The strengthening United States economy in recent years has nurtured many opportunities for entrepreneurs, with the number of small businesses in the US on the rise.

In 2020, the number of small businesses in the US reached 31.7 million, making up nearly all (99.9 percent) US businesses.

This is also representative of the sustained growth as it marks a 3.15 percent increase from the previous year and a growth of 7.09 percent over the three-year period from 2017 to 2020.

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Small Business Employees in the US

Small enterprises play an extremely significant role in the US economy and are vital to economic development and job creation.

Although the majority of small businesses hire fewer than 100 employees, they are responsible for millions of new jobs created over the past few years. 

In fact, there are currently 60.6 million small business employees in the US, which make up approximately half (47.1 percent) of the US workforce. 

In 2019, US small businesses added 1.6 million new jobs. Companies with fewer than 20 workers were responsible for the majority of them, providing 1.1 million new jobs. In other words, more than one out of every three two positions being offered are for small businesses with 19 or fewer employees.

States With the Most Number of Small Businesses in the US

With San Francisco, San Jose, and Los Angeles all featuring in the top ten cities in the world that receive the most investment from venture capitalists, it should come as no surprise that California is the state with the highest number of small businesses.

With 4.1 million small businesses, the Golden State is home to nearly 50 percent as many small businesses as Texas, the state with the second-highest number of small businesses in the US.

Here are the states with the most number of small businesses in the US (as of 2020):

  1. California: 4.1 million
  2. Texas: 2.8 million
  3. Florida: 2.7 million
  4. New York: 2.2 million
  5. Illinois: 1.2 million

California’s small business employees make up 48.5 percent of the state’s total employees, which is higher than the national average. Of the total number of new jobs created, nearly 215,000 (around 13.4 percent) were in California. 

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