How Many Small Businesses Are in California?
It should come as no surprise that California, home to Silicon Valley—the global hub where some of the largest revenue-generating firms are located—is the state with the highest number of small businesses.
The Golden State is also listed among the best states to start a business in 2023. If you’re an aspiring business owner thinking about starting a business there, it would help to get a feel for California’s entrepreneurial landscape.
This raises the question: How many small businesses are in California?
How many small businesses are in California?
According to recent data, as of 2023, there are 4.15 million small businesses (defined as businesses with fewer than 500 employees) in California, 2.1% less than the previous year. They represent 99.8% of all businesses in California and hire 7.5 million employees.
The year-on-year decrease is the first in at least seven years and follows one of the slowest annual growth rates in recent years. In 2022, the number of small businesses in California grew by a marginal 0.2%—a fraction of the previous years’ growth rates.
Despite this dip, the number of small businesses in California has largely grown since 2016. That year, there were 3.69 million small businesses in California, and this rose by 4%, to 3.84 million in 2017—the largest annual increase from 2016 to 2022. In 2018, the number of small businesses in California grew by 2.7%, to 3.94 million. The following year, it grew by 2.1%, to 4.02 million, exceeding the four million mark for the very first time. The number of small businesses in California continued to grow in 2020 and 2021, by 2.7% and 2.3%, to a total of 4.13 million and 4.23 million, respectively.
How many small businesses are in California: size breakdown
Of the 4.15 million small businesses in California, 3.35 million are non-employers, meaning they are one-person run-and-operated establishments.
717,000 of them have between one and 19 employees, and 82,000 of them have between 20 and 499 employees.
How many small businesses are in California: industry breakdown
Here are the top five industries small businesses in California belong to:
- Professional, scientific, and technical services: 679,393
- Transportation and warehousing: 478,936
- Real estate and rental and leasing: 389,674
- Health care and social assistance: 362,684
- Administrative, support, and waste management: 329,878