Small businesses in Delaware contribute significantly to the state’s economy and culture. They represent a significant share of Delaware’s jobs statistics.
For many Delaware citizens, owning a small business is an exciting way to provide for their families, acquire entrepreneurial skills, and attain sustainable socio-economic development. Small businesses contribute in ways that go beyond the financial well-being of their employees and owners.
But how big are the contributions of Delaware’s small businesses? I’ve compiled an interesting list of small business statistics from the Blue Hen State to help entrepreneurs understand just how their efforts contribute to not only the state’s but also America’s vibrant economy.
Quick Delaware Small Business Statistics for Entrepreneurs
- Small businesses account for 98.4% of all businesses in Delaware.
- Small business employees represent 46.8% of Delaware employees.
- Minority- and women-owned businesses make up a smaller proportion of overall employer firms and workers in Delaware than they do nationally.
- Small firms with less than 50 workers account for a far bigger proportion of economic activity in Kent and Sussex Counties than in New Castle County.
- In Delaware, veteran-owned firms employ a greater proportion of the overall workforce than minority-owned enterprises.
- The construction industry is the third largest industry in terms of small business investment.
- More than 80% of employment in the finance and insurance and management of companies and enterprises sectors is held by businesses with more than 500 employees.
- In a 2021 CNBC Top States for Business survey, Delaware scored a B+ in business friendliness but also scored a D- in access to capital.
- In 2019, small businesses exported goods worth $914.0 million, making up 22.8% of exports from all business exporters in the state.
- Delaware citizens who work for themselves in their incorporated businesses earn more than every other type of worker except those employed by the federal government.
Delaware Small Businesses Statistics
1. What is considered a small business in Delaware?
Delaware follows the US Small Business Administration’s (SBA) definition, which categorizes a business with fewer than 500 employees as a small business.
According to this definition, there are currently 88,051 small businesses in Delaware that represent 98.4% of all businesses in the state. Small businesses with less than 50 workers account for a far bigger proportion of economic activity in Kent and Sussex Counties than in New Castle County.
2. Delaware small business employment statistics
There are 190,042 small business employees in Delaware that account for 46.8% of all employees in the state. Racial minorities make up 28.8% of employees while veterans represent 6.4% of all workers in the state.
The state’s minimum wage is set to increase from $9.25 per hour (2021), to $10.50 on January 1, 2021. This comes after the state legislators voted in June 2021 to increase the state’s minimum wage incrementally on a yearly basis. This should continue through 2025.
3. Delaware small businesses by industry
The professional, scientific, and technical services sectors are the largest in the state in terms of small business investment. There are currently 12,883 small businesses invested in these sectors. The real estate, rental, and leasing sector is the second largest, with 11,501 small businesses, followed by the construction sector with 8,606.
On the other hand, only 26 small businesses operate in the mining, quarrying, and oil and gas extraction sectors. They are the smallest industries in Delaware.
4. Delaware small business ownership by ethnicity
The US Census Bureau estimates Delaware’s population to be 1,003,384 residents. White/Caucasian Americans make up 69.2% of the state’s population. Black/African Americans represent 23.2% of the population, Hispanic/Latino Americans make up 9.6%, and Asian Americans 4.1%, while Native American and other Pacific Islanders account for the smallest ethnic demographic in Delaware at 0.1%.
Small business ownership is distributed among these ethnicities as follows:
- White/Caucasian — 62,591
- Black/African American — 9,400
- Hispanic — 3,929
- Asian — 5,051
- Native Hawaiian and Other Pacific Islander — 30
5. Delaware small business ownership by gender
According to the 2019 Annual Business Survey by the US Census Bureau, there are 27,499 women-owned small businesses in Delaware. Around 24,000 of them have no employees while only 3,499 have employees.
Men own 45,355 small businesses in the state. Approximately 34,000 of these businesses are non-employee while another 11,355 have employees.
Another 5,214 small businesses in Delaware are owned by both men and women.
6. How COVID-19 has affected small businesses in Delaware
According to a survey conducted between March 31, 2020, and April 3, 2020, of more than 400 business owners by the Delaware Prosperity Partnership (a public-private economic development partnership), there were more layoffs and closures than in earlier surveys during the same period and more companies reported declining profits as the state-mandated shutdown forced a majority of businesses to close down.
Approximately 37% of respondents said they closed down shop. The sectors that experienced the worst of the pandemic were arts, entertainment, and recreation, where 78% were forced to close down due to the reduced foot traffic, followed by the childcare sector, where 77% had stopped operating entirely.
7. Delaware small business financing
As stipulated in the Community Reinvestment Act, large banks are required to report every single dollar they lend to small businesses.
In 2019, banks in Delaware paid out $273.9 million in loans to businesses with $1 million or less in sales. Total reported new lending to businesses was $278.9 million for loans of $100,000 or less, while total reported new lending to businesses for loans of $1 million or less was $762.5 million.
8. Delaware small business export statistics
In 2019, the Census Bureau released a profile of US importing and exporting companies. The document lists a total of 2,315 recognized businesses that exported items worth $4 billion from Delaware.
Small businesses accounted for 2,025 of those exporters, or 87.5%. Also, small businesses shipped items totaling $914 million, accounting for 22.8% of all recognized firm exports.
9. Delaware small business challenges
Apart from challenges brought about by the COVID-19 pandemic, here are a couple of problems that small businesses in Delaware face on a daily basis:
- Hiring: Many Delaware small businesses struggle to find qualified employees. Unfortunately, the expense of recruiting new workers, which includes training, equipment, taxes, and incentives, continues to rise. All of these factors must be considered before determining the remuneration for the employees.
- Compliance with taxes and state regulations: In Delaware, you can easily get yourself in trouble with the law by missing your tax returns. Having a penchant for record keeping is important so that you don’t miss any key filing dates.
You can reduce the stress involved in finding new employees for your business or filing your taxes by simply finding the right registered agent for your business. A good registered agent will remind you when your business taxes are due and will also help you to file the tax report. They will also make sure that your business stays in compliance with all the rules and regulations set forth by the state.
However, there are hundreds of fake companies out there that could compromise your data. Read my review of the best registered agents in Delaware to find out which one is best for your business.
The Final Word
Small businesses adorn Delaware’s urban and rural landscapes, anchoring communities, reflecting heritage, and presenting a distinct character appealing to long-time residents, newcomers, and visitors alike. These statistics identify the key aspects of the small business landscape in the state and should assist the aspiring entrepreneur in making the right decision when starting a business in the Diamond State.
- US SBA Small Business Profiles
- CNBC Top States for Business – Delaware
- Delaware Business Times
- University of Delaware – Delaware Small Business Landscape
- US Chamber of Commerce
- American Community Survey
- Annual Business Survey