersey 84.730
  • 51 Dist. of Columbia 84.795
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