Business Owner Demographics: Gender, Race and More

Nearly all U.S. businesses are small businesses. In fact, more than 6 in 10 firms with employees are very small businesses with fewer than five employees.

Business ownership data reflects broader racial and gender inequalities for both large and small businesses. White Americans own 82.0% of U.S. companies with employees, while men own 61.0%.

LendingTree researchers analyzed the U.S. Census Bureau 2022 Annual Business Survey to look at business owner demographics by gender, race and more. Here’s what we learned.

Key findings

• Men own more than 6 in 10 U.S. businesses. Men own more than half of the stock or equity in 61.0% of U.S. businesses with employees, while women own just 21.6%. Another 13.7% are equally male- and female-owned.
• White Americans own 82.0% of U.S. businesses with employees. Just 2.7% of these businesses are owned by Black Americans, even though they account for 13.7% of the U.S. population. White Americans account for 75.3% of the U.S. population.
• While startups may grab headlines, the majority of businesses powering the American economy are relatively old. 32.9% of U.S. businesses have been around for at least 16 years, and 62.3% have been in business for at least six.
• Veterans own 5.2% of American businesses. While that may sound low, it’s roughly in line with the population, as veterans make up 6.8% of the older-than-25 population. Nonveterans own 89.1% of businesses, while veterans and nonveterans equally own 2.1%.
• American firms, in general, are pretty small. 63.2% of firms with employees have fewer than five employees, with 13.9% having none at the time of the pay period analyzed (despite having employees previously during that year).

Men own 61.0% of businesses

Men own 3.6 million (or 61.0%) businesses with employees, while women own 1.3 million (or 21.6%). About 810,000 (or 13.7%) are equally male- and female-owned.

While this data is from 2021, there are signs of progress ahead. According to a survey published in September 2024 by online payroll company Gusto, 49% of new business owners were women in 2023 — a massive jump from 29% in 2019.

Ultimately, there’s a significant ownership difference. But, notably, a 2023 LendingTree study on franchises found that 4.7% of male-owned businesses are franchises, versus 3.8% among women.

82.0% of businesses with employees owned by white Americans

Much like the gender ownership gap, there’s a significant racial business ownership gap: 82.0% of U.S. businesses are owned by white Americans, even though they account for 75.3% of the population.

Black Americans own just 2.7% of businesses with employees, despite accounting for 13.7% of the population. Black-owned businesses, according to the Brookings Institution think tank, are more likely to be sole proprietorships, which generally means not having employees.

Most businesses have been operating for a while

Many businesses faced a significant stress test during the COVID-19 pandemic, but many companies that survived have been around for a while.

A third (32.9%) of businesses have operated for 16 or more years. That increases to 62.3% for firms open for six or more years. Only 14.7% of businesses have operated for less than two years.

• 16 or more years in business: 32.9%
• 11 to 15 years in business: 12.1%
• 6 to 10 years in business: 17.3%
• 4 to 5 years in business: 9.9%
• 2 to 3 years in business: 13.1%
• Less than 2 years in business: 14.7%

About 1 in 4 (23.2%) U.S. businesses fail in the first year, according to a 2024 LendingTree analysis. The failure rate after 10 years is 65.3%, so these long-operating firms must do something right.

Veterans own 5.2% of businesses

The rate of businesses owned by veterans (5.2%) is roughly proportional to the percentage of veterans in the general 25-and-older population (6.8%). Nearly 305,000 businesses are owned by veterans, while veterans and nonveterans equally own another 123,000 (2.1%). Nonveterans own nearly 5.3 million (or 89.1%) businesses.

The Small Business Administration (SBA) has the Veterans Business Outreach Center (VBOC) program, offering resources for veterans who want to grow this ownership percentage.

Most businesses are quite small

While large companies and their products are a big part of American life, most firms are small. Almost half of businesses with employees have one to four employees (49.3%), and 13.9% have none. (These companies had zero employees at the time of the pay period included in the survey, though they had paid employees previously that year.)

In total, 89.8% of businesses have fewer than 20 employees. Conversely, the number of businesses with 250 employees or more amounts to less than a percentage point of all businesses.

Likewise, a large majority of businesses (69.6%) have sales and receipts of less than $1 million a year. Here’s a full breakdown:

• Firms with sales/receipts of less than $5,000: 0.7%
• Firms with sales/receipts of $5,000 to $9,999: 0.7%
• Firms with sales/receipts of $10,000 to $24,999: 2.0%
• Firms with sales/receipts of $25,000 to $49,999: 3.8%
• Firms with sales/receipts of $50,000 to $99,999: 7.8%
• Firms with sales/receipts of $100,000 to $249,999: 18.6%
• Firms with sales/receipts of $250,000 to $499,999: 19.0%
• Firms with sales/receipts of $500,000 to $999,999: 17.0%
• Firms with sales/receipts of $1 million or more: 30.4%

Methodology

LendingTree researchers analyzed U.S. Census Bureau 2022 Annual Business Survey data, which covers reference year 2021.

The survey includes nonfarm employer businesses filing IRS Forms 941 (quarterly federal tax return), 944 (annual federal tax return) or 1120 (corporate income tax return). While this survey queried businesses with employees, there are firms categorized as having zero workers within the analysis. In this case, no establishment within that firm or business reported paid employees in the March 12 pay period included on the survey, though it had paid employees at some time during the year.

For demographic discussions, business ownership is defined as having more than 50% of the stock or equity in the firm. Businesses with equal ownership — whether gender, race or something else — were tabulated separately.