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Social‐distancing restrictions and health‐ and economic‐driven demand shifts from COVID‐19 are expected to shutter many small businesses and entrepreneurial ventures, but there is very little early evidence on impacts. This paper provides the first analysis of impacts of the pandemic on the number of active small businesses in the United States using nationally representative data from the April 2020 Current Population Survey—the first month fully capturing early effects. The number of active business owners in the United States plummeted by 3.3 million or 22% over the crucial 2‐month window from February to April 2020. The drop in active business owners was the largest on record, and losses to business activity were felt across nearly all industries. African‐American businesses were hit especially hard experiencing a 41% drop in business activity. Latinx business owner activity fell by 32%, and Asian …