It is no secret that the United States economy is one of the strongest in the world, with many of the most successful and profitable businesses all hailing from the land of opportunity. But how did the US manage to build and sustain such an incredibly stable and fast-growing economy? The answer is small businesses and entrepreneurs – they are the lifeblood of the US economy!

Small businesses are not the sole reason for the US being such an economic and financial powerhouse, but you can guarantee that the small business owner has had, and still has a huge part to play in it. With almost 99.9% of all US businesses being deemed as a “small business”, you can understand why.

Small Business Statistics

If you are wondering how many small businesses there are in the United States, well in 2020 there were 31.7 million. This is a 3.25% increase from the number of small businesses in the US in 2019. Between 2017 and 2020, the number of small businesses has increased by an average of 2.42% per year.

The US has always been a major attraction for aspiring small business owners and companies from all over the world and boasts the most amount of immigrants than any other country in the world. Opportunities for entrepreneurs to start and grow a small business are bountiful.

Business ownership is diverse in the U.S. and there are many women, African Americans, and Hispanics that own small businesses. Minority-owned businesses tend to be those that are nonemployer businesses without any employees. The latest owner demographic data indicates that there were 11.7 million women-owned businesses and 9.2 million minority-owned businesses in the U.S.

Number of small businesses in the US

How many employees is considered a small business?

US Small businesses are not just crucial for economic growth and development, but they are responsible for creating and sustaining millions of new jobs each year. The number of new jobs created each year by small firms adds a huge boost to employment, the economy, and the lives of those working for small businesses in the US.

In fact, there are over 60.6 million small business employees in the US as of 2020 that make up 47.1% of total employment in the workforce, almost half! 1.6 million net new jobs from small businesses were added in 2020, and 1.8 million net new jobs were added in 2019. Most of the job creation and the employees that work for small businesses in the US are those that have 20 employees or less.

This leads to the question that many people ask when it comes to small businesses; how many employees is considered a small business? According to the SBA, in order to qualify as a small business in the US, the business must not generate more than $38.5 million in annual revenue and employ 1,500 people or less.

This is the highest maximum level, and many businesses fall into this category because that’s a lot of revenue and employees! However, small businesses are broken down into various different industries and sub-sectors.

For example, one-third of the retail industry has different sub-industries, and size standards are set at no more than $7.5 million in average annual receipts. Other retail-related industries are defined by 100 to 500 employee maximums, so a lot less than the highest level of $38.5 million and 1,500 employees.

How many small businesses are in each state?

What makes the United States such a diverse place is that it is made up of 50 states that are all different shapes and sizes. They have their own laws, differing climates, and unique people and cultures. With this comes a lot of variables, especially when looking at the business climate of each state and the potential opportunities it provides to entrepreneurs and small businesses.

We have curated a listed table including the number of small businesses by state, showing you how many small businesses there have been each year since 2016. If you would like to know more in-depth information regarding how many small business employees each state has, and what the median income is for a self-employed person in each state that has a registered business, click on the links provided for the individual state pages, where we have comprehensively broken down the small business profile for each state.

States with the Most Small Businesses in 2020

With 4.1 million small businesses, the Golden State is home to 1.3 million more small businesses than its closest rival, Texas, which comes in 2nd in the U.S. with 2.8 million small businesses.

States with the most Small Businesses in 2020

Here are the states with the most number of small businesses in the US:

1. California: 4.1 million
2. Texas: 2.8 million
3. Florida: 2.7 million
4. New York: 2.2 million
5. Illinois: 1.2 million

States with the Least Small Businesses in 2020

With just over 74,000 small businesses, the Peace Garden State has the third smallest number of small businesses in the U.S. The state with the fewest small businesses is Wyoming.

States with the least Small Businesses in 2020

Here are the states with the least number of small businesses in the US:

1. Wyoming: 68,641
2. Alaska: 73,298
3. North Dakota: 74,202
4. Vermont: 78,759
5. Delaware: 84,675

Discover How Many Small Businesses are in each State – Downloadable Graphic

We have created a graphic that shows the number of small businesses by state in 2020. Feel free to download it for your reference and if you want to include it on your website please link back and reference this page as the source.

