Number of Small Businesses by State
There are currently 33.3 million small businesses in the United States, making up nearly all US businesses. As an aspiring entrepreneur, understanding the landscape of small businesses allows you to better plan for your company. So aside from knowing what the best states to start a business are, you need to also know where there’s most (and least) competition.
Here’s a ranking of the number of small businesses by state.
Number of small businesses by state: top 10
According to the US Small Business Administration’s latest annual report, the state with the largest number of small businesses is California. As of 2023, there were 4.1 million small businesses there, representing 99.8% of the state’s total number of businesses and hiring 7.5 million employees. The number of small businesses in California has been increasing year after year in recent years. In 2016, there were 3.7 million small businesses there.
Texas and Florida are next on the ranking of the number of small businesses by state. There are 3.2 million and 3.1 million small businesses there, respectively. New York ranks in fourth place, with 2.2 million. Incidentally, California, Texas, Florida, and New York are also the four most populous US states.
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Illinois follows, home to 1.3 million small businesses. Close behind, with 1.2 million, Georgia is the state with the sixth-highest number of small businesses. This is followed by Pennsylvania, with 1.1 million, and North Carolina, with 1 million. Ohio and New Jersey wrap up the top 10, with 989,435 and 952,029 registered small businesses, respectively.
States with the smallest number of small businesses
On the other end of this list ranking the number of small businesses by state is Wyoming, the state with the fewest small businesses. There are just over 72,000 small businesses registered there, a fraction of the number in California.
This is followed by Alaska, with 74,587 small businesses. Despite it being the largest US state in terms of land mass, Alaska is one of the least-populous states.
North Dakota and Vermont are next, with 75,265 and 78,883 registered small businesses, respectively.
The remaining states on the list are as follows:
- South Dakota: 90,274
- Delaware: 93,686
- Rhode Island: 108,360
- West Virginia: 111,614
- Montana: 129,180
- New Hampshire: 138,199