Small Businesses: A Snapshot of the Louisville Region

Small businesses, which are defined by the Small Business Administration (SBA) as independent firms with fewer than 500 employees, are the foundation of the Louisville region's employer base. In 2023, more than 20,000 small businesses operated across the region, accounting for 93% of all firms. The largest segment is micro-businesses: nearly 16,800 firms employ fewer than 20 people, the kind of businesses that define neighborhood commercial corridors and local service industries.

The count of small businesses in the region has proven resilient over time. The number of small businesses peaked just before the Great Recession, declined through 2013, and has since recovered some. The region has gained nearly 500 small businesses since 2020. The sectors with the highest concentrations of small businesses include Construction, Other services (such as personal care and repair services), and Professional, scientific, and technical services.

Small businesses collectively employ more than 256,000 workers in the Louisville region, representing 40% of regional employment. That share has declined from 20 years ago, when roughly half of all workers were employed at small businesses, reflecting growth in large-employer dominated sectors. For example, only 17% of workers in Transportation and warehousing work at small firms. By contrast, in Construction, Other services, and Real estate, more than 70% of sector employment is at small businesses.

That scale matters for workforce development. Small businesses are less likely to have dedicated HR capacity, yet they represent a significant share of the region's hiring, training, and retention activity. Small employers often struggle to reach a broad pool of job seekers and workers may have fewer formal channels for training or advancement than they would at a larger firm. Bridging that gap is where outside support can make the most difference.

Connecting small employers to workforce programs, and connecting job seekers to the opportunities small businesses offer, is central to KentuckianaWorks’ mission of building a stronger community that works for employers and workers alike. 

Our Business Services team works with employers of all sizes to help them recruit and retain workers and build their talent pipeline for the future. Learn more: kentuckianaworks.org/employers.