Small Businesses in California (2023)

California, renowned for being the home of Silicon Valley and a thriving entrepreneurial ecosystem, boasts the highest number of small businesses among all the states in the US.

California has a substantial number of small businesses, employing millions of individuals and contributing significantly to the state’s economy.

Understanding the landscape of small businesses in California provides valuable insights into the entrepreneurial vitality and economic opportunities present in the Golden State.

Let’s explore the number of small businesses in California and delve into the size and industry breakdown to gain a comprehensive understanding of its entrepreneurial landscape.

How many small businesses are in California?

  • As of 2023, there are 4.25 million small businesses in California.
  • Small businesses represent 99.8% of all businesses in California.
  • They employ 7.4 million employees.
  • The annual growth rate in 2022 was 0.4%, the slowest in at least six years.
  • In 2016, there were 3.69 million small businesses in California.
  • The number of small businesses grew by 4% in 2017, the largest annual increase from 2016 to 2022.
  • The number continued to grow in subsequent years: 2.7% in 2018, 2.1% in 2019, 2.7% in 2020, and 2.3% in 2021.
  • Of the 4.24 million small businesses, 3.46 million are non-employers.
  • 702,000 small businesses have between one and 19 employees, and 82,000 have between 20 and 499 employees.

Industry Breakdown of Small Businesses in California

  1. Professional, scientific, and technical services: 705,099
  2. Transportation and warehousing: 452,974
  3. Real estate and rental and leasing: 388,876
  4. Health care and social assistance: 369,571
  5. Administrative, support, and waste management: 337,776

Ready to discover more?