May is Small Business Success Month in the United States, and there’s a lot to celebrate. Small firms make up the majority (more than 99 percent) of all businesses in America and provide jobs for tens of millions of people (“half of all U.S. employees are employed by a small business,” notes a Forbes.com article.)
Small businesses range from mom-and-pop corner stores to high-tech startups run by computer nerds with dreams of becoming the next Microsoft. Small businesses can be organized as a sole proprietorship, a partnership, a corporation, or other legal entities.
To qualify as a small business, a firm must be independent and have fewer than 500 employees, states a March 2023 report from the Office of Advocacy with the U.S. Small Business Administration. A federal agency, the SBA was established in 1953 to assist small firms with loans, resources, and opportunities.
There are more than 33 million small businesses in the U.S., versus 20,868 large businesses. More than 80 percent of these small businesses (about 27.1 million firms) are one-person operations with no staff (“non-employer firms” as the SBA calls them). “Employer firms,” by contrast, do have paid staff, though usually not many of them. Roughly 5.4 million small businesses have “between one to 19 employees,” while “only 647,921 businesses have a workforce size ranging from 20 to 499 employees,” states Forbes.com.
Small businesses generate roughly 43.5 percent of the Gross Domestic Product in America. And, minuscule as their workforces might be, small businesses are also efficient job creators. Women own only about 20 percent of all employer firms, but when it comes to very small, one-person firms, things look considerably different. Women own about 42 percent, or 10.9 million, of non-employer firms.
In a piece posted online, the U.S. Chamber of Commerce identified five major challenges currently facing small businesses: inflation, access to credit, rising interest rates, supply chain disruptions, and hiring and retention. This article was written before the onset of the new tariffs and other business changes taking place in 2025. This also does not take into consideration anything affecting businesses during or due to the COVID pandemic.
When faced with cost increases, small business owners must raise prices, which hurts consumers, and/or cut expenses, which hurts the paid staff of the small business, and the business itself, notes the U.S. Chamber of Commerce. Small businesses usually have very thin profit margins and small reserves of capital.
In a similar fashion, small businesses generally have a more difficult time getting access to credit than corporate industries. In general, big banks are more receptive to pleas for cash or credit when they come from the CEO of a large corporation over, say, the owner of an independently run burger shop.
Hiring and then retaining employees remains tricky. Low overall unemployment in the United States means there’s a smaller pool of potential staff. Despite the rate slowly increasing, it is still lower than the long-term average. The most difficult part of retaining employees is being able to offer people the benefits they want.
The failure rate for small businesses is high. From 1994 to 2020, an average of 67.7 percent of new employer establishments survived at least two years. In 2020, approximately 1.07 million small businesses were launched, and 1.02 million were permanently closed, mostly due to the COVID pandemic.
Given all this, why would anyone want to own and operate a small business?
Well, as it turns out, small business ownership has its upsides too. Benefits include independence, power and control, flexibility, financial gains, and passion and creativity. The independence factor is obvious. When you own the business, you are the boss. You do not have to rely on others or discuss decisions with them.
Power and control mean the ability to set rules, hire or fire people, and establish the workplace culture. Flexibility refers to deciding your own hours. While stores and restaurants have to keep consistent, customer-oriented hours, other types of small businesses, such as tech startups, don’t face such constraints and can work through the night and close during daylight hours if they choose. This flexibility was my business lifeline during and since my diagnosis with a chronic pain disease.
Financial gain might not always be obvious, but it’s worth noting that some massive corporations originated as tiny enterprises operating out of the owner’s garage or a back room in their house. Depending on the type of small business you pursue, financial gain could be a top priority.
Finally, passion and creativity enable a small business owner to pursue their dreams. And everyone can benefit from that.
About Maria Novak Dugan
Maria L. Novak Dugan is president of Marketing Solutions & Business Development, a firm serving Pennsylvania, Delaware, and Maryland, offering creative marketing services and goal implementation for small businesses. She has more than 30 years’ experience in the Marketing & Sales Industry ... 13 of those as the sole sales representative for a Pennsylvania payroll company growing their client base by over 500%. Maria Novak Dugan is also the former Managing Director of the Delaware Chapter of eWomenNetwork. Creating, developing, and conducting this division of a national organization strengthened her knowledge of networking, event planning, fundraising, and small-business development. For more information, contact Maria at 610-405-0633 or [email protected] or visit www.Maria-L-Novak.com
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