It has long been said that small businesses drive the U.S. economy. In fact, businesses with fewer than 500 employees provide jobs for over half of the workers in the country’s private sector. And the U.S. is the land of opportunity, after all.

At Moneypenny, we are just as invested in small businesses. Our solutions for calls, live chat, and customer service functions support thousands of them annually. So we know that American entrepreneurs make up some of the best clients, as they are hard-working, creative, and smart.

We decided to conduct a study to take a comprehensive view of the state of entrepreneurship in the United States. We collected data from the U.S. Small Business Administration (2013 – 2018) and the U.S. Census’ Annual Survey of Entrepreneurs (collected 2014 – 2016) to determine the sector’s growth, where it’s creating jobs the most, where entrepreneurs are making the most money, and more. Read on to discover our findings.

Table of Contents

I. Where Small Businesses are Growing the Most

II. Where Opening a Small Business Pays the Most

III. The Best Places for Small Business Jobs

IV. Where Minority-owned Small Businesses are Growing the Most

V. Where Veteran-Owned Small Businesses are Growing the Most

VI. Where Women-owned Small Businesses are Growing the Most

Where Small Businesses are Growing the Most

First, we decided to dive into where small businesses are growing the most, based on the percent change in the number of small businesses in each state over the last five years.

According to our results, the top three states that have seen the most entrepreneurial growth are Florida (16.94%), Nevada (12.77%), and the District of Columbia (8.03%). In fact, Entrepreneur ranked Orlando, FL as the best city to start a small business earlier this year.

On the flip side, there are four states that have actually seen a decrease in the number of small businesses in the last few years. These states include West Virginia (-3.09%), New Mexico (0.21%), and Alabama (-0.12%).

Where Opening a Small Business Pays the Most

Of course, opening a new business requires extensive financial planning, which can be hard when you don’t know what salary you can expect to make. So, we took a look at the median incomes of self-employed individuals in unincorporated businesses as of 2018 and broke them down by state.

Being an entrepreneur pays the most in North Dakota, the District of Columbia, and South Dakota, where median incomes for small business owners are $36,377, $34,113, and $31,506 respectively. Conversely, small business owners in New Mexico ($18,772), Florida ($18,986), and Utah ($19,462) have the lowest incomes.

For comparison, the median income in the U.S. is $31,099 as of 2016.

The Best Places for Small Business Jobs

As we mentioned before, small businesses are the engine of job growth in the U.S. economy. But where are jobs being created the most?

Small businesses in California, Florida, and Texas have created the most jobs in 2018. That’s 135,472 jobs in California, 88,109 jobs in Florida, and 80,792 jobs in Texas, in one year alone. The fewest jobs (under 2,000) have been created in less populated states like Vermont, Wyoming and Alaska, but small businesses created at least 1,500 jobs in each state last year.

Where Minority-owned Small Businesses are Growing the Most

Next, we decided to dive into some specific demographics of small business owners. Minority-owned, women-owned and veteran-owned businesses can receive special certifications from the government that can help them receive funding, which is why business owners’ demographics are tracked. Plus, it’s always great to encourage diversity in the market.

First, we determined which states have seen the most growth in minority-owned businesses. The states with the most growth include Vermont (46.46%), Missouri (38.17%), and Iowa (23.21%). There was also over 20% growth in Minnesota, the District of Columbia, and Wyoming in this category.

Where Veteran-owned Small Businesses are Growing the Most

Veteran-owned businesses in the U.S. have not seen much growth over the last few years. However, as the veteran population is shrinking in the country, this is to be somewhat expected.

Six states saw increases in veteran-owned businesses from 2014 to 2016, and all were under 5 percent. This includes Wyoming (4.75%), Arizona (4.17%), Idaho (3.83%), West Virginia (1.81%), Utah (1.23%) and Maine (0.70%).

The rest of the country saw a decrease in veteran-owned businesses, ranging from -21.19% in the District of Columbia to -0.02% in Hawaii.

Where Women-owned Small Businesses are Growing the Most

Finally, we examined where women-owned businesses are growing the most state by state. By the looks of it, women have been opening the most businesses in Missouri (15.98%), South Dakota (13.88%), Alaska (12.54%), Delaware (12.43%) and South Carolina (10.29%) over the last few years. Overall, minority-owned businesses have seen the most growth of the three categories, followed by women-owned businesses, and then veteran-owned businesses.

If you’d like to look at our full data study, please explore the interactive data table below.

That wraps up our breakdown of the state of entrepreneurship in the U.S. today. Overall, it’s clear to us that the small businesses of Main Street that drive so much economic growth in the U.S. are here to stay. Diving into the data behind running small businesses in the United States only has us more enthusiastic that our team gets to support them in their customer service needs every day.

To find out more about Moneypenny and our phone answering services get in contact with us.

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