Most Common Industry For Small Business
Starting a business requires doing plenty of research beforehand—whether it’s to ensure the niche you’re entering is a viable one, to better gauge consumer demand, or for other factors that can affect the rise and fall of an enterprise.
One key piece of information aspiring entrepreneurs should arm themselves with is what the most common industry for small businesses is—that is, how much competition each sector has.
Here’s a breakdown of the number of small businesses by industry.
Small businesses by industry: 2023
According to a recent report, there are 4.53 million small businesses providing professional, scientific, and technical services, making it the most common industry for small businesses. This means that 13.6% of the 33.3 million small businesses in the United States are in this sector—around one in seven. More than 670,000 of them are located in California alone, the state with the largest number of small businesses in this sector. Incidentally, the Golden State is also home to the highest number of small businesses overall, with 4.2 million.
Second on the list ranking small businesses by industry is construction, with 3.62 million. With 3.39 million small businesses, the transportation and warehousing sector follows close behind in third place. The fourth-most common industry for small businesses is real estate and rental and leasing, with 3.33 million. These four industries mentioned so far are the only ones that have more than three million small businesses.
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Rounding out the top five on this list of small businesses by industry is administrative, support, and waste management. There are 2.91 million small businesses in this sector.
The sixth-most common industry for small businesses is retail trade, with 2.89 million. The large number of retail small businesses should come as no surprise, given that US retail sales have been growing year after year. Before launching straight into starting a retail business, knowing what the top retail industry’s challenges are can help to set expectations. Studying the fastest-growing retailers in the US also allows you to learn from the best.
Here are numbers seven to 10 on this list ranking small businesses by industry:
- Health care and social assistance: 2.67 million
- Arts, entertainment, and recreation: 1.48 million
- Accommodation and food services: 1.03 million
- Finance and insurance: 997,471