A new report from New York State Comptroller Thomas P. DiNapoli highlights the outsized role small businesses play in the state’s economy—while also pointing to ongoing challenges that are slowing growth compared to the rest of the nation.
According to the report, small businesses generated nearly $1 trillion in sales and revenue in 2023 and employed more than 3.7 million people across over 422,000 establishments. That accounts for nearly 99% of all businesses in New York.
“Small businesses are the foundation of New York’s economy,” DiNapoli said, noting their role in job creation, innovation, and strengthening communities. However, he added that job growth and new business formation are trailing national trends, and rising costs and regulatory pressures continue to weigh on owners.
Key Findings
The report, based on U.S. Census Bureau data, outlines several major takeaways:
- Small businesses make up 98.9% of all businesses in New York
- More than 80% employ fewer than 10 workers
- Small businesses employ about 45% of the state’s workforce
- Average annual pay at small businesses was $60,579 in 2023
- Health care and leisure industries account for over one-third of small business jobs
The report also found greater diversity among small business owners compared to larger firms, with 23% majority women-owned and 26% minority-owned—far higher than large business ownership rates.
Growth Lags National Trends
Despite their importance, small businesses in New York are not growing as quickly as those in other states.
Between 2001 and 2023, the number of small businesses in New York grew by 9.5%, compared to 14.2% nationwide. That places New York 22nd among states.
The COVID-19 pandemic hit especially hard, with a net loss of more than 18,000 small businesses across 2020 and 2021. While the rest of the country saw growth during that period, New York’s concentration in heavily impacted industries like hospitality and retail contributed to steeper declines.
Growth has returned, but remains slower. From 2022 to 2023, small businesses in New York increased by just 0.7%, compared to 1.05% nationwide.
Ongoing Challenges
The report points to several key challenges facing small business owners in New York.
A 2025 survey by the National Federation of Independent Business found the biggest concerns include:
- High health insurance and supply costs
- State taxes on business income
- Government regulations
- Rising electricity costs
Regulatory hurdles can also delay business openings. In New York City, for example, some businesses report waiting six months or longer to secure required permits and approvals.
At the same time, the state has seen growth in “non-employer” businesses—often tied to the gig economy—where individuals operate without hiring employees.
State Support Efforts
State officials have launched several initiatives aimed at helping small businesses grow.
In 2022, New York introduced more than $1 billion in grant and loan programs to improve access to capital. The state has also expanded support for alternative lenders that work with startups and small firms.
More recently, the state announced the EXPRESS NY initiative, which aims to identify and reduce outdated or burdensome regulations. The program includes a public portal where business owners can submit feedback on barriers to starting or expanding a business.
DiNapoli says continued efforts to ease regulations and support entrepreneurs will be key to helping small businesses thrive—and keeping them competitive with the rest of the country.
