Business Intelligence, Featured

What the Data Says About Small Business in Chattanooga

By [email protected]
Oct. 22, 2026

Small businesses remain a vital part of Chattanooga’s economy, but new research shows that their role continues to evolve.

Chart showing long-term small business trends in Chattanooga from 1978 to 2023. The data highlights growth in the number of small firms and employees over time while showing that small businesses recovered more slowly than larger firms following the 2008 recession. Research from the University of Tennessee at Chattanooga examines how small businesses continue to contribute to the Chattanooga economy. — _{New research from UTC’s Center for Regional Economic Research shows that while Chattanooga’s small businesses continue to grow, they have expanded at a slower pace than medium and large firms over the last four decades.}

A white paper from the Center for Regional Economic Research at the University of Tennessee at Chattanooga, led by economist Howard J. Wall, examines local small-business trends using the U.S. Census Bureau’s Business Dynamics Statistics. For this analysis, a small business is defined as a firm with fewer than 20 employees.

In 2023, Chattanooga was home to 6,814 small firms employing 35,601 people. While the number of small firms increased 27% between 1978 and 2023, medium and large firms grew considerably faster. The research also found that recovery from the 2008–09 recession was especially slow for small businesses. By 2023, the number of small firms still had not returned to its pre-recession level.

Three takeaways for business owners

Small businesses remain essential, but their share is shrinking.
Small firms represented 72.3% of Chattanooga firms and 14.6% of local private-sector employment in 2023. Both measures were below the corresponding national shares, and small firms have become less prominent locally since 2013.
Small-business strength varies significantly by industry.
Other services, retail trade, professional and technical services, construction, health care and social services, and accommodation and food services account for about 69% of Chattanooga’s small firms. Small businesses provide at least 20% of industry employment in other services, real estate, construction, professional and technical services, and wholesale trade.
Chattanooga’s small firms tend to employ more people.
The average Chattanooga small firm had 5.2 employees in 2023, compared with 4.6 nationally. Accommodation and food services had the largest small firms locally, followed by manufacturing, health care, information and education.

Chart comparing the share of employment provided by small businesses across Chattanooga industries. Small firms play the largest role in other services, real estate, construction, professional and technical services, and wholesale trade, highlighting the industries where small businesses have the greatest economic impact in Chattanooga. — _{Small businesses have the greatest employment impact in Chattanooga’s service, construction, real estate, professional services, and wholesale trade sectors.}

Help shape the next set of insights

Research like this helps business leaders and policymakers understand where small businesses are growing, where challenges remain and what support may be needed. Your experience can add an important real-world perspective.

Take the Federal Reserve Banks’ Small Business Credit Survey to help ensure the needs and experiences of Chattanooga-area businesses are represented in future research and decision-making. Take the Small Business Credit Survey

Owner Matt Jeffery Chattanooga Floor Care

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