Georgia boasts one of the best business and economic climates in the country. The Peach State has consistently been ranked as one of the best states to establish or manage a business for numerous years. This is due to the state government’s pro-business policy, as well as the state’s reputation for job creation, proximity to some of the world’s largest consumer markets, world-class education system, highly qualified workforce, and high quality of life.
Small businesses are frequently cited as a major engine of the Georgia economy, and with good cause. Small businesses are more versatile than larger corporations, which encourages competition and innovation in the economy. Strong small businesses build strong communities, and entrepreneurship is the best way for immigrants to integrate into the social and economic life of the United States.
Here are a few small business statistics from the state of Georgia that will shed light on the state’s current business climate.
Quick Georgia Small Business Statistics for Entrepreneurs
- Small businesses represent 99.6% of all Georgia businesses.
- Small business employees account for 42.8% of all employees in Georgia.
- Veterans make up 6.0% of employees and own 7.8% of small businesses.
- Women own 45.8% of small businesses in Georgia.
- Racial minorities represent 39.6% of workers and own 35.9% of businesses.
- Many businesses rely heavily on international commerce, and Georgia has 13,195 small business exporters.
- Out of all states, Georgia is the fourth-least dependent on small businesses for employment.
- The professional, scientific, and technical services sectors are the largest industries in Georgia.
- The Georgia industry with the most women-owned firms with paid employees is professional, scientific, and technical services, closely followed by the healthcare and social assistance industry.
- The automobile manufacturing sector in Georgia comprises 85% small businesses.
1. What is considered a small business in Georgia?
According to the Georgia Small Business Administration (SBA), a small business is an independently owned and operated enterprise with fewer than 500 employees that brings in $30 million or less in yearly gross receipts.
Applying this definition, 1.1 million small businesses currently operate in Georgia, representing 99.6% of all businesses in the state.
2. How many Georgians are employed by small businesses?
There are 1.7 million small business employees in Georgia, who represent 42.8% of all employees in the state.
The state minimum wage in Georgia is $7.25 per hour. This corresponds to the current federal minimum wage rate. The minimum wage applies to the majority of employees, with a few exclusions, such as tipped employees and some student workers.
Georgia’s minimum wage used to be $5.85 per hour prior to the federal minimum wage increase in 2008. Since this figure is lower than the federal minimum wage and hence out of date, the federal minimum wage takes priority.
3. Georgia small business statistics by industry
The professional, scientific, and technical services industries are the largest in the state with 158,559 small businesses currently operating under these categories. From this number, 138,277 are nonemployer businesses, 18,793 have 1–19 employees, and another 1,489 employ 20–499 workers.
The mining, quarrying, and oil and gas extraction industries make up the smallest number of small businesses in Georgia, with just 241.
4. Georgia small business ownership by ethnicity
The US Census Bureau estimates the population to be at 10,799,566 (2021). Whites/Caucasian Americans are the majority ethnic group, representing 60.2% of the population. Blacks/African Americans come in second at 32.6% of the population, followed by Hispanic/Latinos at 9.9%, Asians at 4.4%, American Indian/Alaska Native (0.5%), and Native Hawaiian and Other Pacific Islanders (0.1%).
Small business ownership is distributed among these races as follows:
- White/Caucasian — 683,651
- Black/African American — 301,300
- Hispanic — 81,711
- Asian — 76,878
- American Indian and Alaska Native — 2,110
- Native Hawaiian and Other Pacific Islander — 814
5. Georgia small business ownership by gender
According to American Express 2017 State of Women-Owned Firms Report, Georgia was placed sixth in the country for states where women-owned businesses have strengthened their economic clout in the last ten years. Economic clout represents the increase in the number of enterprises, as well as the increase in employment and revenue.
There are currently 452,913 women-owned small businesses, of which 416,000 have no employees, and only 36,913 have employees. Men own 577,447 small businesses in Georgia, with 468,000 being nonemployer businesses and 109,447 with employees on payroll.
There are 35,551 small businesses in the state of Georgia that are run by both men and women.
6. Business Taxes in Georgia
Georgia has a 5.75% personal income tax and a comparable corporation tax rate for C corps (corporations that are taxed separately from their owners). In addition, there is the state sales tax, which is 4%, as well as the municipal sales tax. Total rates differ depending on which of the state’s 162 counties a small business operates in.
