In a world where business destinations are becoming increasingly identical, New Mexico provides entrepreneurs with a distinct competitive edge through a strong value offering and a pro-business climate. The state provides myriad incentives to business owners, including the Manufacturers Investment Tax Credit and the Amber Grant for Women. Organizations of all sizes and sectors are embracing New Mexico as their business destination, and business is booming!
Take a look at the following small business statistics to have a better understanding of the state’s entrepreneurial ecosystem.
Quick New Mexico Small Business Statistics for Entrepreneurs
- Small businesses represent 99% of all businesses in the state.
- Approximately 54.4% of all employees in New Mexico work for small businesses.
- Racial minorities make up 20.6% of workers and own 7.3% of businesses.
- The per capita disposable income in New Mexico is $41,609.
- Between March 2019 and March 2020, 5,882 new businesses started in New Mexico, while 5,277 closed, for a net gain of 605.
- The annual CNBC “Top States for Business” report ranks New Mexico 38th out of 50 states.
- Military veterans account for 8.5% of small business ownership.
- New Mexico’s per capita consumption expenditure is $36,258.
- In 2019, small businesses in New Mexico exported goods worth $2.2 billion.
- Construction is the third largest industry in New Mexico in terms of small business investment, with a total of 16,093 firms invested in it.
New Mexico Small Business Statistics
1. What is considered a small business in New Mexico?
A small business, according to the Small Business Administration (SBA), is a privately held enterprise, such as a corporation, sole proprietorship, or partnership. It has no more than 1,500 workers and an average annual revenue of less than $38.5 million, depending on the industry. There are currently 158,844 small businesses in New Mexico that represent 99% of all private enterprises in the state.
New Mexico accounted for 26,721 of all new business applications submitted nationwide (roughly 5.8 million) from January 2021 to January 2022, ranking 12th fewest among states. Adjusting for population, New Mexico had 1,274 applications per 100,000 residents, which was lower than the national average and ranked 15th lowest among states.
When establishing a business in New Mexico, it’s important to seek the services of an LLC (limited liability company) formation service. They’ll not only process and submit your Articles of Organization to the state authorities, but will also receive all official communication from the Secretary of State on behalf of your business. Read my review of the best LLC services in New Mexico to learn more.
2. How many people are employed by small businesses in New Mexico?
There are 343,648 New Mexicans working for small businesses, accounting for 54.4% of the state’s paid workforce.
In 2022, the minimum wage in New Mexico was increased to $11.50 per hour (up from $10.50 an hour in 2021), which is higher than the federal minimum wage of $7.25 per hour. The New Mexico minimum wage applies to the majority of employees, with a few exclusions, such as tipped employees, students or part-time workers, and other exempt occupations. In 2023, this wage will be increased to $12 per hour.
3. New Mexico small business statistics by industry
The professional, scientific, and technical services sectors collectively account for the largest single industry in terms of small businesses investment, a total of 21,216 firms operate within these sectors. Approximately 17,153 firms within these sectors are nonemployer businesses, 3,724 have 1–19 employees, and another 339 have 20–499 employees.
The management of companies and enterprises sector is the smallest industry in New Mexico in terms of small business investment, with just 104 firms currently operating within the sector.
4. New Mexico small business ownership by ethnicity
New Mexico has a population of 2,096,829 and had an annual population growth of 0.1% over the five years leading up to 2019, ranking 37th out of all 50 US states. The largest racial group is White/Caucasian Americans, who represent 81.9% of the population. They are followed by Hispanic/Latino Americans (49.3%*), American Indians and Alaska Natives (11%), Black/African Americans (2.6%), and Native Hawaiian and Other Pacific islanders (0.2%).
The data below shows how small business ownership is distributed among these groups:
- White/Caucasian — 140,146
- Hispanic/Latino — 48,370
- Asian — 5,252
- Black/African American — 2,600
- American Indian and Alaskan Native — 2,556
- Native Hawaiian and Other Pacific Islander — 150
*This percentage represents Hispanic people from Caucasian, Latin, and African backgrounds.
5. New Mexico small business ownership by gender
Women own 62,236 small businesses in New Mexico. Approximately 55,500 women-owned firms are nonemployer businesses while 6,736 have employees. Men own 80,208 small businesses, 63,500 have no employees, while 16,708 have employees on payroll.
6. Business taxes in New Mexico
Limited liability companies are considered pass-through organizations in New Mexico, and are not compelled to pay income tax to either the federal government or the state. Instead, business revenue is allocated to individual LLC members, who pay federal and state taxes on the amount given to them. However, you might choose to have your LLC designated as a corporation. In that instance, the LLC would be subjected to the New Mexico corporate income tax. The state’s top corporate income tax rate is 5.9%.
It is critical to always be on top of your annual tax reporting. Failure to follow the New Mexico tax rules may place you and your business in hot water. Fortunately, that’s where registered agents come in to save the situation. A reputable registered agent will not only assist you with your tax filing issues, but will also send regular reminders to ensure you do not miss any essential filing deadlines. Read my review of the best registered agents in New Mexico to find out which agent is right for your business.
7. Small business financing in New Mexico
Congress passed the Community Reinvestment Act in 1977. It promotes depository institutions to assist in meeting the credit requirements of their communities, especially low- and moderate-income neighborhoods, while maintaining safe and sound operations.
Large banks are required by the Community Reinvestment Act to disclose new small business loans. In 2019, reporting banks gave out $387.7 million in loans to New Mexico firms with $1 million or less in revenue. Total new lending to firms with loans of $100,000 or less was $444.2 million, while total new lending to businesses with loans of $1 million or less was $976.1 million.
8. How COVID-19 affected small businesses in New Mexico
Based on the percentage of employees in sectors with a high or medium-high degree of exposure to COVID-19, New Mexico has the 10th greatest economic exposure to COVID-19 of all states in the US.
Approximately 521,449 employees work in sectors with a high or medium-high level of economic exposure to COVID-19, representing 58% of all employees in New Mexico. A total of 313,044 employees work in sectors with a low or medium-low degree of economic exposure to COVID-19, accounting for 35% of all employees in New Mexico.
9. New Mexico small business export statistics
In 2019, 1,455 identified enterprises exported items worth $4.6 billion from New Mexico. A total of 1,210 (or 83.2%) of the exporters were small businesses that shipped items worth $2.2 billion, accounting for 47.6% of total exports by recognized businesses.
The Final Word
The Land of Enchantment is the place to be. It provides authentic culture and diversity that appeals to individuals with an adventurous spirit. New Mexico is still firmly entrenched in culture and art, and it boasts a very diverse topography that offers year-round outdoor leisure experiences ranging from skiing to high-desert trekking, and, believe it or not, all of this comes at a lower-than-average cost of living.
- US Small Business Administration
- US Census Bureau
- Tax Foundation
- CNBC Top States for Business
- Foreign USA