63 Crucial Small Business Statistics for 2021/2022: Data Analysis & Projections

Small- and medium-sized businesses are considered the foundation of economies worldwide. If you’re a small business or you deal with small businesses, what influences them, impacts the way they do business, and statistics that will set the course of their future are critical information you can’t ignore.

We’ll be looking at vital small business statistics and examine the latest developments in the sector. We’ll explore significant small business projections for 2021, compile small business statistics that matter, and see how the sector is faring in the areas of finance, the modern workplace, and technology, especially with the widespread availability of cloud-hosted and web-based apps.

The figures gathered from studies and surveys can also serve as benchmarks on which businesses can compare their performance. Most of all, statistics provide crucial insights into the sector or industry and its critical components. Use the information here as a guide to further improve your business and prepare it for the future.

3 Key US Small Business Statistics

Small Business Sector Statistics

Our research on the small business developments of 2020/2021 starts with a general look at the sector – from the global perspective to the U.S. scene, which has one of the most robust small business sectors in the world. From these profiles and demographics, we’ll be able to understand this most critical driver of economic growth better.

  • Small and medium enterprises (SMEs) represent more than 90% of the business population, accounting for up to 70% of global employment, and responsible for over half of the gross domestic product (GDP) in developed countries. (United Nations, 2020)
  • It is estimated that there are up to 445 million micro and small and medium enterprises in emerging markets around the world. (World Bank, 2019)
  • 99% of all businesses in the European Union are classified as SMEs. (European Commission, 2017)
  • 285,334 or 97.5% of the total number of exporters in the US are SMEs. (US SBA, 2020)
  • As of 2020, there are currently 31.7 million small businesses in the US, representing 99.9% of the total businesses in the country. (US SBA, 2020)
  • 60.6 million workers are employed by small businesses, representing 47.1% of the total US workforce. (US SBA, 2020)
  • 89% of the total number of businesses in the US are micro-businesses or those with fewer than 20 employees. (Oberlo, 2020)
  • 27% of all small businesses in the US are owned by women, while men own 73%. (Guidant Financial, 2020)
  • 44% of small business owners are 39 to 54 years old (Gen Xers), while Baby Boomers (55 to 73 years old) own 41% of the pie. Meanwhile, 12% of all SMEs have Millennial owners (23 to 38 years old). (Guidant Financial, 2020)
  • 31% of SME owners have associate degrees while 30% are high school graduates. Only 4% of SME owners have doctorate degrees. (Guidant Financial, 2020)
  • In all, 53.78% of small business owners have a bachelor’s degree or higher compared to the national average of 33% of the population. (Fundera, 2020)
  • In the first half of 2019, the median revenue of US small businesses combined increased by 15.7%, which was 22% higher compared to the same period in 2018. (Small Business Trends, 2019)
  • In 2019, the construction sector realized the biggest growth rate of 23.3%. SMEs in the agriculture, mining, and utility industries all had a revenue increase of 19.1%. (Small Business Trends, 2019)
  • As of 2020, the most popular small business industries are retail and business services, which both account for 13% of the total number of SMEs. Construction and contracting closely follow, both taking 12% of the total. The food industry and residential and commercial service industries complete the top five, garnering 9% of the share. (Guidant Financial, 2020)

Small & Medium Businesses Are Foundation of World Economy

Together they constitute:

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Source: International Federation of Accountants (IFAC)

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The statistics presented are of the current situation. However, the small business sector is a dynamic one, and things are changing fast. For instance, if the Middle Age group is lording it now, but soon enough the Generation Z will take over. And before long, Millennials will be the majority of small business owners. What this means is that if you deal with small businesses, you should be ready to deal with a generation that is tech-savvy and highly-mobile. Another thing is the explosion in the number of startups across a variety of industries, not just in popular ones like retail and professional services but also in manufacturing and production, robotics, consultancy, media, and publishing. Startups in the IT sector will be as popular as ever, with most going into app development and IT services.

Small Business & Finance Statistics

Financial and tax management is a challenge for small businesses. Owners of startups and small businesses often have to do accounting and tax preparation themselves aside from personally handling all other operational and administrative tasks. This is due to limited resources and staff and the lack of the use of any best accounting software for small businesses.  Financial struggle is real – 5 out of the top 10 reasons for small business failure involve money matters. Here are some of the reasons they failed and the requirements of small businesses when it comes to finances.

