Oregon, and particularly Portland, is quickly becoming a hot spot for ambitious entrepreneurs. The state’s rapidly growing population benefits small businesses in a variety of ways, including an increase in potential customers and a diverse and talented labor pool. In fact, the region’s workforce of over one million people is growing at a rate six times faster than the national average.
Here are a few small business statistics that shed light on the entrepreneurial ecosystem in Oregon.
Quick Oregon Small Business Statistics for Entrepreneurs
- Small businesses account for 99.4% of all Oregon businesses.
- Approximately 54.9% of Oregon employees work for small businesses.
- Racial minorities own 7.5% of businesses.
- Veterans represent 7.6% of small business ownership in Oregon.
- The per capita disposable income in Oregon is $50,843.
- Small firms exported goods worth $4.8 billion in 2019.
- Oregon’s gross domestic product (GDP) in 2021 was $270.12 billion, ranking it the 25th wealthiest state in the United States.
- According to Newsweek, Oregon has 11,573 small businesses per 100,000 residents, the 24th highest among all states.
- According to the annual CNBC “Top States for Business” report, Oregon ranks 35th out of 50 states.
- Oregon’s per capita consumption expenditure is $42,717.
Oregon Small Business Statistics
1. What is considered a small business in Oregon?
A small business is defined by the Small Business Administration based on firm revenue (varying from $1 million to more than $40 million) and workforce (from 100 to over 1,500 employees). The neighborhood bookstore, for example, is considered a small business if its annual sales are $16.5 million or less. A canning factory, on the other hand, is considered a small firm if it employs fewer than 1,000 people.
Based on this description, there are a total of 396,925 small businesses in Oregon that represent 99.4% of all private enterprises in the state.
Oregon accounted for 53,900 of the 5.8 million new business applications filed nationwide between January 2021 and January 2022. However, after adjusting for population, Oregon had 1,278 applications for every 100,000 people, which was lower than the national average and ranked 16th among states.
Starting a business in Oregon can be a difficult process. An entrepreneur must go through a lot of paperwork and legal procedures. Having a licensed LLC (limited liability company) formation service on your side can alleviate the burden.
Read my review of the best LLC services in Oregon to learn how an LLC formation service can help you.
2. How many people are employed by small businesses in Oregon?
There are 893,758 Oregonians that work for small businesses in the state. The minimum wage in Oregon is $12.75 per hour for companies in the standard area, $14 in the Portland metro area, and $12 in nonurban counties. On July 1, 2022, the minimum wage will rise across all counties to $13.50 in the standard area, $14.75 in the Portland metro area, and $12.50 in nonurban counties.
3. Oregon small business statistics by industry
The professional, scientific, and technical services sectors have the largest concentration of small businesses compared with other industries in the state, a total of 63,952. There are 52,233 small enterprises within this industry with no employees, 10,895 have 1–19 employees, and 824 have 20–499 employees.
There are 252 small businesses in the utilities sector, making it the smallest industry in the state.
4. Oregon small business ownership by ethnicity
Oregon has a population of 4,246,155 people, with an annual population growth rate of -0.1% (2014–2019), ranking 44th out of 50 US states. White/Caucasian Americans are the largest racial group, accounting for 86.7% of the population. Hispanic/Latino Americans make up the second largest group (13.4%), followed by Asians (4.9%), Black/African Americans (2.2%), American Indian and Alaska Natives (1.8%), and Native Hawaiian and Other Pacific Islanders (0.5%).
Here is a breakdown of how small business ownership is distributed among these groups:
- White/Caucasian — 347,993
- Hispanic/Latino — 22,098
- Asian — 18,982
- Black/African American — 6,468
- American Indian and Alaska Native — 1,502
- Native Hawaiian and Other Pacific Islander — 700
5. Oregon small business ownership by gender
Women own a total of 149,823 small businesses in Oregon. Around 131,000 of these are nonemployer businesses and 18,823 have employees. Men own 200,933 small firms, 150,000 of which are nonemployer businesses, and 50,933 have employees.
There are 26,181 more businesses that are owned by both men and women.
6. Business taxes in Oregon
The default LLC tax classification in Oregon is as a partnership for businesses owned by multiple persons and as a disregarded entity for businesses owned by individuals.
For LLCs classified as partnerships, the business owes the minimum excise tax of $150, while the business owners pay personal income tax on the income that passes through. For LLCs classified as disregarded entities, no business income tax applies; only personal tax is owed on the pass-through income.
In some rare cases, an LLC owner elects to classify their business as a corporation. In this case, the business is liable to Oregon’s corporate tax. The top corporate tax rate in Oregon is 7.6%.
Maintaining compliance with the state’s tax code is critical. Failure to do so may result in serious financial and legal consequences for you and your company. That doesn’t mean you have to go through the tedious and time-consuming process of filing taxes on your own—a registered agent will sort all your tax filing woes on your behalf.
A good Oregon registered agent will send you regular compliance alerts to ensure that you don’t miss any important filing deadlines. They will also help you with the filing process, giving you more time to focus on your business. To find out which registered agent in Oregon is best for you, read my review of the best registered agents in Oregon.
7. How COVID-19 affected small businesses in Oregon
Based on the percentage of employees in sectors with a high or medium-high level of exposure to COVID-19, Oregon has the 15th highest economic exposure to COVID-19 of all states in the US.
Approximately 54% of all Oregon employees, or 1,203,963 people, work in industries with a high or medium-high level of economic exposure to COVID-19. Also, 835,060 Oregon employees work in sectors with a low or medium-low level of economic exposure to COVID-19, representing 37% of all employees.
8. Small business financing in Oregon
The Community Reinvestment Act is a federal law that encourages commercial banks and savings associations to assist borrowers in all segments of their communities, including low- and moderate-income neighborhoods.
Large banks are required by the Community Reinvestment Act to disclose new small business loans. In 2019, reporting banks gave out $1 billion in loans to Oregon firms with $1 million or less in sales. The overall reported new lending to firms for loans of $100,000 or less was $1.2 billion, while the total reported new lending to businesses for loans of $1 million or less was $3 billion.
9. Oregon small business export statistics
In 2019, a total of 5,839 recognized businesses exported items worth $22.7 billion from Oregon. Approximately 5,143 (or 88.1%) of those exporters were small businesses. These small businesses shipped items worth $4.8 billion, accounting for 21.4% of all recorded business exports.
The Final Word
What draws people to Oregon? It’s popular among business owners because of its pro-business incentives, favorable tax system, and easy access to capital. It’s also a great place to live whether you enjoy the outdoors or prefer city living. Oregon has something for everyone, whether you have an established small business or are just starting out.
Sources
- Greater Portland Inc.
- Tax Foundation – State Business Tax Climate Index
- Oregon Business
- Oregon Business Report
- Newsweek
- Simply Business
- Patch
- Nolo
- IbisWorld
- US Small Business Administration