The Magnolia State has long been regarded as one of the top tourist destinations in the United States. Casino gambling in particular has played an important role in raising income and economic opportunities for the state’s residents.
As a result, Mississippi has seen an increase in new businesses, particularly in the resort cities of Bay St. Louis, Biloxi, and Gulfport, as well as in the towns of Greenville and Vicksburg along the Mississippi River. Mississippi is also ranked sixth in the US in terms of gambling profits, at $2.25 billion.
Here are a few small business statistics from the Hospitality State that should help you grasp its business landscape.
Quick Mississippi Small Business Statistics for Entrepreneurs
- Small businesses account for 99.3% of all Mississippi businesses.
- Approximately 46.3% of Mississippi employees work for small businesses.
- Racial minorities own 31.2% of businesses.
- Veterans represent 8% of small business ownership in Mississippi.
- The per capita disposable income in Mississippi is $37,834.
- Mississippi small business employment increased by 4.6% between 1994 and 2018, reaching 437,791 employees by 2018.
- Small firms exported goods worth $1.7 billion in 2019.
- Mississippi’s Gross State Product (GSP) hit $104.2 billion in 2019, up 0.8% over the previous five years.
- Recent report by the US Chamber of Commerce lists Mississippi, Nebraska, and Maine as the three states where small-to-medium businesses have grown the most year over year.
- According to the annual CNBC “Top States for Business” report, Mississippi ranks 45th out of 50.
Mississippi Small Business Statistics
1. What is considered a small business in Mississippi?
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). A landscape contractor, for example, is considered a small business if its annual sales are $16.5 million or less. A leather tanning plant, on the other hand, is considered a small firm if it employs less than 750 people.
Based on this description, there are a total of 264,858 small businesses in Mississippi that represent 99.3% of all private enterprises in the state.
Mississippi accounted for 69,856 of all new business applications submitted nationwide between January 2021 and January 2022, ranking 24th among states. Adjusting for population, Mississippi had 2,347 applications per 100,000 residents, which was more than the national average, and ranked sixth highest among states.
Establishing a business in Mississippi is not a walk in the park. There are a lot of red tapes and legal processes that an entrepreneur has to go through. However, having a licensed LLC (limited liability company) formation service by your side can reduce the burden.
To find out how an LLC formation service can help you out, read my review of the best LLC services in Mississippi.
2. How many people are employed by small businesses in Mississippi?
There are 437,791 Mississippians that work for small businesses in the state. Because Mississippi lacks a state imposed minimum wage, the federal minimum wage regulates what workers are paid unless a worker is excluded from the minimum wage under federal law. The federal minimum wage is currently $7.25 per hour. That works up to around $15,000 each year. Mississippi’s minimum wage was last changed in 2009, when it increased by 70 cents.
Tipped employees who earn at least $30 in tips per month, on the other hand, are eligible to be paid an hourly cash salary of $2.13, while workers under the age of 20 are allowed to be offered a minimum wage of $4.25 per hour during the first 90 days of employment. In addition, certain nonprofit and educational organizations may be able to pay employees 85% of the state’s minimum wage.
3. Mississippi small business statistics by industry
The construction industry has the largest concentration of small businesses compared with other industries in the state, equaling a total of 33,004. There are 29,209 small enterprises within this industry with no employees, 3,401 have 1–19 employees, and 394 have 20–499 employees.
There are 141 small businesses in the management of companies and enterprises industry, making it the smallest industry in the state.
4. Mississippi small business ownership by ethnicity
Mississippi has a population of 2,976,149 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 59.1% of the population. Black/African Americans make up the second largest group(37.8%), followed by Hispanic/Latinos (3.4%), Asians (1.1%), American Indian and Alaska Natives (0.6%), and Native Hawaiian and other Pacific Islanders (0.1%).
Here is a breakdown of how small business ownership is distributed among these groups:
- White/Caucasian — 174,374
- Black/African American — 71,357
- Asian — 6,834
- Hispanic/Latino — 4,725
- American Indian and Alaska Native — 346
- Native Hawaiian and Other Pacific Islander — 50
5. Mississippi small business ownership by gender
Women own a total of 104,159 small businesses in Mississippi. Around 97,500 of these are nonemployer businesses and 6,659 have employees. Men own 140,943 small firms, 115,000 of which are nonemployer businesses, and 25,943 have employees.
There are 8,789 more businesses that are owned by both men and women.
6. Business taxes in Mississippi
Mississippi levies both a corporate income tax and a business franchise tax. Depending on its legal structure, your company may be liable to one, both, or neither of these taxes. The majority of small businesses in Mississippi are LLCs, which have been exempt from Mississippi’s corporate franchise tax.
Instead, business revenue is dispersed to individual LLC members, who then pay federal and state taxes on the amounts allocated to them. However, you might choose to have your LLC designated as a corporation. In that event, the LLC would be liable to Mississippi’s corporate income tax as well as the corporate franchise tax.
The top corporate income tax rate in Mississippi is 5%. The Tax Foundation ranks the state 35th out of 50 states in its latest “State Business Tax Climate Index” report.
It is imperative for you to stay in compliance with the state’s tax code. Failure to do so might land you and your businesses in serious financial and legal trouble.
However, that doesn’t mean you have to go through the boring and laborious process of filing taxes by yourself—that’s what registered agents are for!
A good Mississippi registered agent will send you constant compliance alerts so that you don’t miss any important filing dates. They will also assist you with the filing process so that you have time to concentrate on what’s important . . . your business! Read my review of the best registered agents in Mississippi to find out which agent is best for you.
7. How COVID-19 affected small businesses in Mississippi
Mississippi has the 30th greatest economic exposure to COVID-19 in the US, based on the percentage of employees working in industries with a high or medium-high degree of exposure to COVID-19.
In Mississippi, 47% of all employees, or 626,127 people, work in industries with a high or medium-high degree of economic exposure to COVID-19. Also, 36% of all employees, or 481,763 people, work in industries with a low or medium-low degree of economic exposure to COVID-19.
8. Small business financing in Mississippi
Large banks are required by the Community Reinvestment Act to disclose new small business loans. In 2019, reporting banks gave out $778.6 million in loans to Mississippi firms with $1 million or less in sales. The overall reported new lending to firms for loans of $100,000 or less was $603.4 million, while the total reported new lending to businesses for loans of $1 million or less was $1.9 billion.
9. Mississippi small business export statistics
In 2019, a total of 2,051 recognized businesses exported items worth $11.3 billion from Mississippi. Approximately 1,542 (or 75.2%) of those exporters were small businesses. These small businesses shipped items worth $1.7 billion, accounting for 15.5% of all recorded business exports.
The Final Word
It’s not just Americans and Mississippians who are establishing small enterprises in the state. Despite the fact that the state is not particularly appealing to international entrepreneurs, some immigrants have chosen to make Mississippi their home for business.
The Magnolia State is an important contributor to America’s thriving economy. Mississippi has earned a reputation for being a pro-business state in recent years, which has resulted in a favorable economic climate.