  • $3,000 is the average cost for starting a micro business while most home-based franchises have a starting cost of between $2,000 and $5,000. (Business News Daily, 2020)
  • The average cost of starting a retail business is $32,000, but 42% of store owners launched their business at only $5,000. Meanwhile, the average cost of starting a construction business is $14,000, but those who already have tools ready can begin with less than $5,000. Starting a food business can set you back up to $125,000, although restaurant franchises may require an initial investment of as low as $25,000. (Camino Financial, 2020)
  • Cash remains the most popular form of SME financing for 37% of new business owners in 2020. Furthermore, 13% relied on Rollovers for Business Start-ups or 401(k) business financing and 12% used a line of credit. Only 10% acquired assistance from family and friends, a 22% decrease from the year prior. (Guidant Financial, 2020)
  • 28% of SME owners name cash flow as the biggest challenge they could face. (Facebook, 2020)
  • Only 30% of small businesses have an external accountant, even though accountants serve as small business owners’ most trusted business advisors. (OnPay, 2020)
  • $107,000 is the average amount of small business loans backed by the US SBA as of 2020. (US SBA, 2020)
  • Small business loan approval at big banks or those with more than $10 billion in assets dropped from 13.6% in August 2020 to 13.5% in September 2020. (Biz2Credit, 2020)
  • In 2019, the average salary of a small business owner was $66,373. (Fundera, 2020)
  • 83% of small business owners get a yearly salary of less than $100,000, while 30% take no salary from their business at all. (Fundera, 2020)
  • As of 2019, the estimated average effective tax rate paid by small businesses is 19.8%. Businesses pay different tax amounts depending on their entities. Sole proprietorships, for instance, pay a 13.3% tax rate while small partnerships pay a 23.6% tax rate. (Fundera, 2020)
  • According to the latest available data, around 50% of businesses survive five years or more, while a third survive at least 10 years. (US SBA, 2012)

Source: Business News Daily

If small business failure is mostly blamed on poor financial management, the business and market situation also has much to do with it. In times of recession, small businesses take the brunt. But in favorable conditions, SMBs do make it. A study on small business optimism showed that the majority were happy because they made profits last year, and hope that they would do well again this year given the positive economic environment.

Best Accounting Software for Small Businesses

  1. FreshBooks is easily deployable accounting software that is designed with small businesses in mind. To that end, it has a robust accounting suite that includes invoicing and expense management.
  2. Sage 50Cloud has a comprehensive set of accounting tools, making it ideal for small and medium businesses. It also offers a wide variety of add-ons like payroll management.
  3. NetSuite ERP is accounting software that streamlines the accounting process with its automation. This application provides full visibility into a business’s financial performance, too.
  4. Sage Business Cloud Accounting offers an eagle-eye view of a business’s financial status with its dashboards and visualizations. The platform keeps a complete record of customer sales and requisitions as well.
  5. Tipalti reduces time spent on accounting with its automation capability, particularly when it comes to mass payout. With this, businesses can also be confident they are compliant with government regulations.

Small Business & Technology Statistics

Small businesses have come a long way in terms of technology and digital transformation. According to SWZD’s 2021 annual report on IT trends and budgets, 57% of small businesses believe they need to upgrade their current IT infrastructure, while 80% of enterprises in North America and Europe anticipate year-over-year technology spending to increase or stay the same. 

  • 84% of small businesses utilize at least one form of digital technology to provide information to their customers. (US Chamber of Commerce, 2020)
  • 80% of businesses use at least one online platform for marketing and advertising.  (US Chamber of Commerce, 2020)
  • 79% of small businesses use digital platforms to communicate with suppliers and customers. (US Chamber of Commerce, 2020)
  • 75% of small businesses use digital platforms for sales. (US Chamber of Commerce, 2020)
  • Small businesses are expected to prioritize hardware when allocating budget this 2021, sparing 35% of their annual tech budget for it. Thirty-one percent will go to software, while 22% will go to hosted and cloud-based services. (SWZD, 2021)
  • CRM software is the top technology priority of 31% of SMBs, followed by financial software at 31%, and technology services at 28%. (Salesforce, 2019)

