47 Statistics On Small Business Buyer Demographics

Understanding the demographics of small business buyers is essential for anyone looking to sell or buy a business.

Here, we dive into 47 statistics that highlight key details about small business owners, their backgrounds, and the challenges they face. 

These insights provide a clear picture of the diverse landscape of small business ownership and can guide strategic decisions for both buyers and sellers in today’s market.

Number and Employment

Small businesses make up a significant portion of the U.S. economy, employing nearly half of all private sector employees.

1. There are over 33.2 million small businesses in the United States (3).
2. Small businesses employ 61.7 million Americans, which is about 46.4% of all private sector employees (3).

Ownership Demographics

Most small businesses are owned by individuals over 40, with the majority being male business owners.

3. 63% of small businesses in America are owned by people over 40 years old (1).
4. The average age of small business owners is around 44 years old (2).
5. 77% of small business owners are male, while 26% are female (4).

Generation

Generation X represents the largest group of small business owners, followed closely by Baby Boomers and Millennials.

6. 47% of small business owners are from Generation X, 37% are Baby Boomers, and 16% are Millennials (2).

Education

The educational background of small business owners varies, with most holding at least a Bachelor’s degree or higher.

7. 44% of small business owners hold up to a Bachelor’s degree (2).
8. 27% hold a Master’s degree (2).
9. 15% have a high school diploma or GED (2).
10. 11% hold an Associate’s degree (2).
11. 4% are Doctorate holders (2).

Ethnicity and Race

The majority of small businesses are owned by white individuals, with Asian Americans and Hispanics owning a smaller portion.

12. 85% of businesses in the U.S. have majority-white ownership (2).
13. Asian Americans own around 11% of small businesses (2).
14. Hispanics or Latinx own around 7% of small businesses (2).
15. Black or African Americans own around 3% of small businesses (2).

Gender

Women play a substantial role in small business ownership, accounting for nearly half of all small enterprises.

16. Almost 49% of small enterprises are women-owned businesses (1).
17. Women own around 43.2% of all small businesses in the U.S. (3).

Minority Ownership

Hispanics, Asians, and African Americans together own a notable percentage of small businesses, though these numbers are still lower compared to other groups.

18. Over 14% of small companies are owned by Hispanics and Latinos (3).
19. About 6% are owned by Asians (3).
20. A marginally smaller number of businesses is owned by African Americans (1).
21. Asians own around 581,200 small businesses (3).
22. Hispanics own around 346,836 small businesses (3).
23. African Americans own around 134,567 small businesses (3).

Veteran Ownership

Veteran-owned businesses represent a small but important segment of the small business landscape, employing millions of people.

24. 5.7% or 331,151 of all small businesses are veteran-owned, employing around 4 million employees (3).

Funding and Financing

Most small businesses are self-financed, with a smaller percentage relying on bank loans or personal connections for startup capital.

25. Almost four-fifths of small business owners were self-financed when launching their businesses (2).
26. 16% were funded by bank loans (2).
27. Loans from family and friends made up the remaining 2% to 6% (2).

Business Location

Texas, California, and Florida are home to the largest concentration of small businesses in the U.S.

28. Texas is home to one-tenth of all small businesses in the U.S., followed by California (9%), Florida (9%), and Georgia (6%) (2).

Business Survival and Failure

While many small businesses close within five years, a significant portion remains successful over the long term.

29. Around 18% of small businesses will fail within a year of opening (2).
30. Half fail after five years, and approximately 65% after operating for up to 10 years (2).

Political Affiliation

Small business owners lean towards the Republican party, though a notable number remain unaffiliated.

31. More small business owners are Republican than any other party affiliation — 19% are Democrats, 5% are Libertarians, and a third say they are unaffiliated with any party (2).

Confidence in Business Survival

Despite economic challenges, the majority of small business owners are confident in their ability to survive.

32. Around 77% of small business owners believe their businesses will survive the current economy, while 5% do not. Only a third have real confidence in their business (2,4).

Business Growth and Expansion

Many small businesses plan to expand in the coming year, particularly through hiring and digital marketing investments.

33. 24% of businesses plan to increase staff in 2024, while 18% will invest in digital marketing. 17% are set to expand or remodel their businesses (2).

New Business Types

A mix of new independent businesses, franchises, and bought businesses make up the current landscape of new small businesses.

34. 27% of new small businesses will be new independents, while 31% will be bought independent businesses. Just under a third will be new franchises, and one in 10 new small businesses will be bought existing franchises (2,4).

Challenges

The rising cost of goods, services, and wages is a top concern for small business owners.

35. The biggest challenge for small businesses is the rising cost of goods, services, and/or wages, with four in five respondents selecting this option (2).
36. 74% of small business owners report their costs have gone up over the previous year (3).

Labor Market

Labor market conditions remain tough, with many business owners feeling the effects of minimum wage increases.

37. 47% of businesses say the labor market is not improving (3).
38. 48% say recent increases in state minimum wage have hurt their business (3).

AI Adoption

Although AI offers efficiency improvements, most small businesses have yet to adopt this technology.

39. Most small businesses (83%) are not using AI yet, despite its potential to boost efficiency and decision-making (4).

Business Happiness

Despite challenges, a large percentage of small business owners report feeling happy with their work.

40. A significant majority (73%) of small business owners reported feeling happy, with 36% very happy and 37% somewhat happy (4).

Team Size

Most small businesses are run by solo entrepreneurs or maintain small teams of under five employees.

41. 21% of small businesses are run by solo entrepreneurs (4).
42. Most businesses (36%) maintain small teams of 2-5 employees (4).

Industry Distribution

Retail, food services, and health-related industries are the top sectors for small business activity.

43. The top 3 industries for small businesses are Retail, Food and Restaurants, and Health & Beauty/Fitness (4).

Revenue and Profitability

Small business owners generally earn above the national average salary, though only a portion of businesses are profitable.

44. Small business owners earn an average salary of $69,119, which is 16% higher than the national average wage of $59,428 (4).
45. Only 65% of businesses are currently profitable (4).

Debt Load

Many small businesses carry relatively low levels of debt, often below $50,000.

46. A significant portion (60%) of small businesses carry a debt load of $50,000 or less (4).

Economic Confidence

Confidence in the political climate remains low among small business owners, with many expressing dissatisfaction with current policies.

47. One in 10 small business owners approve of the Biden Administration’s response to the economy, but 60% dislike it. Overall, 46% of small business owners are not confident in the political climate of today (2).

Conclusion

These 47 statistics offer valuable insights into the demographics and challenges of small business ownership, revealing the diverse backgrounds, industries, and economic conditions that shape this landscape. 

Whether you’re a buyer, seller, or entrepreneur, understanding these statistics can help you make informed decisions and navigate the small business market with greater clarity. 

With economic and market conditions in flux, staying aware of these trends is more important than ever for long-term success.

Sources:

1. https://nawbo.org/expert-reviews/blog/small-business-statistics/
2. https://www.usatoday.com/money/blueprint/business/business-formation/small-business-statistics/
3. https://www.nerdwallet.com/article/small-business/small-business-statistics
4. https://luisazhou.com/blog/small-business-statistics/
5. https://www.re2.ai/post/small-business-statistics
6. https://www.forbes.com/advisor/business/small-business-statistics/
7. https://www.searchlogistics.com/learn/statistics/small-business-statistics/
8. https://www.fedsmallbusiness.org/reports/survey/2024/2024-small-business-data-chartbooks