Which states have a thriving small-business landscape, according to data?

U.S. NAICS Codes analyzed data from the Bureau of Labor Statistics to see which states have the healthiest environments for small businesses.

Wade Zhou
Posted 9/3/24

U.S. NAICS Codes analyzed data from the Bureau of Labor Statistics to see which states have the healthiest environments for small businesses.

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Which states have a thriving small-business landscape, according to data?

U.S. NAICS Codes analyzed data from the Bureau of Labor Statistics to see which states have the healthiest environments for small businesses.

Posted

A small downtown main street.

Sean Pavone // Shutterstock

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.

#50. Washington

Seattle skyline.

Canva

- 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

#49. New Mexico

A small market in Santa Fe.

Canva

- 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

#48. Nebraska

An aerial view of downtown Omaha.

Canva

- 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

#47. Iowa

The Des Moines skyline.

Canva

- 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

#46. Indiana

An aerial view of Nappanee, IN.

Canva

- 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

#45. Maryland

An aerial view of Annapolis.

Canva

- 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

#44. New York

A busy New York street.

Canva

- 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

#43. Pennsylvania

Downtown Scranton.

Canva

- 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

#42. Illinois

The downtown Chicago skyline at sunset.

Canva

- 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

#41. Wyoming

An aerial view of Casper, WY.

Canva

- 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

#40. Massachusetts

Downtown Northampton, MA.

Canva

- 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

#39. Nevada

Neon signs on a small street in Henderson, NV at night.

Canva

- 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

#38. Louisiana

A streetcar in downtown New Orleans.

Canva

- 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

#37. Florida

Businesses on a small street lined with palm trees.

Canva

- 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

#36. Wisconsin

The Capitol in Madison.

Canva

- 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

#35. Texas

Downtown Austin.

Canva

- 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

#34. New Jersey

Atlantic City.

Canva

- 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

#33. North Dakota

Downtown Fargo.

Canva

- 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

#32. South Dakota

Downtown Deadwood.

Canva

- 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

#31. Utah

Downtown Ogden, UT at night.

Canva

- 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

#30. Arkansas

Fayetteville, AR in Fall.

Canva

- 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

#29. Maine

A small street in Belfast, ME.

Canva

- 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

#28. Kansas

Downtown Topeka.

Canva

- 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

#27. Ohio

An aerial view of Columbus.

Canva

- 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

#26. Alaska

Businesses on the water.

Canva

- 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

#25. New Hampshire

Portsmouth, NH.

Canva

- 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

#24. Alabama

An aerial view of Montgomery.

Canva

- 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

#23. Georgia

An aerial view of Atlanta.

Canva

- 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

#22. South Carolina

An aerial view of Charleston.

Canva

- 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

#21. California

A small street in Palm Springs.

Canva

- 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

#20. Missouri

An aerial view of Springfield, MO.

Canva

- 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

#19. Rhode Island

Small stores in Rhode Island.

Canva

- 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

#18. Oklahoma

Broken Arrow, OK.

Canva

- 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

#17. West Virginia

Harpers Ferry, WV.

Canva

- 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

#16. Delaware

Wilmington, DE skyline.

Canva

- 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

#15. Connecticut

A small street in Greenwich.

Canva

- 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

#14. Minnesota

Duluth, MN.

Canva

- 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

#13. Mississippi

Jackson, MS.

Canva

- 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

#12. Kentucky

Lexington, KY.

Canva

- 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

#11. North Carolina

Wilmington, NC.

Canva

- 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

#10. Vermont

Rutland, VT.

Canva

- 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

#9. Arizona

Downtown Tucson, AZ.

Canva

- 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

#8. Idaho

Downtown Boise, ID.

Canva

- 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

#7. Tennessee

Memphis, TN.

Canva

- 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

#6. Hawai'i

Lahaina Harbor in Hawai‘i.

Canva

- 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

#5. Michigan

Downtown Ann Arbor, MI.

Canva

- 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

#4. Colorado

Telluride, CO.

Canva

- 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

#3. Oregon

An aerial view of downtown Portland, OR.

Canva

- 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

#2. Virginia

Fredericksburg, VA.

Canva

- 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

#1. Montana

Downtown Anaconda, MT.

Canva

- 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.