It may seem that no matter where you go in the U.S. you see chain stores — those ubiquitous big box stores with Starbucks (SBUX) - Get Report inside of them. But fear not: Small business in America is not dead. In fact, it’s the majority of the country’s business, according to the Small Business and Entrepreneurship Council.
There were 5.6 million employer firms in the U.S. in 2016, and firms with fewer than 20 workers made up 89% of them, and there were another 24.8 million non-employer businesses, the SBE Council says.
Women-owned and minority-owned small businesses are on the rise. Location matters, too: Some states appear to be better than others for small businesses. Data crunchers at Office Depot (ODP) - Get Report took a look at the U.S. Small Business Administration’s 2019 Small Business Report to find out the 10 states where small business owners make the most money. They also found the 10 states with the highest percentage of women-owned businesses, and the states where small businesses employ the most workers.
Let’s start with the money.
10 States Where Small Business Owners Make the Most Money
The median income for self-employed people at their own incorporated businesses in the U.S. overall was $51,419 in 2017. These states all have a higher figure:
1. Rhode Island
- Median income for self-employed: $65,580
Rhode Island has the highest median income for self employed people at their own incorporated businesses. Small businesses here employed 229,974 people, or 52.8% of the private workforce, in 2016. The largest sector for small business employment here is in Health Care and Social Assistance. Pictured is downtown Newport.
- Median income for self-employed: $65,084
The median income for individuals self-employed at their own incorporated businesses in Massachusetts was $65,084 in 2017. For those self-employed at their own unincorporated firms, the median income was $31,042. Pictured is the Harvard Bookstore in Cambridge, Mass., a local landmark, and locally-owned and independently run since 1932.
- Median income for self-employed: $63,883
In Connecticut, small businesses created nearly 27,000 net jobs in 2016. Above, the 18th-century Griswold Inn in Essex, Conn., is said to be the oldest continuously run tavern in the country.
4. New Jersey
- Median income for self-employed: $61,313
In New Jersey, small businesses created 61,305 net jobs in 2016.
- Median income for self-employed: $60,641
Of the nearly 73,000 companies that exported goods from California in 2016, 95.5% were small firms that generated 43% of California’s $151.1 billion in total exports, according to the SBA report. California gained over 8,700 more small businesses than it lost in 2016, more than any other state. Pictured is Molinari Delicatessen in San Francisco’s North Beach, established in 1896, one of the oldest delis in the country.
- Median income for self-employed: $60,106
Small businesses make up 99.1% of the state’s businesses, and employ 53% of the private workforce in Alaska.
- Median income for self-employed: $56,474
- Median income for self-employed: $55,579
The strongest sectors for small business in Nevada are the industries of administrative support, waste management, and arts, entertainment, and recreation. Pictured is historic Virginia City, Nevada.
- Median income for self-employed: $55,477
Utah is one of 10 states with the highest net gain in small businesses, gaining 555 in 2016.
- Median income for self-employed: $54,732
10 States With the Highest Percentage of Women-Owned Small Businesses
The U.S. experienced 9% overall business growth between 2014 and 2019, while women-owned companies grew by 21% during the same period. Alaska had the highest percentage of female-owned companies at 23.1%. And these companies may also be seeing higher revenue, the SBA says.
According to an American Express report on women-owned businesses, a combination of necessity, flexibility and opportunity entrepreneurship — each of which represents a very different type of businesswoman — is driving an increase in the past two years. Here are the states with the most women-owned firms.
- Share of women-owned small businesses: 23.1%
Alaska leads the nation for women-owned businesses. The majority of Alaska's women-owned companies are less than five years old, and 71% had fewer than five employees in 2018. Pictured is a gift shop in Talkeetna, Alaska.
- Share of women-owned small businesses: 23%
Small firms in Missouri generated 23.5% of the state’s $13.1 billion in total exports in 2016. Women-owned companies make up more than 23% of businesses in the state.
- Share of women-owned small businesses: 22.5%
Women-owned firms in Colorado have an average of about 6 employees.
- Share of women-owned small businesses: 22.2%
Women-owned firms in Maryland have an average of about 8 employees.
- Share of women-owned small businesses: 22.2%
The accommodation and food industry is among the major industries for small business in Hawaii.
- Share of women-owned small businesses: 21.8%
Though it ranks the lowest for small business employment among all of the states, Florida is among those with the most women-owned firms. The accommodation and food services industry employed the most small business employees in Florida. Women-owned firms in Florida average just under 6 employees.
- Share of women-owned small businesses: 21.2%
- Share of women-owned small businesses: 21%
Virginia is the only state where professional, scientific, and technical services employed the most small business employees. Women-owned firms here employ an average of almost 9 employees.
- Women-owned small business: 20.9%
- Share of women-owned small businesses: 20.8%
Which states have the lowest percentage of women-owned small businesses? They are Idaho, at 13.4 %, Utah (14.7%) and Vermont (14.9%.)
10 States With the Highest Percentage of Workforce Employed by Small Businesses
According to the SBA’s Office of Advocacy, the bulk of job creation comes from small business—accounting for 61.8% of net new jobs from the first quarter of 1993 until the third quarter of 2016. Small businesses created 1.9 million net jobs in 2015.
These states have the most workers employed by small businesses:
- Share of workforce employed by small businesses: 64.8%
- Montana small businesses overall employed 64.8% of the state’s private workforce in 2016. Women-owned firms have an average of about 5 employees per firm here.
• Share of workforce employed by small businesses: 63.1%
Small firms in Wyoming generated 57.4% of the state’s $1 billion in total exports. Women-owned firms have an average of about 6 employees per firm here.
• Share of workforce employed by small businesses: 61.3%
Vermont had the highest percentage of small business employees in the educational services, information, and retail trade industries. Vermont is among those with the lowest percentages of women-owned businesses.
4. South Dakota
• Share of workforce employed by small businesses: 58.8%
Pictured is the interior of Wall Drug in Wall, S.D., a family-owned drug store that opened in 1931 and has become a big tourist attraction in the small town.
5. North Dakota
• Share of workforce employed by small businesses: 57.3%
• Share of workforce employed by small businesses: 56.5%
Above, lobster fishermen in Maine. The lobster industry employs thousands of Mainers and contributes more than $1 billion to the state’s economy each year, and lobstering is often a multigenerational family tradition, according to the Maine Lobster Marketing Collaborative.
• Share of workforce employed by small businesses: 56.2%
Idaho ranks seventh for most small business employees, but is among the states with the lowest percentage of women-owned businesses, at 13.4%. Above, Boundary Creek is a popular spot to launch rafting tours in the Middle Fork of the Salmon River.
• Share of workforce employed by small businesses: 55%
Of all the states, Oregon has the highest percentage of small business employees in the agriculture, forestry, and fishing and hunting industry. Pictured is Man Cave Brewing, a local brewery in Eugene, Oregon.
9. New Mexico
• Share of workforce employed by small businesses: 53.3%
Pictured is the Native American market in downtown Santa Fe.
• Share of workforce employed by small businesses: 53%
The state with the lowest percentage of small businesses is Florida, at 41.6%. Above, tour guides take visitors on the Norris Glacier, Alaska. Alaska is the only state that made all three of these lists.