13 Current Small Business Statistics for 2021

Katie Allison
December 8, 2021
Customer Success, Reviews & Research

13 Current Small Business Statistics for 2021

Despite their title, the impact small businesses have on the U.S and global economies is anything but. Small businesses account for 99.9% of U.S.-based businesses. Small businesses are defined as businesses with fewer than 500 employees by the U.S. Small Business Administration, or SBA.

As with most things in the world, entrepreneurs and their small businesses have faced new challenges throughout the COVID-19 pandemic. Many individuals used the pandemic as their opportunity to be their own boss and turn that passion project into a business, as new business applications trended up in late 2020. The statistics below show how small businesses are evolving to meet these challenges.

Top 13 Small Business Statistics for 2021

Because of their size, small businesses are more dynamic than their larger corporate counterparts. The small business space changes more rapidly and dramatically than the corporate world.  As such, the stats provided below are from 2020 and 2021 to give the most up to date information possible.

  1. 78% of small business owners expect their business to survive the pandemic, while 4% expect their businesses to fail (Guidant Financial, 2021).
  2. Shoppers spent roughly $19.8 billion at small businesses on Small Business Saturday in 2020 (American Express, 2020).
  3. 61% of small businesses received funding from the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL)  (Guidant Financial, 2021).
  4. Small businesses generally have 2-5 employees, with 44% of small businesses falling into this range (Guidant Financial, 2021).
  5. 50% of shoppers on Small Business Saturday reported that they supported a local business by posting on social media, or made a purchase from a small business they saw on social media (American Express, 2020).
  6.  Small businesses make up 46.8% of employees and 39.7% of payroll in the United States (U.S. Small Business Administration, 2021b).
  7. ​​Small businesses were responsible for 62% of job creation between 1995 and 2020 (U.S. Small Business Administration, 2021a)
  8. 39% of small business owners used cash to start their business, which is the most popular form of small business financing (Guidant Financial, 2021).
  9. Of the 15 million job losses reported in Q2 2020, 8.6 million were from small businesses (U.S. Small Business Administration, 2021a).
  10. In 2020, 26.02% of federal contracting funds went to small businesses (U.S. Small Business Administration, 2021a).
  11. 87% of small businesses are owned by Gen X (46%) and Baby Boomers (41%). Millennials hold 14% and Gen Z have just 1% (Guidant Financial, 2021).
  12. 56% of shoppers made an online purchase on Small Business Saturday in 2020 (American Express, 2020).
  13. 32% of small businesses accept cryptocurrencies as payment (Skynova, 2021).

Small Business News and Developments

While most small businesses have 5 or fewer employees and may not be seeking to expand their workforce, a number of companies that started small are branching out. The companies discussed have fewer than 10 employees as of December 2021, despite their newly enlarged budgets. These small businesses all raised millions of dollars to back their products that are made for small businesses.

Gryphon – Crowdfunded Security for Small Businesses and Parents

San Diego-based startup Gryphon launched a Reg A crowdfunding campaign in early 2021 with the aim of raising $10 million. Gryphon provides hardware and software aimed at making parental controls and network security easier for parents and small business owners. 

Their cloud-based service utilizes their routers and mobile app and is designed to be easy to use for those without a tech background. Beyond their innovative ideas, Gryphon is one of many examples that small businesses can raise serious cash through non-traditional means, such as crowdfunding.

Cashbook is Digitizing Bookkeeping in India

Small businesses are a massive market segment outside of the United States as well, with India-based Cashbook securing roughly $2.2 million in seed funding in September of 2021. Cashbook provides a cash account option for the roughly 60 million small businesses in India. 

Most of these businesses still operate with pen and paper for their bookkeeping, but Cashbook is looking to change that. Adoption may seem like a challenge in a country where only 11% of people own a computer, but Cashbook’s easy to use mobile platform is a potential solution. They launched in late 2022 and have amassed 200,000 monthly users. In February of 2021, the app processed $511 million in cash transactions, indicating that they are amassing a loyal following in a market with huge potential for growth.

Hopscotch Bounces into Big Money

Hopscotch, a fintech startup, recently announced seed funding of $3.6 million. While there have been significant advances in payment tools recently, Hopscotch founders saw a gap and decided to fill it. Hopscotch thinks that existing B2B payment solutions are too slow and costly. Their product, which offers fee-free transfers for small businesses, was created to rectify this. 

The funding raised by Hopscotch indicates that the market for products for small businesses is growing. This demonstrates that small businesses are seeking streamlined, easy to use solutions that were previously only available to larger enterprises.

Small Business Trends to Watch in 2021


The rise in eCommerce that resulted partially from the Covid-19 pandemic is unlikely to reverse even as brick and mortar stores open their doors. This is not unique to the small business space, nor should it be surprising to anyone who has used Amazon. Customers like that they can easily place an order online and feel confident that whatever they desire will show up at their front door.

The rise of eCommerce presents some of the biggest challenges for small businesses. They must compete with behemoth corporations who can ensure packages arrive within days, and in some cases hours. Small business owners will need to provide exceptional online customer service in addition to all of the other hats they wear at their company. Further, shipping is harder since small businesses don’t have their own fulfillment centers or fleets of delivery vans at their disposal. 

Despite the challenges, a strong online presence can be a boon to any small business, regardless of whether it is a retail-based company. This online presence can connect them to customers across the globe rather than just those in their local community. Expect e-commerce to continue to grow and to provide opportunities for increased cash flow and growth for small businesses that successfully build an online presence. In the future, many small businesses must leverage the power of eCommerce, or risk being left behind.

Remote Work

As with larger companies, small businesses were forced to adapt to remote work wherever possible during the pandemic. Just like with larger companies, many remote employees want to stay remote. Remote work created financial challenges that were more difficult for smaller businesses. Many small companies did not have work from home procedures implemented or the technology in place to allow for work from home. 

Almost two years into the pandemic, small businesses have had time to adapt and they are seeing unexpected advantages. Remote work resulted in increased productivity and access to a larger pool of talent for open roles, since they can hire qualified individuals regardless of their location. Given the benefits of remote work and the fact that employees want remote options, remote or hybrid work is likely to remain the norm for small businesses whenever possible.

Alternative Payment Options – Crypto is Coming

There was a time in the not too distant past where we where many of us were wearing rubber gloves to the grocery store and wiping down every bag with disinfectant. There was likely a sign in the store saying that cash would only be accepted if you had exact change due to a currency shortage, and nobody wanted to touch the cash because of potential germs. As such, it is no surprise that customers are demanding alternative payment options, preferably contactless ones. 

Payment options are constantly evolving, and to keep up small businesses need to branch out to keep up. While most customers aren’t expecting their local mom and pop shop to branch out and start accepting crypto, alternative payments such as payment apps, contactless card transactions and cryptocurrencies will become increasingly popular. Many businesses will continue the trend of going entirely cashless. 


About the Author

Katie Allison
Katie leads the TrustRadius research team in their endeavors to ensure that technology buyers have the information they need to make confident purchase decisions. She and her team harness TrustRadius' data to create helpful content for technology buyers and vendors alike. Katie holds multiple degrees from the George Washington University with a BA in International Affairs and an MA in Forensic Psychology. When she’s not at work, you will either find her on an adventure with her two rescue dogs, or on the couch with a new book.

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