Small Business Week, which runs from May 3-9, 2026, is a great time to look at what’s happening to small businesses and their owners in the U.S. We hear a lot about small businesses, but what does the term “small businesses” really mean? Some recent reports and findings can fill in the blanks.
Small Businesses Overview
The SBA’s Office of Advocacy released Frequently Asked Questions About Small Businesses: 2026. The facts speak for themselves:
Number of small businesses. There are about 36.2 million small businesses in the U.S., which account for 99.9% of all businesses in the country. But the majority—82.3% (29.8 million firms) have no employees. These are called “nonemployee firms.” The number of small businesses has increased year after year since 2011, and doubled from 1997 when there were 15.4 million firms to 2022 when the number reached 29.8 million.
Employment by small businesses. Small businesses employ 62.3 million people (49.5% of the private sector workforce). Small businesses account for 61% of new job creation.
Economic activity. The economic activity of small businesses accounts for 43.5% of GDP. Small businesses make up 97.2% of exporters.
Demographics of business owners. Women owned 14 million businesses in 2022, which is 40.4% of all businesses. Minority-owned businesses totaled 13 million. Veterans owned 1.7 million, representing 4.8% of all businesses in 2022. About one in four employer firms (26.1%) were family-owned in 2022.
Paperwork and regulations. The average U.S. company pays about $13,000 per employee each year to comply with federal regulations (nearly double that for manufacturers). But small businesses pay more. Small manufacturers or those with fewer than 50 employees have a regulatory cost of $50,100 per employee. And federal paperwork is a killer, costing small businesses over $81 billion in 2025. Over 80% of the paperwork burden stems from the IRS.
Starting up and surviving
Businesses come and go. In 2023, for example, 1.3 million businesses opened, while 1.2 million closed. Of all the businesses in operation in the U.S. in 2023, 14.2% were startups.
The Census Bureau’s recent statistics on business formation showed that the number of business applications for March 2026 was down slightly from the previous month. Still nearly half a million applications (491,941) were filed in the month.
From 1994-2022, an average of 67.7% of new employer establishments survived at least 2 years, 49.2% for 4 years, 33.9% for 10 years, and 25.5% for 15 years. Survival rates differed depending on the demographics of their owners. As firms establish themselves, their survival rates increase: more than two thirds of businesses (69.5%) that reach 5 years reach 10 years, and 76.1% that reach 10 years then reach 15 years.
Happiness of small business owners
VistaPrint found that counter to the narrative of being stressed and overworked, 84% of small business owners report happiness in their roles. In fact, 61% say they’re happier now than when they started their businesses and 83% are happier than when they worked for someone else. Why are small business owners generally happy?
- Freedom to set one’s own schedule
- Doing something they love or are passionate about
- Controlling or improving the certainty of their income
- Being a decision maker or leader
- Interacting with and helping people/customers/society
- Creating and building a brand
- Learning new ways to grow and expand the business
- Learning new things to help improve the way the business is run
Looking ahead
With the turmoil in the economy, and the world, how are small businesses faring? Are owners optimistic or pessimistic? What are the challenges they’re facing? According to NFIB’s Small Business Optimism Index March 2026, the optimism index fell while the uncertainty index rose. Other key findings:
- While 16% of small business owners planned to make capital outlay in the next 6 months, this was down from the previous month.
- Owners reported a decline in sales.
- Owners (62%) reported supply chain disruptions.
- Prices had to be raised due to oil prices and other factors.
- Key challenges are taxes and finding quality labor.
The good news is that 13% of owners rated the health of their businesses as excellent, and 51% said it was good. Only 4% rated the health of their businesses as poor. And there’s cause for optimism: 12% of owners plan to create new jobs in the next 3 months and 11% said it’s a good time to expand.
Final thought
“Behind every small business, there’s a story worth knowing.” ~ Former Speaker of the House Paul Ryan
I love being a small business owner. Sure, there are bad days, and even some bad weeks and months. But each day brings something new…it’s never dull!
More helpful information and resources for small business owners can be found in this list of blogs here.
