As more and more small businesses in the US are established, the number of small business employees has naturally also increased.

In 2023, the number of employees in a small business in the US hit 61.6 million. This means that small business employees make up 45.9% of the total number of US employees.

This marks a 0.2% decrease from 2022’s 61.7 million and is the first annual fall in at least six years. It also follows one of the slowest increases—in 2022, the number of small business employees in the US rose by a marginal 0.8%. In comparison, the growth rates for 2021 and 2020 were 1%  and 1.2%, respectively.

From 2017 to 2023, the US economy added 3.7 million small business employees to its workforce—a 6.4% increase over the entire period. 

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How many employees does a small business have?

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

Most small businesses in the US have no hires. This means that they are a one-person-run operation. Of the 33.3 million small businesses in 2023, 27.2 million (81.6%) have no employees. Just under 5.5 million between one and 19 employees, and the remaining 648,000 have between 20 and 499 employees.

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Number of employees in a small business by state

As the US’s most populous state with nearly 40 million residents, it should come as no surprise that the West Coast state of California is also home to the biggest number of small business employees. There are 7.5 million of them in California, which is 47.6% of the state’s total number of employees. 

The state with the second-highest number of employees in a small business is Texas. At 5 million, they represent 44.3% of the state’s total number of employees. New York has the third most small business employees with 4.1 million, while Florida comes in fourth with 3.6 million. Pennsylvania is in fifth place with 2.6 million.

At the bottom of the list, Wyoming is the state with the fewest small business employees. Here are the five states with the fewest employees in a small business:

  1. Wyoming: 133,159
  2. Alaska: 138,752
  3. Vermont: 155,960
  4. North Dakota: 198,871
  5. Delaware: 205,354

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