Which states have a thriving small-business landscape, according to data?
Sean Pavone // Shutterstock
Which states have a thriving small-business landscape, according to data?
A small downtown main street.
Small businesses are the backbone of the American economy. Defined by the Small Business Administration as firms with fewer than 500 employees, small businesses make up 99.9% of all companies. They also fuel employment, with nearly half (46%) of private sector workers employed at small businesses, accounting for 43.5% of the country’s overall economic output.
U.S. NAICS Codes analyzed data from the Bureau of Labor Statistics to see which states have the healthiest environments for small businesses.
In the United States, around 4 in 5 small businesses are solo ventures without employees, which can include real estate brokerages, construction contractors, freelance artists, and small online retailers. Small businesses with employees tend to be more dynamic than their larger counterparts, accounting for at least 3 in 5 (63%) new jobs in America between 1995 and 2021.
The demographics of who owns small businesses reveal disparities along gender and racial lines, according to SBA data. Women tend to be underrepresented, making up less than half (42%) of solo business owners and merely 22% of businesses that employ workers. Black Americans, comprising 14% of the population, own 12% of solo ventures but just 2.4% of those with employees.
An important distinction for BLS data is that it covers establishments rather than firms. This means the numbers correspond to individual physical locations and include big corporations with many small locations—think Starbucks or McDonald’s—each accounting for a single establishment. Even so, the numbers still indicate how small businesses are faring.
States were ranked by the percentage change in the number of small establishments between 2022 and 2023. Montana did the best in 2023 by this measure, with small establishments in the Treasure State growing by 12.1%. Small businesses also boomed in Virginia and Oregon. In contrast, Washington state saw a 15% decline in small establishments in 2023, indicating a less hospitable environment for small enterprises.
Read on to see how small businesses fared nationwide in 2023.
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#50. Washington
Seattle skyline.
– Small establishments, 2023: 231,670
— 15.2% decrease from 2022
— 98.3% of all establishments
– Total small establishment workers:
— 1,643,020 (55.5% of total private sector)
– Average weekly small establishment wages in 2023: $1,300
— $470 a week below state private sector average
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#49. New Mexico
A small market in Santa Fe.
– Small establishments, 2023: 61,010
— 4.3% decrease from 2022
— 98.5% of all establishments
– Total small establishment workers:
— 426,590 (63.7% of total private sector)
– Average weekly small establishment wages in 2023: $0,960
— $120 a week below state private sector average
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#48. Nebraska
An aerial view of downtown Omaha.
– Small establishments, 2023: 70,880
— 4.1% decrease from 2022
— 98.5% of all establishments
– Total small establishment workers:
— 515,080 (62.1% of total private sector)
– Average weekly small establishment wages in 2023: $1,030
— $140 a week below state private sector average
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#47. Iowa
The Des Moines skyline.
– Small establishments, 2023: 102,170
— 0.5% increase from 2022
— 98.3% of all establishments
– Total small establishment workers:
— 788,220 (61.4% of total private sector)
– Average weekly small establishment wages in 2023: $1,020
— $170 a week below state private sector average
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#46. Indiana
An aerial view of Nappanee, IN.
– Small establishments, 2023: 178,890
— 0.9% increase from 2022
— 97.7% of all establishments
– Total small establishment workers:
— 1,508,550 (55.1% of total private sector)
– Average weekly small establishment wages in 2023: $1,040
— $170 a week below state private sector average
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#45. Maryland
An aerial view of Annapolis.
– Small establishments, 2023: 179,250
— 1.2% increase from 2022
— 98.2% of all establishments
– Total small establishment workers:
— 1,270,900 (59.0% of total private sector)
– Average weekly small establishment wages in 2023: $1,320
— $160 a week below state private sector average
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#44. New York
A busy New York street.
– Small establishments, 2023: 667,110
— 1.3% increase from 2022
— 98.4% of all establishments
– Total small establishment workers:
— 4,151,540 (52.1% of total private sector)
– Average weekly small establishment wages in 2023: $1,510
— $570 a week below state private sector average
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#43. Pennsylvania
Downtown Scranton.
– Small establishments, 2023: 365,180
— 1.7% increase from 2022
— 97.9% of all establishments
– Total small establishment workers:
— 3,012,770 (57.5% of total private sector)
– Average weekly small establishment wages in 2023: $1,230
— $190 a week below state private sector average
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#42. Illinois
The downtown Chicago skyline at sunset.
