52 Local Business Statistics For 2023 (Verified and Updated)
Small businesses are an essential part of the US economy, constituting a large portion of the country’s gross domestic product. If you are an aspiring entrepreneur who wants to start your own business, you first need to understand the local business landscape to thrive in it.
As a digital marketing agency specializing in local SEO, we have helped law firms, plumbers, contractors, and other kinds of businesses across cities — from Miami to the most competitive metropolitan markets in the country. Here are the local business statistics and facts we want you to know for running a successful company:
Related: Digital marketing statistics
Whether you’ve a business in New York, Los Angeles, or any other competitive local market such as personal injury, here are some local business stats to gain a broad perspective of the overall small business space in the US.
1. Small businesses constitute 99.9 percent of all companies in the US. (SBA 2021 Small Business Profile)
2. There are 32.5 million small businesses in the US. (SBA 2021 Small Business Profile)
3. Small businesses accounted for 909,808 openings and 843,229 closings between 2019 and 2020 in the US. (SBA 2021 Small Business Profile)
4. Small businesses gained 9.1 million jobs and lost 8.7 million, for a net increase of 466,607 jobs between 2019 and 2020 in the US. (SBA 2021 Small Business Profile)
5. The demographic makeup of small business owners in the US, as per the Small Business Administration. (SBA 2021 Small Business Profile)
6. The impact of the great resignation and what small businesses are doing about it. (Guidant Financial)
7. 65.3% of US small businesses are currently profitable. (Guidant Financial)
8. Here are the top plans US small businesses have as of 2022 for developing their business. (Guidant Financial)
9. By September 30, 2023, the SBA will increase the number of loans for disaster assistance by 20 percent from 2022. (SBA Strategic Plan 2022-2026)
10. Based on a survey, half of the survey respondents say that the speed of settlement is a key benefit when receiving payments via electronic methods from customers. Other benefits include:
- Straight-through processing to A/P or A/R and general ledger (cited by 31 percent of respondents)
- Improved cash forecasting (30 percent)
- Improved matching for cash application (27 percent)
- Improved supplier/customer relations (26 percent)
11. 86% of business owners said their businesses are an important part of their larger American dream. (Xero)
Now that we have successfully gotten an overview of small local businesses, we are in a position to dive deeper and understand the kind of growth they experience and the earnings of their owners, as well as how the owners think their businesses will do in the future.
Understanding these will hopefully help you understand how your own potential business could be expected to perform.
1. Real economic growth remains solid, over 6% as of 2021 quarter 2, and is higher than pre-pandemic levels now. (NFIB Small Business Economic Trends)
2. Seasonally adjusted, a net 38 percent reported raising compensation as of 2021, as businesses come out of the clutches of the pandemic. (NFIB Small Business Economic Trends)
3. The Optimism index was 99.7 as of July 2021, when businesses were surveyed on how optimistic they felt about the future. (NFIB Small Business Economic Trends)
4. Small businesses plan to hire employees, with a seasonally adjusted net 20% planning to create new jobs as of 2022. (NFIB Small Business Economic Trends)
5. Overall, 64% of small businesses reported hiring or trying to hire in July 2022. (NFIB Small Business Economic Trends)
6. Job opening in terms of percentage of the industry that is hiring. (NFIB Small Business Economic Trends)
7. The average small business owner takes a salary of $60,648. (Payscale)
Upon wrapping up the discussion on the growth of local businesses, we need to figure out what kind of marketing local businesses plan on using or already using to achieve that growth.
Moreover, as the world turns more digital with every passing day, local businesses are taking heed and adapting themselves accordingly. If you want to have your businesses perform well, you need an idea of your competitors’ digital strategies already in use.
1. 63% of respondents have added or transitioned to digital/online operations in the past year. (Verizon)
2. 59% have provided devices or technology to help employ or retain talent in the past year. (Verizon)
3. 65% say the revenue their business generates through digital operations is higher now than before the pandemic. (Verizon)
4. These are some lead generation tactics that small businesses want to adopt to market themselves. (Connect 365)
5. Over 50% of businesses listed that the two main causes for lack of follow-through with their customers were these:
- They did not know where to begin.
- They did not have enough time. (Connect 365)
6. 57% of the small business owners who took part in a recent survey said they spend between 1% and 10% of their gross annual revenue on their marketing budget. (Intuit QuickBooks)
7. 68% of small business owners said in a recent survey that each marketing initiative had a measurable goal. (Intuit QuickBooks)
8. In a recent survey of consumers, 52% said that they were annoyed by local businesses’ ads or social media marketing, but 54% also said that they did not have a problem with it. (Intuit QuickBooks)
The great resignation is here to stay, and as small businesses scale digitally, they are adopting remote work strategies as they sync their businesses to the online revolution.
