One of the most appealing aspects of launching a business in Nebraska is the ability to take advantage of the business-friendly atmosphere and community. According to CNBC, the Cornhusker State has one of the top 15 business climates in the country. It is one of the most competitive business locations in the whole Midwest.
Here are a few small business statistics that will shine a light on the impact that small businesses have on the Nebraska economy.
Quick Nebraska Small Business Statistics for Entrepreneurs
- Small businesses account for 99.1% of all private enterprises in the state.
- Approximately 49.2% of Nebraska employees work for small businesses.
- Racial minorities own 5.3% of businesses in Nebraska.
- Military veterans make up 5.6% of workers and own 8.7% of businesses.
- The per capita disposable income in Nebraska is $53,263.
- According to the annual CNBC “Top States for Business” report, Nebraska ranks 13th out of 50 states.
- In 2019, small businesses in Nebraska exported goods worth $1.3 billion.
- Between March 2019 and March 2020, 6,250 Nebraska businesses opened and 6,163 closed, resulting in a net increase of 87.
- The per capita consumption expenditure in Nebraska is $41,690.
- The sales tax rate in Nebraska is 5.5%.
Nebraska Small Business Statistics
1. What is considered a small business in Nebraska?
According to the Small Business Administration (SBA), which sets small business standards in Nebraska, a small business is defined as having fewer than 500 workers for manufacturing enterprises and less than $7.5 million in annual revenue for most non manufacturing businesses.
There are currently 180,988 small businesses that represent 99.1% of all private enterprises in Nebraska. The state accounted for 20,855 of all new business applications submitted nationwide (nearly 5.8 million) from January 2021 to January 2022, ranking 11th among states. However, when adjusting for population, Nebraska had 1,078 applications for every 100,000 residents, which was lower than the national average and ranked third among states.
If you’re thinking of starting a business in Nebraska, you need to find a limited liability company (LLC) formation service that will help you during the daunting registration process by processing and submitting your Articles of Organization to the Nebraska Secretary of State on your behalf. Read my review of the best LLC services in Nebraska to find out which is best for you.
2. How many people are employed by small businesses in Nebraska?
Nebraska’s small businesses currently have a total of 415,989 employees working for them. That is 49.2% of the entire state’s workforce.
Nebraska’s minimum wage is $9.00 per hour, which is $1.75 more than the federal minimum wage of $7.25. Although the Nebraska minimum wage was raised in 2016, the rate is reviewed annually depending on inflation and the Consumer Price Index.
There are a few exceptions to this wage. Student employees and interns, for instance, can be paid 75% of the minimum wage, or $6.75 per hour. Employers can pay tipped employees a minimum of $2.13 per hour while keeping their gratuities, and any new employee under the age of 20 who isn’t a seasonal or migratory worker can be paid 75% of the federal minimum wage for the first 90 days of employment.
3. Nebraska small business statistics by industry
The construction industry is the largest sector in Nebraska in terms of small business investment with a total 22,238 firms operating in it. Approximately 15,828 of these firms have no employees, 5,945 have 1–19 employees, while 465 have 20–499 employees.
The utilities industry is the smallest sector in the state with only 58 small businesses invested in it.
4. Nebraska small business ownership by ethnicity
Nebraska has a population of 1,963,692 people with an annual population growth rate of 0.6% for five years to 2019, ranking 19th out of the 50 US states. White/Caucasian Nebraskans form the largest ethnic group representing 88.1% of the population. They are followed by Hispanic/Latino Americans (11.4%), Black/African Americans (5.2%), Asian Americans (2.7%), American Indian and Alaska Natives (1.5%), 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 — 165,694
- Hispani/ Latino — 17,065
- Black/ African American — 4,400
- Asian — 4,319
- American Indian and Alaska Native —- 475
- Native Hawaiian and Other Pacific Islander — 60
5. Nebraska small business ownership by gender
There are 61,491 small businesses owned by women in Nebraska. Around 55,000 of these firms are nonemployer businesses and 6,491 have employees working for them. Men own 97,638 small businesses of which 74,500 have no employees and 23,138 have employees on payroll.
There are also 15,377 small businesses that are equally owned by both men and women.
6. Business taxes in Nebraska
Standard LLCs are considered pass-through tax entities in Nebraska and are not obliged to pay income tax to either the federal government or the state. LLCs are likewise exempt from Nebraska’s corporate income tax. Instead, corporate revenue is dispersed to individual LLC members, who then pay federal and state taxes on the amounts allotted to them.
However, while LLCs are typically taxed as partnerships (or, in the case of single-member LLCs, disregarded entities), you can decide to have your LLC taxed as a corporation. In such an instance, the LLC would have to pay Nebraska’s corporate income tax as well.
The top corporate income tax in Nebraska is 7.81%. According to the Tax Foundation, Nebraska is ranked 28th out of 50 states in the organization’s State Business Tax Climate Index Ranking.
It is imperative that you always file your business taxes on time if you want your LLC to maintain a good standing with the Nebraska Secretary of State’s office. A registered agent can help you with the daunting tax filing process and also make sure you are notified of all impending filing dates.
To find out how your business can benefit from the services of a registered agent, read my full review of the best registered agents in Nebraska.
7. How COVID-19 affected small businesses in Nebraska
Based on the percentage of employees in sectors with a high or medium–high level of COVID-19 exposure, Nebraska has the 46th greatest economic exposure to COVID-19 of all states in the US.
In Nebraska, 44% of all employees, or 497,300 people, work in industries with a high or medium–high degree of economic exposure to COVID-19. Further, 15% of all employees, or 175,319 people, work in industries with a low or medium–low degree of economic exposure to COVID-19.
8. Small business financing in Nebraska
The Community Reinvestment Act (CRA), passed in 1977, compels the Federal Reserve and other federal banking authorities to encourage financial institutions to assist in meeting the credit requirements of the communities in which they operate, especially low- and moderate-income (LMI) neighborhoods.
Large banks are required by this statute to disclose new small business loans. In 2019, reporting banks paid out $594.2 million in loans to Nebraska firms with $1 million or less in sales. Total reported new lending to firms with loans of $100,000 or less was $492.8 million, while total reported new lending to businesses with loans of $1 million or less was $1.5 billion.
9. Nebraska small business export statistics
According to data from the US Census Bureau’s profile on US exporting and importing companies, 1,934 recognized firms shipped items worth $7.2 billion from Nebraska in 2019. Approximately 1,560 (or 80.7%) of the exporters were small businesses that shipped items totaling $1.3 billion, accounting for 18.3% of all reported business exports.
The Final Word
Nebraska provides a high standard of living, decent employment, outstanding schools, safe towns, inexpensive housing, and an unrivaled quality of life. The mission of the state government is to make Nebraska an even better location to live, work, and raise a family.
The Nebraska Advantage Act was enacted by the state legislature in 2013, with the goal of making the state the go-to destination for business owners and executives looking for the perfect spot to start or develop their enterprises. Nebraska has become a leading contender for high-wage employment and cutting-edge technology-driven sectors that sustain and build the state’s free market economy nine years after the act was passed.
- US Small Business Administration
- University of Nebraska – Lincoln
- CNBC Top States for Business
- US News
- Lincoln Area Development Partnership
- Nebraska Public Media
- Tax Foundation
- 247 Wall Street
- Census Bureau