Idaho produces over a third of all potatoes farmed in the United States, making it one of the country’s most important agricultural states. The state grows a variety of potatoes, from wheat and soft white, to hard red and dark northern spring.
Lumber and wood production, food processing, equipment, paper and chemical products, electronics manufacturing, mining, and tourism are all prominent sectors in Idaho. The town of Gooding, Idaho, is home to the world’s largest barrel cheese processor. Each year, the factory produces more than 120,000 metric tons of barrel cheese.
In terms of business, Idaho is one of the most competitive states. It now ranks tenth on Forbes‘ annual “Best States for Business.” For decades, small companies have been the backbone of the Idaho economy. Idaho also ranks third among states in terms of the fastest growth in small business jobs, with a 20.73% gain between 2016 and 2020.
Here are a few small business statistics from the Gem State that will assist entrepreneurs in understanding the business landscape in the state.
Quick Idaho Small Business Statistics for Entrepreneurs
- Small businesses account for 99.2% of all Idaho businesses.
- Small business employees represent 56.2% of all Idaho employees.
- In 2020, firms with fewer than 20 employees had the largest share of small business employment, adding 11,561 net new jobs.
- Veterans make up 6.4% of employees and own 8.8% of small businesses.
- Racial minorities represent 7.8% of workers and own 3.1% of small businesses.
- There are 1,404 small business exporters in Idaho.
- Individuals working at their own unincorporated businesses have a median income of $22,209.
- In the 2021 CNBC “Top States for Business” report, Idaho scored an A+ in business friendliness and economy, a B+ in the cost of doing business, and an F in access to capital.
- Less than one-half of start-ups in Idaho survive more than five years.
- Iowa has a disposable personal income (DPI) of $43,900, which places it 43rd out of all 50 US states.
Idaho Small Business Statistics
1. What is considered a small business in Idaho?
Idaho follows the US Small Business Administration’s definition, which defines small businesses by firm revenue (ranging from $1 million to over $40 million) and by employment (from 100 to over 1,500 employees).
There are currently 176,029 small businesses in Idaho. That’s 99.2% of all Idaho businesses. Idaho also attracts foreigners interested in investing and establishing enterprises in the state. In 2018, Idaho had 4,956 immigrant entrepreneurs, accounting for 5% of all self-employed Idaho individuals.
2. How many Idahoans are employed by small businesses?
Small businesses in Idaho employ approximately 335,696 individuals, who collectively represent 56.2% of all employees in the state.
Since 2009, Idaho’s minimum wage has been set at $7.25 to match the federal minimum wage. The Idaho minimum wage applies to firms with four or more employees, excluding family members. Employees under the age of 20 can be paid $4.25 per hour for up to 90 days, while minors under the age of 16 who work part-time are totally exempt from the minimum wage regulations.
3. Idaho small business statistics by industry
Construction is the largest industry in Idaho in terms of small business investment. A total of 23,121 small businesses invested in this sector. Of this number, 15,681 businesses have no employees, 6,983 have 1–19 employees, while 457 have 20–499 employees.
On the other hand, the management of companies and enterprises sector is the smallest industry in Idaho, with 112 firms operating within it.
4. Idaho small business ownership by ethnicity
According to the US Census Bureau, the state of Idaho has a population of 1,900,923 residents. White/Caucasian Americans represent 93% of the total population, followed by Hispanic/Latino Americans at 12.8%, American Indian and Alaska Natives (1.7%), Asian Americans (1.6%), Black/African American (0.9%), and Native Hawaiian/Other Pacific Islander (0.2%).
The data below shows how small business ownership is distributed among these ethnic groups:
- White/Caucasian — 160,454
- Hispanic/Latino — 8,786
- Asian — 2,000
- Black/African American — 942
- American Indian and Alaska Natives — 400
- Native Hawaiian and Other Pacific Islander — 150
5. Idaho small business ownership by gender
Women own approximately 59,635 small businesses in Idaho. Of these, 53,000 are nonemployer businesses, while 6,635 have employees. Men own 89,695 small businesses with 70,000 being nonemployer businesses and another 19,695 with employees in their payrolls.
There are, however, 15,819 small businesses in Idaho that are owned by both men and women.
6. Business taxes in Idaho
The majority of LLCs (limited liability companies) in Idaho are pass-through tax entities. In other words, the burden for paying federal income taxes is passed through the LLC to the individual LLC members. Any money earned by an LLC that is not shared to members is taxed at the corporate tax rate.
In eight income brackets, the state personal income tax varies from 1.6% to 7.8%. The state sales tax is 6%, with a very restricted, selected local option of up to 6.5%. Sales tax is levied on the sale, rental, or lease of tangible personal property, as well as some services.
7. Small business financing in Idaho
According to the Community Reinvestment Act, banks must report any new loans offered to small businesses.
In 2019, reporting banks gave out $608.4 million in loans to Idaho firms with less than $1 million in revenue. The overall reported new lending to firms for loans of $100,000 or less was $555.9 million, while the total reported new lending to businesses for loans of $1 million or less was $1.6 billion.
8. Small business challenges in Idaho
Small business challenges in Idaho are more manageable than in other more densely populated states in the United States, but there are still some. The following are some of the most prevalent problems connected with establishing and managing a successful business in Idaho:
- Access to capital: Idaho has a smaller population than many other states, and this results in lower rates of access to funding for all company sizes. While numerous tools are still available to Idahoan company owners for raising finance, notably through alternative financing businesses, this has been a big problem for Idahoan business owners for quite some time.
- Low hourly wages: While the state of Idaho’s dramatically low hourly rates for employees have always been an advantage to Idahoan business owners, the state has recently been under pressure to boost its minimum wage. As four (out of six) of Idaho’s bordering states worked to hike their minimum wages by 2020, Idaho is under pressure to do the same.
- Tax compliance issues: This issue mostly affects new business owners not only in Idaho but all across the US also. Most people don’t have a penchant for bookkeeping and can get so caught up in their daily business activities that they completely forget about filing their taxes or renewing their licenses.
In order to stay on top of your business tax situation, you need to find a reputable registered agent in Idaho who will not only assist you with filing your taxes but also provide top notch business advice that will help you to manage your Idaho business. Read my review of the best registered agents in Idaho and find out which one is best for you.
9. Idaho small business export statistics
In 2019, 1,694 recognized enterprises exported items worth $3.1 billion from Idaho. Of those exporters, 1,434 (or 84.7%) were small businesses. Small businesses shipped items totaling $919 million, accounting for 29.3% of all recognized business exports.
The Final Word
Idaho has a lot to offer employers, employees, businesses, and entrepreneurs. People continue to gravitate to the state because of its continually growing business climate, which has resulted in a plethora of fantastic opportunities for everyone.
I hope these figures are informative to anybody considering starting or developing a business in the state of Idaho.
- US Small Business Administration
- Idaho Statesman
- CNBC Top States for business
- Idaho County Free Press
- North Idaho Business journal
- Idaho Department of Labor
- US Census Bureau
- Idaho SBDC