Average Age of Small Business Owners
The number of small businesses in the United States hit 33.2 million in 2022, a 2.2% increase from the previous year. They constitute almost all US businesses and hire 61.7 million employees.
If you’re thinking about starting a business, a general landscape aside, it might also help to know the average age of small business owners to understand the competition better. Here’s a breakdown of small business owners by age.
The average age of small business owners in the US
Data from a recent study on small business trends shows that Generation X currently makes up 47.2% of all US small business owners. By the Pew Research Center’s definition, Generation X refers to people born between 1965 and 1980. This is to say that nearly one out of every two small business owners is aged 43 to 58 in 2023. This is a marginal 0.7 percentage point annual increase, as the same study conducted in 2022 had Generation X constituting 46.5% of all small business owners.
The study analyzing small business owners by age shows that the boomer generation forms the second-largest group. 39.6% of small business owners in 2023 were born between 1946 and 1964, making them 59 to 77 years old this year. This marks a 5.9 percentage point fall from the previous year. Analysts attribute this to many of them reaching retirement age and the COVID-19 pandemic, which led to a surge in boomers opting for early retirement.
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Together, Generation X and baby boomers make up as much as 86.8%—nearly nine out of every 10—of all small business owners in 2023. This means that, at present, the average age of small business owners is between 43 and 77.
Millennials account for 12.9% of small business owners. By definition, these are individuals born between 1981 and 1996, making them 27 to 42 years old this year. This represents an increase of 5.9 percentage points from 2022, and experts expect this to rise over the coming years as more millennials begin exploring entrepreneurship. In fact, analysts estimate the average age of new business owners to be 34.
The analysis of small business owners by age shows that the post-war generation (born in 1945 or earlier) is the smallest group, making up just 0.3% of small business owners.