A new analysis of Small Business Administration data reveals significant shifts in America's small business landscape following the COVID-19 pandemic, with 24 states experiencing a decrease in small business workers between 2022 and 2025.
The comprehensive study by Founder Reports examined four years of data to create a ranking system that measures small business growth across all 50 states and Washington, D.C. The research evaluated three key metrics: the total number of small businesses, business openings and closures, and employment figures.
The findings paint a complex picture of post-pandemic recovery. While some states have seen robust growth in their small business sectors, nearly half are struggling to maintain employment levels from three years ago. This disparity highlights the uneven nature of economic recovery across different regions of the country.
The research methodology involved developing a proprietary formula that weighted multiple factors from Small Business Administration records. By analyzing patterns in business formations, closures, and workforce data, researchers were able to create a comprehensive ranking that shows which states have fostered the most favorable conditions for small business growth since the pandemic's peak.
Small businesses, which employ nearly half of America's private workforce, serve as critical economic indicators for regional health and recovery. The decline in small business employment in 24 states suggests ongoing challenges that extend beyond the immediate pandemic disruption, potentially reflecting shifts in consumer behavior, labor market dynamics, and regional economic policies.
The full state-by-state analysis provides detailed rankings and data breakdowns for entrepreneurs and policymakers seeking to understand their local business environment. The study offers insights into which states have successfully supported small business recovery and growth, as well as those facing continued headwinds.
These findings arrive at a crucial time as policymakers debate future support measures for small businesses and entrepreneurs evaluate expansion opportunities. Understanding the geographic variations in small business performance can help inform both policy decisions and business strategies as the economy continues to evolve in the post-pandemic era.
The complete rankings and methodology are available through Founder Reports' detailed analysis, providing entrepreneurs with data-driven insights for strategic planning and location decisions.
