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Catching Up With Small Business
The U.S. Small Business Administration defines a small business as a firm with revenue ranging from $1 million to over $40 million and an employee workforce of under 500.
Last year, USA Today reported there were 33.2 million small businesses in the United States, making up 99.9% of all firms across the country, and 99.7% of firms with paid employees. Small businesses were 43.5% of GDP. According to One Okaloosa EDC, 85% of the nearly 11,000 businesses operating in Okaloosa County have fewer than 10 employees.
Women own around 26% of all small businesses in the U.S. Almost four-fifths of small business owners were self-financed when launching, 16% were funded by bank loans, and loans from family and friends made up the remaining 2% to 6%.
There were 33.3 million small businesses across the country with 4.5 million in the professional, scientific and technical services industries.
Approximately half of all businesses start at home, and 60% of businesses with no staff or employees are based at home. That means around 19 million businesses in the country are home-based.
It has been well documented that nearly 20% of small businesses will fail within a year of opening. Half fail after five years and approximately 65% after operating for up to 10 years.
Approximately 595,000 businesses close each year in the U.S., but 627,000 new businesses are created on average, so there is a net overall growth of around 32,000 new businesses a year.
Small businesses in healthcare and social assistance had the best success rate, with 85% of enterprises still operational after one year, putting the industry 5% above the national average survival rate.
The healthcare industry had a success rate of 60% for small businesses in their first year. Businesses in construction, transportation and warehousing had the lowest industry success rate of 30% and 40% after five years of operating.
The U.S. Chamber of Commerce estimated that:
71% of small businesses had a website.
55% of online shoppers looked for online reviews.
81% ran a general web search on the business before buying.
Cybercrime costs reached $8 trillion worldwide in 2023, and predictions are costs will rise to $10.5 trillion in 2025.
The U.S. Chamber of Commerce reports, in the first quarter of 2025, 63% of small businesses say their business is in good shape and 66% now say they are comfortable with their cash flow, down from last quarter (72%), but stable from one year ago (67%).
Gen Z or millennial business owners are more likely than those owned by Gen Xers to say the U.S. and local economies are in good health. They are more likely than small businesses owned by Baby Boomers and older generations to report increases in competition.
Most small businesses (69%) report they expect revenue to increase in the next year, 37% expect to increase their staff, and 43% say they plan to increase their investment in the next year. The chart below, sourced from the U.S. Chamber of Commerce, illustrates the expectations of small business owners from four major sectors (manufacturing, services, retail and professional services) for the year ahead.
Kelly Murphy Redd, CEcD, Murphy Redd Marketing