Frequently Asked Questions About Small Businesses

August 1, 2024

Delaney Sexton
Contributing Editor

Frequently Asked Questions About Small Businesses

The SBA Office of Advocacy published their frequently asked questions about small businesses for 2024. Here are a few of the questions:

How many small businesses are there in the U.S.?

There are 34.7 million small businesses in the country. Of those, 81.9%, or 28.4 million small businesses, have no employees. The other 6.7 million businesses, or 18.1%, have paid employees.

How are small businesses financed?

The Federal Reserve data shows that 71% of small businesses have outstanding debt in 2023, so most small businesses have bank loans. In addition, 33% received financing (investments or loans) from family and friends or used personal savings.

How many business establishments open and close each year?

There were 1.4 million business openings in 2022, and about 1.2 million businesses closed permanently. Startups comprised 15.7% of business establishments in 2022, an increase compared to the 12.5% in 2019.

What is the new business survival rate?

From 1994 to 2021, 67.9% of new businesses survived the first two years. The five-year survival rate was 49.2%, the ten-year survival rate was 33.8%, and the fifteen-year survival rate was 25.6%. When businesses survive five years, nearly 70% go on to survive for ten years. More than three-quarters of businesses that survive ten years will end up surviving 15 years.

Source:
FAQ About Small Businesses 2024 – SBA Office of Advocacy