Source: Salesforce

  • When looking for new technology, the top factors SMBs look for are ease of use (69%), trustworthy vendor (63%), and price (61%). (Salesforce, 2019)
  • About 85% of small companies have already invested in Software as a Service (SaaS) products and solutions. (BMC, 2020)
  • On average, small companies with 50 employees or less use 25 to 50 SaaS solutions. (BMC, 2020)
  • As of 2019, 51% of small businesses in the US have a website. (Blue Corona, 2019)
  • In 2020, 29% of small businesses stated they will start using a website. (Small Business Trends, 2020)
  • While 92% of small business owners believe that having a website is the most effective digital marketing strategy, 11% of owners who don’t have a website don’t see the value of having one. (Fundera, 2021)
  • 37% of small businesses named social media as the most successful channel for achieving their business goals. As a result, 70% of them plan to increase social media investment. (Small Business Trends, 2020)
  • Lastly, according to a 2019 study, among the most exciting opportunities for SMEs in the next three years are the ability to deliver personalized real-time experiences (31%), the utilization of AI and bots (17%), IoT (15%), VR/AR (14%), and Blockchain (7%). (Adobe, 2019)

SMB SaaS usage

Small Business & Modern Workplace Statistics

Today’s digital workplace and connected employees have gone beyond the four walls of the office and made it easier to communicate and collaborate. It has been reported that 63% or nearly two-thirds of companies currently have remote workers, aided in no small way by freelance platforms. The distributed workforce is becoming a trend for small businesses. In fact, 900 startups were looking to hire remote employees at the beginning of 2019. How do small businesses fare when it comes to the modern workplace and workforce?

  • Small business owners personally take on an average of 4.2 roles, including that of leader, communicator, marketer, and financial manager. (Salesforce, 2019)
  • 70% of small business owners reported that they work more than 40 hours a week, with 19% of them working over 60 hours a week. (Fundera, 2020)
  • 41% of small business owners have only two to five employees. (Guidant, 2020)
  • There has been a 15% increase in challenges related to recruiting and retaining employees, according to small business owners. (Guidant Financial, 2020)
  • More than a third of small businesses currently outsource a business process, while 52% were already planning to do so. (, 2019)
  • Over 37% of small enterprises outsource mainly to improve efficiency. (Fortunly, 2021)
  • The most outsourced tasks by small businesses are accounting and IT tasks at 37%, followed by digital marketing at 34% and HR at 28%. (Fortunly, 2021)
  • However, many small business owners operate on tight budgets and do not outsource that much–only 10% outsource bookkeeping, 17% outsource accounting to a CPA, and 15% outsource payroll. (Guidant Financial, 2020)
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Tasks Outsourced by SMBs the Most in 2020

Tasks Outsourced by SMBs the Most in 2020
Accounting and IT: 37

Accounting and IT

Tasks Outsourced by SMBs the Most in 2020
Digital Marketing: 34

Digital Marketing

Tasks Outsourced by SMBs the Most in 2020
Human Resources: 28

Human Resources


Source: Fortunly

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The workplace isn’t what it used to be. Even the typical office has metamorphosed from cubicles into open working spaces. And that space for collaboration has gone digital with real-time collaborative platforms that let you discuss projects with teammates halfway across the globe, unhindered by time and location. The 9 to 5 employee has been supplanted by employees who work at their most productive times using devices they are most comfortable with – their own. BYOD is on the rise. That spells savings for small businesses and convenience as well as productivity for employees.

Small Business & COVID-19

The COVID-19 pandemic brought upon challenges that no small business has experienced before. Some experts compare the current economic climate to the Great Recession that occurred from 2007 to 2009. As businesses cope with the new normal, let’s take a look at some striking data and statistics that show the effects of COVID-19 on SMEs.

