What Percentage of Small Firms Succeed or Fail? Take Our Quiz

By the Editorial Team · Monday, October 26, 2026

In 2022, the U.S. had about 36.2 million small businesses, with over 82% operating without paid employees and more than 75% surviving their first year. These figures highlight the sector's economic importance and reveal varying survival rates by industry, along with evolving demographics showing increased diversity among business founders.

Small businesses represent a significant component of the United States economy, with recent data underscoring their scale and survival trends. According to U.S. Census Bureau figures from 2022, there were approximately 36.2 million small businesses nationwide. These are defined as companies with 499 or fewer employees. By comparison, businesses with 500 or more employees total about 21,000.

A substantial majority of these small enterprises operate without any paid employees. In 2022, nearly 30 million, or 82.4% of small businesses, were classified as nonemployer firms, meaning they are typically sole proprietorships or independent contractors.

When it comes to longevity, data from the Bureau of Labor Statistics (BLS) show that over three-quarters of new small businesses survive beyond their first year. Specifically, the one-year survival rate stood at just over 75% for businesses that began operations in the year ending March 2025. However, the likelihood of survival decreases over time. Approximately 45% of these businesses continue operating after five years, and this rate falls to about 35% over a ten-year span.

Survival rates vary considerably by industry. Agriculture, forestry, fishing, and hunting exhibited the highest one-year survival rate at 85.7%, with 61.8% of businesses surviving for five years and 53% lasting a decade. Conversely, the information sector—which encompasses industries such as motion pictures, publishing, data processing, and web hosting—reported the lowest survival figures, with a 71.6% rate at one year and 45.7% at five years.

Demographic data shed further light on small business ownership. Among founders in 2020, the largest age group was those aged 45 to 54, accounting for 26.7%. Women comprised approximately 40.4% of new business founders as of 2025, reflecting gradual progress in gender representation among entrepreneurs. Regarding racial and ethnic composition, Hispanics made up 26% of small business owners last year, compared with a 46.4% share held by white entrepreneurs.

These statistics provide a comprehensive view of the small business landscape, highlighting both the dynamism and challenges faced by this vital sector of the U.S. economy.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.