– Small establishments, 2023: 378,550
— 2.3% increase from 2022
— 97.9% of all establishments
– Total small establishment workers:
— 2,550,780 (49.4% of total private sector)
– Average weekly small establishment wages in 2023: $1,330
— $270 a week below state private sector average
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#41. Wyoming
An aerial view of Casper, WY.
– Small establishments, 2023: 28,000
— 2.8% increase from 2022
— 99.3% of all establishments
– Total small establishment workers:
— 166,260 (80.7% of total private sector)
– Average weekly small establishment wages in 2023: $1,080
— $80 a week below state private sector average
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#40. Massachusetts
Downtown Northampton, MA.
– Small establishments, 2023: 282,200
— 3.3% increase from 2022
— 98.4% of all establishments
– Total small establishment workers:
— 1,705,560 (54.3% of total private sector)
– Average weekly small establishment wages in 2023: $1,590
— $390 a week below state private sector average
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#39. Nevada
Neon signs on a small street in Henderson, NV at night.
– Small establishments, 2023: 102,830
— 3.7% increase from 2022
— 98.2% of all establishments
– Total small establishment workers:
— 740,510 (55.6% of total private sector)
– Average weekly small establishment wages in 2023: $1,210
— $20 a week below state private sector average
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#38. Louisiana
A streetcar in downtown New Orleans.
– Small establishments, 2023: 143,700
— 3.8% increase from 2022
— 98.5% of all establishments
– Total small establishment workers:
— 1,023,080 (64.3% of total private sector)
– Average weekly small establishment wages in 2023: $1,020
— $150 a week below state private sector average
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#37. Florida
Businesses on a small street lined with palm trees.
– Small establishments, 2023: 852,840
— 4.0% increase from 2022
— 98.6% of all establishments
– Total small establishment workers:
— 5,051,490 (59.0% of total private sector)
– Average weekly small establishment wages in 2023: $1,260
— $80 a week below state private sector average
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#36. Wisconsin
The Capitol in Madison.
– Small establishments, 2023: 188,200
— 4.0% increase from 2022
— 98.0% of all establishments
– Total small establishment workers:
— 1,452,070 (58.1% of total private sector)
– Average weekly small establishment wages in 2023: $1,050
— $180 a week below state private sector average
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#35. Texas
Downtown Austin.
– Small establishments, 2023: 788,810
— 4.0% increase from 2022
— 97.8% of all establishments
– Total small establishment workers:
— 6,374,040 (54.8% of total private sector)
– Average weekly small establishment wages in 2023: $1,290
— $240 a week below state private sector average
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#34. New Jersey
Atlantic City.
– Small establishments, 2023: 303,870
— 4.1% increase from 2022
— 98.3% of all establishments
– Total small establishment workers:
— 2,087,160 (58.3% of total private sector)
– Average weekly small establishment wages in 2023: $1,410
— $310 a week below state private sector average
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#33. North Dakota
Downtown Fargo.
– Small establishments, 2023: 32,260
— 4.3% increase from 2022
— 98.7% of all establishments
– Total small establishment workers:
— 233,120 (68.8% of total private sector)
– Average weekly small establishment wages in 2023: $1,150
— $100 a week below state private sector average
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#32. South Dakota
Downtown Deadwood.
– Small establishments, 2023: 36,510
— 4.4% increase from 2022
— 98.8% of all establishments
– Total small establishment workers:
— 246,920 (67.6% of total private sector)
– Average weekly small establishment wages in 2023: $1,010
— $90 a week below state private sector average
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#31. Utah
Downtown Ogden, UT at night.
– Small establishments, 2023: 126,230
— 4.5% increase from 2022
— 98.4% of all establishments
– Total small establishment workers:
— 856,000 (60.4% of total private sector)
– Average weekly small establishment wages in 2023: $1,120
— $140 a week below state private sector average
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#30. Arkansas
Fayetteville, AR in Fall.
– Small establishments, 2023: 96,100
— 4.6% increase from 2022
— 98.5% of all establishments
– Total small establishment workers:
— 654,600 (60.9% of total private sector)
– Average weekly small establishment wages in 2023: $0,980
— $180 a week below state private sector average
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#29. Maine
A small street in Belfast, ME.
– Small establishments, 2023: 59,830
— 4.7% increase from 2022
— 98.9% of all establishments
– Total small establishment workers:
— 352,420 (67.9% of total private sector)
– Average weekly small establishment wages in 2023: $1,100
— $100 a week below state private sector average
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#28. Kansas
Downtown Topeka.
