Starting a business in Oklahoma has a higher chance of success than in most other states. According to Kauffman Indicators of Entrepreneurship, 81.51% of Sooner State start-ups survive their first year, which is the third-highest rate in the country.
How do so many Oklahoma businesses make it through the difficult early stages of their existence? Perhaps the state’s low housing prices and low cost of living, which are ranked 2nd in the country by US News, have something to do with it. Because cash flow is the most important concern for a young company, not having to pay high rent payments and other expenses can mean a lot for a company’s chances of survival.
Here are a few statistics that prove that Oklahoma is the best location for your start-up.
Quick Oklahoma Small Business Statistics for Entrepreneurs
- Small businesses in Oklahoma account for 99.4% of all private enterprises in the state.
- 51.7% of all Oklahoma employees are employed by small businesses.
- In 2019, small businesses in Oklahoma exported goods worth $1.8 billion.
- Veterans account for 6.5% of workers and 8.8% of small business owners.
- Women own 42.6% of small businesses and account for 46.7% of employees.
- Racial minorities account for 11.7% of small business ownership.
- Between March 2019 and March 2020, 9,867 new businesses started in Oklahoma, while 9,889 closed, for a net gain of 22.
- Within the same period, opening and expanding Oklahoma businesses added 141,366 jobs, while closing and contracting businesses lost 155,133, for a net increase of 13,767 jobs.
- The per capita disposable income (DPI) in Oklahoma is $46,233.
- The professional, scientific, and technical services industry is the second-largest industry in Oklahoma in terms of small business investment, comprising a total of 41,626.
Oklahoma Small Business Statistics
1. What is considered a small business in Oklahoma?
According to the US Small Business Administration definition, the definition varies by industry, but takes into account the number of employees and annual receipts. A small business may be incorporated as a partnership, single proprietorship, or privately held corporation. It generates less profit than larger firms or enterprises and has fewer than 500 employees.
There are currently 362,364 small businesses in Oklahoma that represent 99.4% of all private enterprises in the state. The state government of Ohio provides a couple of incentives to small businesses owners and entrepreneurs, including the Amber Grant for Women, American Indian Lands Tax Credit (because of the state’s unique Native American heritage, two-thirds of Oklahoma locations qualify for special federal tax treatment), and manufacturing sales tax exemptions.
Registering a business in Oklahoma can be challenging, especially for people who’ve never run a business before. It’s advisable to hire an LLC (limited liability company) formation service that will process and submit your registration documents to the Oklahoma Secretary of State on your behalf. To learn more, read my review of the best LLC services in Oklahoma.
2. How many people are employed by small businesses in Oklahoma?
There are approximately 715,603 Okies employed by small businesses, that’s 51.7% of all employees in the state. Oklahoma’s minimum wage is $7.25 per hour, which is the same federal minimum wage. The state hasn’t seen an increase in its minimum wage since 2008, when the rate went from $6.55 to $7.25, an increase of $0.70.
There are exceptions to who gets to be paid the minimum wage. For instance, tipped employees are entitled to a minimum wage of $3.63 per hour. Employers are permitted to take a tip credit of up to 50%. This means that employers can pay employees as little as $3.63 per hour if they receive enough tips to bring their total hourly wage up to the state’s minimum. Also, for the first 90 days, employees under the age of 20 can be paid $4.25 per hour.
3. Oklahoma small business statistics by industry
The construction industry is by far the largest industry in Oklahoma in terms of small business investment, with a total of 45,183 small businesses currently operating in this industry. Approximately 37,074 of them have no employees, 7,383 have 1–19 employees, and another 726 employ 20–499 workers.
4. Oklahoma small business ownership by ethnicity
The state of Oklahoma has a population of 3,986,639 and an annual population growth of 0.4% over the five years leading up to 2019, which ranks Oklahoma 23rd out of all 50 US states.
White/Caucasian Americans are the majority, representing 74% of the population. They are followed by Hispanic/Latino Americans (11.1%), American Indians and Alaska Natives (9.4%), Black/African Americans (2.4%), Asian Americans (2.4%), and Native Hawaiians and Other Pacific Islanders (0.2%).
The details below show how small business ownership is distributed among these ethnic groups:
- White/Caucasian — 306,192
- Hispanic/Latino — 19,919
- Black or African American — 16,913
- Asian — 12,652
- American Indian and Alaska Native — 11,475
- Native Hawaiian and Other Pacific Islanders — 250
5. Oklahoma small business ownership by gender
Women own 127,759 small businesses in the state of Oklahoma. Approximately 114,000 of these firms have employees, and the remaining 13,759 are nonemployer businesses. Men own 198,768 small businesses, 159,000 of which are nonemployer businesses and 39,768 have employees on their payrolls.
6. How COVID-19 affected businesses in Oklahoma
Based on the percentage of employees in sectors with a high or medium-high level of exposure to COVID-19, Oklahoma has the 34th highest economic exposure to COVID-19 of all states in the US.
In Oklahoma, 47% of all employees, or 906,263 people, work in industries with a high or medium-high level of economic exposure to COVID-19. Also, 373,648 employees work in sectors with a low or medium-low level of economic exposure to COVID-19, accounting for 19% of all employees in Oklahoma.
7. Small business financing in Oklahoma
The Community Reinvestment Act (CRA) is a federal law passed in 1977 that encourages banks and other depository institutions to assist in meeting the credit needs of communities in which they operate, including low- and moderate-income neighborhoods, while maintaining safe and sound banking operations.
According to the Community Reinvestment Act (CRA), large banks are required to report new small business loans paid to companies with annual revenues of less than $1 million. In 2019, reporting banks gave $1.1 billion in loans to Oklahoma enterprises with less than $1 million in revenue. Total reported new lending to firms with loans of $100,000 or less was $905.3 million, while total reported new lending to businesses of $1 million or less was $2.5 billion.
8. Small business taxes in Oklahoma
The majority of Oklahoma LLCs are pass-through tax entities. In other words, the responsibility for paying federal income taxes is passed through the LLC to the individual LLC members. LLCs do not pay income taxes by default—only their members do.
In some cases, the owners of an LLC may choose to have their business taxed as a corporation. In this situation, the company must file a corporate tax return. The top corporate tax rate in Oklahoma is 4%.
It’s important for you to always be in compliance with Oklahoma’s tax code. Failure to adhere may attract penalties such as suspension of your business license. You should seek the services of a registered agent service that will alert you of impending tax filing dates and also assist with the filing process. Read my review of the best registered agents in Oklahoma to find out more.
9. Oklahoma small business export statistics
In 2019, a total of 3,162 identified firms exported goods totaling $5.6 billion from Oklahoma. Small businesses accounted for 2,629 (or 83.1%) of those exporters moving goods worth $1.8 billion. That represents 31.7% of all identified firm exports.
The Final Word
Recent years have seen an increase in the number of start-ups sprouting up all over Oklahoma. A variety of factors contribute to the highly competitive environment, including business-friendly regulations and taxes, low cost of skilled labor, and a supportive legal climate. The Sooner State’s policies and strategies are aimed at encouraging business growth, expansion, and overall development.
- Kauffman Indicators of Entrepreneurship
- US News
- CNBC-Top States for Business
- Tax Foundation
- Census Bureau
- US Small Business Administration