Number of Small Business by State 2020

Number of Small Businesses in the U.S. by Year

If you want to know how many small businesses there were in the U.S. in 2016, 2017, 2018, 2019, or 2020, we have created a table showing you all this information. You can even click on the columns and organize the list alphabetically (which is the default) or by the most amount of businesses or least amount of businesses.

State20202019201820172016
Number of Small Businesses in Alabama401,717396,432392,939388,850382,524
Number of Small Businesses in Alaska73,29873,35471,84172,04269,115
Number of Small Businesses in Arizona592,485571,495553,779538,552519,504
Number of Small Businesses in Arkansas255,004249,907247,018244,977240,123
Number of Small Businesses in California4,131,5084,023,2063,941,2013,836,1493,689,700
Number of Small Businesses in Colorado653,639630,113611,495596,210572,584
Number of Small Businesses in Connecticut350,376346,950342,443339,231333,078
Number of Small Businesses in Delaware84,67582,12179,41777,30674,913
Number of Small Businesses in District of Columbia78,31376,08372,83771,14668,236
Number of Small Businesses in Florida2,693,5242,494,2292,471,2602,368,3312,251,654
Number of Small Businesses in Georgia1,091,4341,051,0711,041,5151,016,458982,112
Number of Small Businesses in Hawaii135,567132,640128,863126,600122,566
Number of Small Businesses in Idaho169,151162,905158,426154,410150,025
Number of Small Businesses in Illinois1,236,9271,233,5721,219,6541,204,6581,178,058
Number of Small Businesses in Indiana521,656512,348508,924504,377495,695
Number of Small Businesses in Iowa272,555270,484267,733266,382264,384
Number of Small Businesses in Kansas256,950254,297251,985250,021246,833
Number of Small Businesses in Kentucky355,998351,260347,159344,108341,147
Number of Small Businesses in Louisiana457,636447,440437,437436,827427,290
Number of Small Businesses in Maine149,355147,270145,536144,002141,448
Number of Small Businesses in Maryland604,176594,124581,712579,173561,837
Number of Small Businesses in Massachusetts700,646669,224652,661639,334620,432
Number of Small Businesses in Michigan886,557873,722870,301866,196856,352
Number of Small Businesses in Minnesota526,350520,110513,118509,732503,733
Number of Small Businesses in Mississippi262,272257,404254,598252,019244,755
Number of Small Businesses in Missouri530,380532,277523,459515,227507,712
Number of Small Businesses in Montana123,419120,246118,315117,149115,054
Number of Small Businesses in Nebraska179,509176,358172,958170,512168,140
Number of Small Businesses in Nevada283,333270,079254,337246,569238,162
Number of Small Businesses in New Hampshire136,535134,760133,676132,432130,939
Number of Small Businesses in New Jersey908,209884,049861,373843,989820,303
Number of Small Businesses in New Mexico156,996154,804154,257154,489152,517
Number of Small Businesses in New York2,212,1672,168,7992,143,6672,129,0152,077,742
Number of Small Businesses in North Carolina934,604913,398890,398871,376843,724
Number of Small Businesses in North Dakota74,20273,14272,72373,02170,944
Number of Small Businesses in Ohio965,576949,479944,797939,317927,691
Number of Small Businesses in Oklahoma358,647350,718347,165345,839336,908
Number of Small Businesses in Oregon387,819377,860368,308357,408346,961
Number of Small Businesses in Pennsylvania1,074,7871,058,0331,037,7371,025,0451,004,688
Number of Small Businesses in Rhode Island103,986101,51699,82198,13496,688
Number of Small Businesses in South Carolina431,835418,031406,536395,068384,274
Number of Small Businesses in South Dakota88,19186,55085,25284,44083,334
Number of Small Businesses in Tennessee620,125603,310589,546580,453563,533
Number of Small Businesses in Texas2,835,8132,679,9642,627,7242,564,4792,446,204
Number of Small Businesses in Utah301,265287,803277,140268,872259,786
Number of Small Businesses in Vermont78,75977,61477,68377,54376,900
Number of Small Businesses in Virginia766,826745,886723,962706,626681,517
Number of Small Businesses in Washington630,819608,956590,908574,455555,285
Number of Small Businesses in West Virginia113,779113,410114,391115,673115,162
Number of Small Businesses in Wisconsin456,884452,594448,032445,445440,763
Number of Small Businesses in Wyoming68,64166,65365,46264,65363,289