– Small establishments, 2023: 88,750
— 4.8% increase from 2022
— 98.1% of all establishments
– Total small establishment workers:
— 685,240 (59.0% of total private sector)
– Average weekly small establishment wages in 2023: $1,080
— $110 a week below state private sector average
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#27. Ohio
An aerial view of Columbus.
– Small establishments, 2023: 315,070
— 5.0% increase from 2022
— 97.8% of all establishments
– Total small establishment workers:
— 2,643,430 (56.4% of total private sector)
– Average weekly small establishment wages in 2023: $1,090
— $180 a week below state private sector average
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#26. Alaska
Businesses on the water.
– Small establishments, 2023: 22,420
— 5.0% increase from 2022
— 98.6% of all establishments
– Total small establishment workers:
— 149,880 (63.8% of total private sector)
– Average weekly small establishment wages in 2023: $1,080
— $240 a week below state private sector average
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#25. New Hampshire
Portsmouth, NH.
– Small establishments, 2023: 59,930
— 5.1% increase from 2022
— 98.7% of all establishments
– Total small establishment workers:
— 386,820 (65.8% of total private sector)
– Average weekly small establishment wages in 2023: $1,450
— $60 a week below state private sector average
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#24. Alabama
An aerial view of Montgomery.
– Small establishments, 2023: 145,220
— 5.4% increase from 2022
— 98.3% of all establishments
– Total small establishment workers:
— 1,040,560 (61.7% of total private sector)
– Average weekly small establishment wages in 2023: $1,050
— $100 a week below state private sector average
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#23. Georgia
An aerial view of Atlanta.
– Small establishments, 2023: 362,270
— 5.6% increase from 2022
— 98.2% of all establishments
– Total small establishment workers:
— 2,256,480 (54.8% of total private sector)
– Average weekly small establishment wages in 2023: $1,210
— $200 a week below state private sector average
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#22. South Carolina
An aerial view of Charleston.
– Small establishments, 2023: 166,680
— 5.9% increase from 2022
— 98.4% of all establishments
– Total small establishment workers:
— 1,128,300 (60.6% of total private sector)
– Average weekly small establishment wages in 2023: $1,070
— $70 a week below state private sector average
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#21. California
A small street in Palm Springs.
– Small establishments, 2023: 1,686,450
— 6.0% increase from 2022
— 98.8% of all establishments
– Total small establishment workers:
— 8,917,840 (58.5% of total private sector)
– Average weekly small establishment wages in 2023: $1,300
— $440 a week below state private sector average
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#20. Missouri
An aerial view of Springfield, MO.
– Small establishments, 2023: 227,770
— 6.2% increase from 2022
— 98.6% of all establishments
– Total small establishment workers:
— 1,458,010 (59.7% of total private sector)
– Average weekly small establishment wages in 2023: $1,070
— $190 a week below state private sector average
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#19. Rhode Island
Small stores in Rhode Island.
– Small establishments, 2023: 46,610
— 6.2% increase from 2022
— 98.9% of all establishments
– Total small establishment workers:
— 262,810 (63.1% of total private sector)
– Average weekly small establishment wages in 2023: $1,170
— $140 a week below state private sector average
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#18. Oklahoma
Broken Arrow, OK.
– Small establishments, 2023: 120,120
— 6.4% increase from 2022
— 98.5% of all establishments
– Total small establishment workers:
— 850,080 (63.9% of total private sector)
– Average weekly small establishment wages in 2023: $0,970
— $150 a week below state private sector average
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#17. West Virginia
Harpers Ferry, WV.
– Small establishments, 2023: 53,310
— 6.9% increase from 2022
— 98.7% of all establishments
– Total small establishment workers:
— 360,760 (66.3% of total private sector)
– Average weekly small establishment wages in 2023: $0,960
— $110 a week below state private sector average
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#16. Delaware
Wilmington, DE skyline.
– Small establishments, 2023: 41,540
— 6.9% increase from 2022
— 98.7% of all establishments
– Total small establishment workers:
— 217,470 (55.0% of total private sector)
– Average weekly small establishment wages in 2023: $1,190
— $280 a week below state private sector average
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#15. Connecticut
A small street in Greenwich.
– Small establishments, 2023: 140,030
— 7.1% increase from 2022
— 98.6% of all establishments
– Total small establishment workers:
— 858,450 (60.4% of total private sector)
– Average weekly small establishment wages in 2023: $1,670
— $220 a week below state private sector average
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#14. Minnesota
Duluth, MN.