Here are a few things they have done in response to the great resignation that is important for you to know so you can also adopt similar strategies.
1. Nearly 40% of respondents have added net-new long-term remote work or flex work hours during the pandemic. (Verizon)
2. 79% are either offering or planning to offer incentives and new benefits to attract or retain employees. (Verizon)
We just looked at how local businesses are marketing themselves and how they are adapting to the digital age to persist in their efforts to grow. Now we look at a few stats that will help shed light on what customers think of these initiatives and how they shop at local stores in this new digital age.
1. When deciding to buy something from a local business, this is how often customers check the business’s website.
- 22% of consumers check websites every time they are deciding on a local business
- 76% look at local business websites at least half of the time
- Only 8% of consumers never look at websites when choosing a company (BrightLocal)
2. Most commonly searched for local businesses on the web. (BrightLocal)
3. The sources customers use to find local businesses.
- 64% of consumers have used Google My Business listings to find a local business’s address or phone number
- 87% of consumers have looked for a phone number or address online
- 49% of consumers visit local business websites to find contact details (BrightLocal)
4. 91% of customers are irritated if these aspects are wrong on a local business website. (BrightLocal)
5. During the pandemic, almost 90 percent of consumer packaged goods grew from small and medium-size brands. (McKinsey & Company)
6. Based on a 2020 study, 11% of consumers support local businesses, which is why they tried a new brand. (McKinsey & Company)
If you’re still not sure about supporting small businesses, these are the broader economic small business stats that will convince you.
1. Small businesses account for exports of goods worth $459.6 billion, making up 31.6 percent of exports by identified firms. (U.S. Small Business Administration)
2. Small businesses employ about 63.5 million employees in the US. (U.S. Small Business Administration)
3. Small businesses employ 46.8 percent of US employees in their local economy. (U.S. Small Business Administration)
4. In 2019, banks issued $87.1 billion loans to US small businesses. (U.S. Small Business Administration)
5. Local businesses contribute to 44% of US economic activity, roughly $10 trillion. (U.S. Small Business Administration)
By now, we have a great idea about how the local businesses perform, how they market themselves, their impact on the nation, etc.
However, the normal operations of small local businesses halted due to the pandemic, and their operations changed significantly. Now let’s look at local businesses in the context of the COVID pandemic.
1. Below is what the US business owners think of the impact of the pandemic in their business, as per Guidant Financial’s survey. (Guidant Financial)
2. 33% of small businesses report large negative effects while 44% report Moderate negative effects due to the pandemic. (Small Business Credit Survey 2022)
2. Economic relief programs stemming from the COVID-19 pandemic increased the SBA’s operational loan portfolio to more than $1.1 trillion in an effort to support small businesses (SBA Strategic Plan 2022-2026)
3. The SBA will promote and leverage its forgiveness platform to forgive nearly $1 trillion in Paycheck Protection loans. (SBA Strategic Plan 2022-2026)
4. During COVID-19, 43% of businesses had temporarily closed, and nearly all of these closures were due to COVID-19, as per a survey. (PNAS)
5. Businesses reported having reduced their active employment by 39% during the pandemic, based on a survey. (PNAS)
6. A survey of small businesses showed that 70% of respondents anticipated taking advantage of aid during the pandemic. (PNAS)
7. Months of cash flow available to small businesses after the start of the pandemic in the US. (PNAS)
8. 85% of employer firms experienced financial challenges in the prior 12 months, as of 2021. (Small Business Credit Survey 2022)
9. Small business owners work has increased manifold as revenues remain below pre-pandemic levels for 63% of firms, and they struggle to make ends meet as of 2021. (Small Business Credit Survey 2022)
10. 21% of firms reported, as per a survey, that their finances were very poor due to the impact of the pandemic. (Small Business Credit Survey 2022)
11. 72% of local business owners asked for government sponsored financial assistance during the pandemic, as per the United States Census Bureau. (2021 Annual Business Survey)
12. As per the survey of GGV Capital, however, only 52% applied for government sponsored financial assistance. (GGV Capital)
13. As per a survey of 4100 small companies, 45% reported laying off employees due to the pandemic, though 90% said that they would hire in 2021. (GGV Capital)
Nearly half of small businesses fail within the first five years. However, don’t let that dishearten you. If you get a good understanding of your target market and execute a sound marketing strategy, you can succeed.
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