  • 62% of small business owners think the worst of the pandemic is still to come. (US Chamber of Commerce, 2021)
  • 56% of small business owners believe it will take at least six months to one year for the economy and business climate to return to normal. (US Chamber of Commerce, 2021)
  • 4% of small business owners say federal government relief will be crucial to their recovery and success in 2021. (US Chamber of Commerce, 2021)
  • However, one in four businesses also thinks that the government relief bill will be of little to no help to their business. (ZenBusiness, 2020)
  • An average small business expects to lose tens of thousands of dollars amid the pandemic, with 31% estimating that COVID-19 will cost them $10,000 to $50,000. (ZenBusiness, 2020)
  • Only 3% of SME decision-makers are confident that the pandemic has no impact on their business. (ZenBusiness, 2020)
  • At least 7% of small businesses laid off or furloughed their entire workforce during the onset of the pandemic. (OnPay, 2020)
  • On average, small businesses had to lay off or furlough 27% of their workforce in 2020. (OnPay, 2020)
  • In all, around 46% of SMBs had employees who lost their jobs, 24% furloughed staff, 18% cut their employees’ wages, 17% had to let go of employees, and 13% had employees who lost income due to slow business. (OnPay, 2020)
  • Only 29% of small businesses were able to retain all of their employees during the pandemic. (OnPay, 2020)
  • A survey showed that 83.5% of businesses in the accommodation and food services sector experienced a negative effect due to the COVID-19 pandemic. (US Census Bureau, 2020)

Effects of COVID-19 in SMB Employment

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Source: OnPay

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The small business projections for 2019 are concentrated on the increasing use and adoption of technology, especially cloud-hosted solutions, to streamline business processes. The affordability, scalability, security, and automation capabilities provided by SaaS products for the small business make for their compelling use. Also, small businesses are seen to be relying more on business intelligence tools and analytics software to get crucial insights from data generated every day from their operations. Furthermore, the impacts of the COVID-19 pandemic are expected to be felt in 2021, even beyond.

  • Automation will be further leveraged by small businesses, mostly through the use of SaaS tools with artificial intelligence and automation functions. 46% of SMB owners believe that their companies are ripe and ready to use AI. (Salesforce, 2019)
  • Small businesses will harness smart personalization engines to recognize customer intent, which can increase profits by 15%. (Freshworks, 2020)
  • With lower marketing budgets, small businesses will be focusing on user reviews since studies have found out that 92% of customers hesitate to purchase in the absence of reviews. (Freshworks, 2020)
  • Small and medium businesses will continue to prioritize ecommerce. The ecommerce market reached an all-time high of 16.4% in 2020, with 84% of consumers shopping online during the pandemic. However, ecommerce growth in 2021 will be uneven as not all newer and smaller competitors have the infrastructure needed to deliver optimal customer experience. In the US, the industry might decelerate to 7.8% as brick-and-mortar retail sales rebound from their pandemic plunge. (Shopify, 2021)
  • Online and digital payment channels will prevail. The use of no-touch payments, including contactless cards and mobile payment, has increased among retailers by 69% in 2020. Ninety-four percent of those who already implement digital payment options expect to continue doing so over the next 18 months. (US SBA, 2020)
  • Remote work will stay as it is set to increase by 16.5% among SMEs post-pandemic. 62% of the companies that had to adopt remote work during the pandemic are likely to continue with the setup. (ZenBusiness, 2021)

SME Remote work

What Can We Glean from Small Business Statistics?

What do the small business statistics for 2021 show us? It’s a clear fact that the small business sector is a force to be reckoned with, despite taking the brunt of COVID-19. This is why B2B companies are tapping into this vast market. The small business sector is now emerging as the leading user of cloud services. And there are many reasons why cloud adoption is essential for the small business. These include the simplicity, security, and scalability that cloud services provide.

Seeing so many SaaS vendors offer products specifically for small businesses is but one indicator of how important and significant this sector is. It is expanding phenomenally at a rate of 100 million startups opening each year around the world. Businesses will thus, notice and provide services and products geared toward this sector that is a wellspring of opportunities and profits. Likewise, small businesses will rely on these cloud-based software and services to boost the efficiency and productivity of their operations at the least cost.

SaaS, which is now changing the way entrepreneurs do business online, is the key to small businesses getting that level playing field to compete with larger firms. You, as a small business owner, have no reason not to ride the trend of technology and innovation to grow your business. As things stand, it’s the way forward.



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Jenny Chang

By Jenny Chang

Jenny Chang is a senior writer specializing in SaaS and B2B software solutions. Her decision to focus on these two industries was spurred by their explosive growth in the last decade, much of it she attributes to the emergence of disruptive technologies and the quick adoption by businesses that were quick to recognize their values to their organizations. She has covered all the major developments in SaaS and B2B software solutions, from the introduction of massive ERPs to small business platforms to help startups on their way to success.

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