– Small establishments, 2023: 197,620
— 7.3% increase from 2022
— 98.1% of all establishments
– Total small establishment workers:
— 1,328,920 (53.9% of total private sector)
– Average weekly small establishment wages in 2023: $1,220
— $270 a week below state private sector average
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#13. Mississippi
Jackson, MS.
– Small establishments, 2023: 79,780
— 7.7% increase from 2022
— 98.4% of all establishments
– Total small establishment workers:
— 577,820 (62.4% of total private sector)
– Average weekly small establishment wages in 2023: $0,870
— $60 a week below state private sector average
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#12. Kentucky
Lexington, KY.
– Small establishments, 2023: 140,900
— 7.9% increase from 2022
— 98.2% of all establishments
– Total small establishment workers:
— 936,050 (56.2% of total private sector)
– Average weekly small establishment wages in 2023: $1,030
— $130 a week below state private sector average
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#11. North Carolina
Wilmington, NC.
– Small establishments, 2023: 350,010
— 8.2% increase from 2022
— 98.4% of all establishments
– Total small establishment workers:
— 2,397,490 (58.8% of total private sector)
– Average weekly small establishment wages in 2023: $1,140
— $230 a week below state private sector average
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#10. Vermont
Rutland, VT.
– Small establishments, 2023: 29,450
— 8.5% increase from 2022
— 99.0% of all establishments
– Total small establishment workers:
— 170,000 (67.3% of total private sector)
– Average weekly small establishment wages in 2023: $1,140
— $60 a week below state private sector average
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#9. Arizona
Downtown Tucson, AZ.
– Small establishments, 2023: 208,240
— 8.5% increase from 2022
— 97.9% of all establishments
– Total small establishment workers:
— 1,347,950 (48.9% of total private sector)
– Average weekly small establishment wages in 2023: $1,220
— $120 a week below state private sector average
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#8. Idaho
Downtown Boise, ID.
– Small establishments, 2023: 87,120
— 8.7% increase from 2022
— 99.0% of all establishments
– Total small establishment workers:
— 479,600 (69.0% of total private sector)
– Average weekly small establishment wages in 2023: $1,020
— $80 a week below state private sector average
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#7. Tennessee
Memphis, TN.
– Small establishments, 2023: 204,360
— 8.8% increase from 2022
— 98.0% of all establishments
– Total small establishment workers:
— 1,548,890 (55.8% of total private sector)
– Average weekly small establishment wages in 2023: $1,160
— $120 a week below state private sector average
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#6. Hawai’i
Lahaina Harbor in Hawai‘i.
– Small establishments, 2023: 52,830
— 9.7% increase from 2022
— 98.8% of all establishments
– Total small establishment workers:
— 334,170 (65.1% of total private sector)
– Average weekly small establishment wages in 2023: $1,100
— $80 a week below state private sector average
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#5. Michigan
Downtown Ann Arbor, MI.
– Small establishments, 2023: 300,020
— 10.1% increase from 2022
— 98.1% of all establishments
– Total small establishment workers:
— 1,900,220 (50.8% of total private sector)
– Average weekly small establishment wages in 2023: $1,110
— $200 a week below state private sector average
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#4. Colorado
Telluride, CO.
– Small establishments, 2023: 255,660
— 10.5% increase from 2022
— 98.7% of all establishments
– Total small establishment workers:
— 1,529,230 (63.7% of total private sector)
– Average weekly small establishment wages in 2023: $1,430
— $170 a week below state private sector average
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#3. Oregon
An aerial view of downtown Portland, OR.
– Small establishments, 2023: 188,600
— 11.0% increase from 2022
— 98.9% of all establishments
– Total small establishment workers:
— 1,100,840 (65.3% of total private sector)
– Average weekly small establishment wages in 2023: $1,130
— $180 a week below state private sector average
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#2. Virginia
Fredericksburg, VA.
– Small establishments, 2023: 337,210
— 11.5% increase from 2022
— 98.6% of all establishments
– Total small establishment workers:
— 1,989,420 (60.5% of total private sector)
– Average weekly small establishment wages in 2023: $1,270
— $230 a week below state private sector average
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#1. Montana
Downtown Anaconda, MT.
– Small establishments, 2023: 61,460
— 12.1% increase from 2022
— 99.3% of all establishments
– Total small establishment workers:
— 317,570 (77.1% of total private sector)
– Average weekly small establishment wages in 2023: $1,000
— $80 a week below state private sector average
Story editing by Alizah Salario. Additional editing by Kelly Glass. Copy editing by Paris Close. Photo selection by Lacy Kerrick.
This story originally appeared on U.S. NAICS Codes and was produced and distributed in partnership with Stacker Studio.
