The American economy is powered by small businesses. These are companies with fewer than 500 employees, run by regular people who dream big.

We call them “mom and pop” shops, even though nowadays they can be run by anyone. The question is, just how many of these little guys are out there?

Turns out, a lot! Keep reading to learn more about America’s small business landscape.

Defining Small Businesses

The term “small business” applies to companies with under 500 employees. This covers most businesses in America.

In fact, the vast majority have fewer than 20 workers. When we picture a classic mom-and-pop shop, it’s often just a handful of people.

The legal definition comes from the Small Business Administration (SBA). They set policies and programs to support entrepreneurs across the country.

Another key term is “establishment.” This refers to a single location where business takes place. One company can have multiple establishments in different areas.

By the Numbers: How Many Exist Today?

Now for the big question:

Just how many small businesses with fewer than 500 employees exist in America today?

According to the Census Bureau’s County Business Patterns program, there were 7.9 million such establishments in 2019. That’s up slightly from 7.89 million in 2018.

This covers all kinds of businesses across most sectors of the economy. From retail stores to professional services, healthcare, accommodation food, and more.

Nearly 1.21 million of these establishments are women-owned.

3.5 million are owned by men.

And over 1 million are minority-owned:

• 134,100 have Black or African-American owners
• 581,000 have Asian owners
• 347,000 have Hispanic owners

As you can see, small business ownership spans all genders, races, and backgrounds. The American dream belongs to everyone.

Now let’s break things down even further.

Most Small Businesses Are Really Small

Within that 7.9 million figure, most companies are truly mom-and-pop or even “mom and me” operations.

The latest data shows that:

• 3.7 million businesses have 1-4 employees
• 2.8 million are sole proprietorships
• 1.7 million have 5-9 employees
• 1.3 million have 10-19 employees

That’s over 9 million businesses with fewer than 20 people. The remaining 1.9 million have 20-499 employees.

As you can see, the vast majority of American small companies are quite small. Just a handful of dedicated folks pursuing their dreams and serving their communities.

This means policies that support small businesses have an outsized impact across the country. Entrepreneurs everywhere depend on a healthy climate to survive and thrive.

Small Business Snapshot

County Business Patterns provides an intriguing snapshot of America’s small business landscape. Here are some fun facts from the 2019 data:

• California leads with 865,435 small business establishments. Texas comes in second with 669,011.
• Jefferson County, TX has the fewest of any county with just 55. Meanwhile, Los Angeles County, CA tops the list with 209,308.
• The most common kind of small business is full-service restaurants, with over 121,000 establishments.
• Other leading industries include lawyers, physicians, truck transportation, and religious organizations.
• Nearly every sector includes small businesses. Even heavy manufacturing has over 10,000 companies with under 500 employees.

This shows just how vital small companies are across the board. From restaurants and laundromats to machine shops and doctor’s offices, they permeate every corner of the economy.

The Pandemic’s Impact on Small Business

Of course, the COVID-19 pandemic has hit many of these small enterprises hard. Uncertainty and reduced sales have challenged owners nationwide.

The Census Bureau tracked this impact through its Small Business Pulse Survey. Comparing 2021 to 2022 shows some interesting trends:

• In January 2021, 40.4% of small businesses reported decreased revenues in the prior week. In January 2022 this number dropped to 33%.
• However, the share reporting decreased employees rose slightly from 12.4% to 13.5% between 2021 and 2022.

This shows that while revenues are rebounding, employment levels have been slower to recover. There’s still progress to be made.

Small businesses have endured despite all obstacles. The resilience and determination of America’s 7.9 million entrepreneurs keep driving the economy forward.

Celebrating Small Business Impact

The sheer number of small enterprises in the U.S. proves their value. But they do far more than just generate statistics.

Local businesses keep communities thriving through:

• Jobs: Small companies created 1.9 million net new jobs in 2018. That’s well over half of the total.
• Local Focus: Mom and pops invest in their towns and give back. Dollars spent there stay there.
• Innovation: Small size spurs creative solutions. Entrepreneurs invent new products and services daily.
• Representation: Diverse owners reflect American diversity and bring new perspectives.

For all these reasons and more, small businesses deserve to be celebrated.

The Story Behind Mom & Pop Business Owners Day

That’s exactly what Rick and Margie Segel aimed to do when they founded Mom and Pop Business Owners Day back in 1939.

That year, the couple opened their own small business – a hat shop in Philadelphia. They wanted to honor their parents, who also ran a corner store.

Decades later, this unofficial holiday on the first Saturday of March continues to recognize the contributions of family businesses across the country.

It’s a testament to the power of the American entrepreneurial spirit. Eighty-three years later, that spirit remains stronger than ever.

Support Your Local Small Businesses

So next time you need a cup of coffee, a haircut, a package delivered, a house repaired, or really any product or service, think small.

Look to the local mom and pops who create jobs, reinvest locally, and make your community a great place to live and work.

There are almost 8 million such businesses across America, just waiting for your support. Together, we can ensure these bedrocks of the economy come back stronger than ever.