7. Small business financing in Georgia
Small companies seeking a conventional loan or line of credit will most likely be able to obtain one if they have solid financials and a viable business strategy. According to the most recent available SBA statistics, the number of banks decreased from 192 to 181 in 2017.
Below is a list of some of the major institutions that provide capital funding to entrepreneurs in Georgia:
- Access to Capital for Entrepreneurs (ACE): ACE is one of Georgia’s largest nonprofit lenders, servicing dozens of counties around the state. ACE has been approved as a Community Development Financial Institution (CDFI) by the United States Department of the Treasury. CDFIs are nonprofits that lend to women, minorities, veterans, and other underrepresented people in the community.
- Georgia State Small Business Credit Initiative: The federal Small Business Jobs Act of 2010 spawned the Georgia State Small Business Credit Initiative (SSBCI). Each state is given money from the federal government to improve local lending programs that help small businesses.
- Wells Fargo Business Loans: Wells Fargo is Georgia’s leading small business lender, and any entrepreneur considering opening a firm there should look into it. They are Georgia’s most active SBA lender, having provided over $35 million in loans in 2018. They provide some of the lowest interest rates on the market.
8. How Covid-19 affected small businesses in Georgia
When the COVID-19 pandemic wreaked havoc on Georgia’s economy, few sectors were hit worse than small companies. According to a Global State of Small Business Report by Facebook, small businesses continue to be under a cloud of uncertainty as a result of COVID-19 concerns.
For instance, due to decreased demand, cash collection shortages, and changes in consumer behavior, 41% of small business surveyed are still expecting cash flow challenges in 2022, a full nine points above the national average, and 32% of businesses are still expecting a lack of demand for their products or services in the coming months.
9. Georgia small business challenges
Here is a list of challenges that small businesses in Georgia face in this day and age:
- Remote work management: Remote employment, in general, is one of the most pressing issues facing small businesses in the next year. Remote work isn’t going away since it saves businesses money by reducing the need for several office workstations. According to Harvard Business Review, the number of digital nomads in the United States increased to over seven million in 2019 and over 10.9 million the following year. Remote work has its own share of issues, chief among them being finding the right talent.
- Supply chain slowdowns: Overcoming supply shortages and late delivery as a result of the supply chain issue at American seaports is one of the top small business challenges in 2022. Prices rise when supplies become increasingly scarce. Labor scarcity, hefty storage prices, and pandemic concerns have all contributed to an increase in consumer demand. All of these issues exacerbate the supply chain dilemma.
- Poor tax compliance: Payment isn’t one of the most pressing challenges that businesses encounter when it comes to federal taxes. It’s the cost of compliance. Small firms are disproportionately burdened by this expense compared to their larger rivals. According to the IRS, businesses with less than $1 million in sales are responsible for approximately two-thirds of all compliance expenditures.
Small business owners can handle tax compliance issues by hiring a reliable registered agent in Georgia. A good registered agent will take care of all your business’s tax compliance issues and ensure that you are in good standing with the Georgia Secretary of State.
Read my review of the best registered agents in Georgia to find out which company is the best choice for your business.
10. Georgia small business export statistics
The US Census Bureau’s profile on exporting and importing companies states that in 2019 a total of 15,099 businesses shipped items worth $38.3 billion from Georgia. Small businesses accounted for 13,232 (or 87.6%) of all exporters. Small businesses shipped $10.5 billion in products, accounting for 27.4% of total exports by recognized businesses.
The Final Word
Georgia offers a plethora of fantastic incentives to employers and employees alike. Entrepreneurs from all over the world continue to flock to the state because of its large population, international access via the busiest airport in the world (Hartsfield–Jackson Atlanta International Airport), world-class infrastructure, healthy import/export market, great education system, and highly skilled workforce.
These small business statistics are useful for anybody wishing to establish a business in Georgia, promote your firm to other small businesses, or expand your business in the state.
- US SBA – Small Businesses Profile
- US Census Bureau – Georgia Demographics
- CNBC – Top States for Business
- University of Georgia
- Metro Atlanta CEO
- Insider Advantage
- US Census Bureau – Annual Business Survey
- Facebook – Global State of Small Business Report
- Georgia State Small Business Credit Initiative
- Access to Capital for Entrepreneurs