M&A Insights: U.S. Small Business Landscape (2024)
Number of Small Businesses in the U.S.
Total Small Businesses: Approximately 33–34 million
According to the U.S. Small Business Administration (SBA), there were about 33.2 million small businesses in 2022. Trends suggest moderate annual growth, placing the 2024 figure in the 33 to 34 million range.Definition: The SBA generally defines a “small business” based on industry-specific size standards (often under 500 employees).
How Many are for Sale?
Businesses Listed for Sale: Roughly 1–1.3 million at any given time Studies from marketplaces like BizBuySell show tens of thousands of active listings quarterly, but nationwide estimates (including those not formally listed online) can push this figure higher.
Annual Turnover: Each year, a portion of these businesses successfully closes transactions, while others remain on the market or delist.Owner Demographics
The demographic makeup of small business owners provides valuable insight into trends, potential succession issues, and upcoming opportunities for M&A.
Age of Small Business Owners
Baby Boomers (58–76 years old):
- Still represent a significant share of ownership—various surveys suggest 40–50% of small business owners.
- Many Boomer owners are looking to retire or transition out, fueling an active market for business sales.
Gen X (43–57 years old):
- An estimated 30–35% of small business owners.
- Often seeking growth capital or partial exits, presenting M&A opportunities for strategic buyers.
Millennials (27–42 years old):
- Around 15–20% of owners.
- Typically run newer ventures; some may look for acquisitions to scale faster or seek buyouts as they pivot to new ventures.
Gen Z (up to 26 years old):
- A small but growing slice (likely <5%).
- More common in tech startups, e-commerce, and digital-based businesses; fewer are at the stage of selling but may attract acquisition interest.
Race & Ethnicity
Per U.S. Census Bureau data and SBA surveys, the share of minority-owned businesses has been steadily increasing:
White-Owned Small Businesses: Approximately 70–75%.
Hispanic/Latino-Owned: Around 10–15%.
Black/African American-Owned: Roughly 7–10%.
Asian-Owned: Around 6–10%.
Native American / Alaska Native / Other: Collectively <5%.
Regional Distribution
Small businesses span all regions, but certain areas have higher concentrations or active M&A markets:
South & Southeast: Often leading in total count due to larger populations and business-friendly policies (e.g., Florida, Texas).
Northeast & Mid-Atlantic: High-value transactions in finance, professional services, and tech hubs.
Midwest: Strong in manufacturing, agriculture, and family-owned enterprises.
West Coast: Tech-forward, innovative startups; frequent acquisitions in software, biotech, and green energy sectors.
Trends Influencing M&A Activity
Baby Boomer Exits - Interest rates, consumer demand, and overall economic confidence affect buyers’ and sellers’ willingness to transact.
High inflation or rising interest rates can shape valuation negotiations and financing availability.
Private Equity & Search Funds - Private equity groups increasingly target smaller deals, while search fund entrepreneurs look for stable, profitable enterprises to operate long-term.
Diversity in Ownership - Programs and grants encourage minority and women entrepreneurs, which is gradually diversifying ownership demographics—and may unlock new investment and acquisition opportunities.
Key Takeaways for M&A Stakeholders
Large & Growing Pool: With up to 34 million small businesses, the M&A funnel remains robust.
Significant Portion for Sale: An estimated 1–1.3 million businesses could be on the market, reflecting strong acquisition opportunities.
Demographic Shifts: Aging Boomers fuel supply; younger generations bring new business models.
Regional & Industry Variances: Hotspots differ by state, industry vertical, and demographic trends.
Opportunity for Value Creation: Buyers, sellers, and intermediaries can capitalize on generational transitions, digital innovation, and an increasingly diverse ownership base.
Final Thoughts
For anyone exploring M&A opportunities—whether buying a small business or selling one—understanding the size of the market, the number of businesses listed for sale, and who owns these businesses is crucial. These factors shape valuations, inform negotiations, and highlight untapped growth prospects. As economic and demographic trends evolve, so too will the small-business M&A landscape—continuing to offer unique opportunities for strategic transactions.
Disclaimer: All figures are approximate and based on a combination of sources (SBA, U.S. Census, BizBuySell, and private data analyses). The exact 2024 data may vary as new government surveys and private sector reports are published. For the most accurate, up-to-date information, consult official releases and local market research.