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 2021, the number of small businesses in the US reached 32.5 million, making up nearly all (99.9 percent) US businesses.

The increase in the number of small businesses in the US in 2021 is representative of the sustained growth as it marks a 2.5 percent increase from the previous year and a growth of 9.8 percent over the four-year period from 2017 to 2021.

According to the US Small Business Administration, “small businesses” are defined as “firms with fewer than 500 employees.”

Of all the small businesses there are in 2021, around 37 million of them have fewer than 100 employees.

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Small Business Employees in the US

Small enterprises play a 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 61.2 million small business employees in the US, which make up approximately half (46.8 percent) of the US workforce. 

States With the Most Number of Small Businesses in the US

With San Francisco, Los Angeles, and San Jose 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 4.2 million small businesses, the Golden State is home to 40 percent more small businesses than 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 2021):

  1. California: 4.2 million
  2. Texas: 3.0 million
  3. Florida: 2.8 million
  4. New York: 2.3 million
  5. Illinois: 1.2 million

California’s small business employees make up 48.2 percent of the state’s total employees, which is higher than the national average. Over the past year, businesses in California added a total of 103,514 jobs. Of these, 86,81 (83.9 percent) were from small businesses.

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