In the United States, small businesses remain the foundation of the country’s economy. Not only do small businesses account for the overwhelming majority of companies founded in the U.S., but many of the large corporations that exist today started out as small businesses.
If you’re thinking of starting your own small business, it’s helpful to understand the current landscape of small business ownership in the United States. With that in mind, let’s take a look at some of the top small business statistics for 2025. From the average size and revenue of small businesses to information on the demographics of small business owners, here are all the small business facts and numbers you need to know.
A small business is defined as any company with fewer than 500 employees, and, in 2025, there will be over 33.2 million small businesses in the United States. Consider the fact that the U.S. population is about 334 million, and it’s impressive to realize that there is roughly one small business for every ten people in the country.
At Tailor Brands, we are proud to have helped establish, manage, and grow over 150,000 of these small businesses. We provide a range of services to small business owners and are happy to be doing our small part to support the country’s most important economic engine.
Of all the small businesses in the United States, 85.8% of them are one-person businesses without a single employee, and 55% of them are home-based businesses.
This means that there are a lot of small business owners out there doing it all on their own. Even if you don’t ever plan on hiring employees or growing your business into something bigger, it’s beneficial to go ahead and form a business. Business structures like LLCs and corporations provide a lot of benefits to even one-person and home-based businesses, including personal liability protection.
You can find small businesses in every corner of the country. However, some areas have a higher density of small business ownership than others.
Since California has by far the largest population of any state, it should come as no surprise that it has the highest number of small businesses as well; in according to data from the US Census, there are 3.43 million non-employer firms (defined as businesses that have no paid employees other than the business owner) located in California.
Texas comes in second with 2.87 million non-employer firms, followed by Florida with 2.77 million, then New York with 1.78 million.
Some states tend to be more small business-friendly than others. Florida and Texas, for example, both have no state income tax, which may help explain why these states have such high numbers of small businesses. However, small businesses are the economic backbone of every state in the country, and it’s possible to create a thriving small business no matter which state you reside in.
The United States is a melting pot of all demographics, and the country’s small business owners reflect this fact. However, some demographics tend to be more likely to start small businesses than others.
59% of small business owners in the United States are male, and 41% are female, highlighting a gender disparity that, while narrowing over time, still persists..
When it comes to ethnicity, the majority of small business owners (67.5%) are white. Among minority groups, Hispanics account for the most small business owners, followed by Blacks.
Middle-aged people are more likely to open a small business than those in other age groups. This trend may be attributed to factors such as greater access to financial resources, accumulated professional experience, and more established networks, all of which can provide a strong foundation for starting and sustaining a business.
People who live in urban areas are also more likely to start small businesses; 83% of the population lives in urban areas, but 88% of all small businesses are urban-based. This is a gap that’s been widening in recent years, reflecting the ongoing trend of urbanization in the country.
According to our own research, over 7 out of 10 small businesses in the United States have no employees and are not planning on hiring soon.
These one-man or one-woman shows are run entirely by their owners, which is why it’s been said before that small business owners typically have to wear a lot of different hats. Even among small businesses that have grown to hire one or more employees, many of them started out as non-employer firms.
Every small business in the United States has fewer than 500 employees. This is due to the simple fact that if a company employs more than 500 people it is no longer classified as a small business, even if that’s how it started out.
Business size is a major factor when it comes to the average revenue of small businesses.
For non-employer firms, the average annual revenue is $49,489.
If a company has up to four employees, however, this average jumps all the way up to $387,000 per year.
Small businesses that employ 10-19 employees, meanwhile, generate an average of $2,164,000 per year in revenue.
You can also find a lot of income disparities when looking at only non-employer firms. For example, 78% of all non-employer firms earn less than $50,000 per year in annual revenue, and only .2% generate more than $1 million annually.
In perspective, however, these numbers make sense; for most businesses, it isn’t possible to scale to millions of dollars in revenue without having to bring on a single employee. In other words, it’s entirely possible to scale your non-employer firm into a business that generates much higher than the average—you just probably won’t be a non-employer firm anymore once you do!
According to our research, the fastest-growing industries for small businesses in 2025 are clothing and consulting.
There are a lot of different things that can potentially explain these trends. For clothing, the rapid growth of eCommerce has certainly played a role in making this an attractive industry for small businesses. Selling clothing online helps level the playing field for small business owners, allowing them to serve a large customer base without having to open numerous locations.
Consulting, meanwhile, is often a natural transition to business ownership for people who were previously employed by another company. If a person gains a lot of experience at their job as a marketer, for example, they may be well-positioned to start a marketing consulting business.
We’ve already mentioned the rapid growth of eCommerce, and it’s a fact reflected by all businesses, not just small ones; today, over 51% of all business in the United States is conducted online, meaning that, for the first time in history, our economy exists more in the digital space than it does in the physical one.
However, it’s interesting that only 14% of small businesses have an online store or eCommerce option.
One explanation for this is the fact that most small businesses serve their local communities rather than a broad demographic of customers. From restaurants to gift shops to automotive repair, these businesses don’t necessarily need an online store because all of their customers are located in the same area.
With that said, most small businesses today do have a website, even if they don’t operate an online store—and the number of small business owners who choose to create a website has been steadily growing over the years. In 2018, only 50% of small businesses had a website, compared to 71% in 2021.
In 2025, small businesses are faced with a wide range of both challenges and opportunities. Inflation and global supply chain issues continue to strain the margins of small businesses, driving up costs of products and materials nearly across the board.
At the same time, advances in technology are helping to level the playing field for small businesses and create unique growth opportunities. Thanks to tools like AI-powered analytics, digital marketing platforms, and eCommerce integrations, small business owners can now accomplish what would once require an entire team of employees to do.
Changes in consumer preferences is also creating opportunities for small businesses to differentiate themselves from large corporations. Many of today’s customers are more willing than ever to support local, eco-friendly businesses.
In fact, 66% of U.S. customers say sustainability is a priority for them when making purchases, and one survey found that customers are willing to spend an extra $150 a month on average to buy local.
It’s always important to do your research before starting a new business, and checking out small business statistics is a great place to start. While the stats for small businesses in 2025 highlight several key challenges, they also showcase that small businesses continue to thrive in the United States and that there are plenty of opportunities available for them to capitalize on.
When you’re ready to form your small business and make your contribution to these statistics, Tailor Brands can help! Check out our business formation services to see how easy and affordable we make the process of starting a new business in all fifty states.
This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness. It also does not indicate any affiliation between Tailor Brands and any other brands, services or logos.
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