Utah takes pride in offering a hospitable environment for entrepreneurs and creative people. If you’re searching for a place to start a small business, Utah’s entrepreneurial spirit, stunning landscapes, and friendly residents may be just what you’re looking for.
Here are a few small business statistics that show how small businesses are making an impact in the $182.88 billion Utah economy.
Quick Utah Small Business Statistics for Entrepreneurs
- Small businesses in Utah account for 99.3% of all private enterprises in the state.
- 45.4% of all Utah employees are employed by small businesses.
- In 2019, small businesses in Utah exported goods worth $11.1 billion.
- Veterans account for 3.9% of workers and 5.4% of small business owners.
- Women own 43.8% of small businesses and account for 44.6% of employees.
- Racial minorities account for 4.9% of small business ownership.
- Between March 2019 and March 2020, 12,927 new businesses started in Utah, while 10,968 closed, for a net gain of 1,959.
- Within the same period, opening and expanding Utah businesses added 153,107 jobs, while closing and contracting businesses lost 130,812, for a net increase of 22,295 jobs.
- The per capita disposable income (DPI) in Utah is $46,320.
- Retail trade is the third-largest industry in Utah in terms of small business investment, comprising a total of 33,646 firms.
Utah Small Business Statistics
1. What is considered a small business in Utah?
According to the US Small Business Administration, the definition varies by industry but takes into account the number of workers and yearly receipts. A small business can be formed as a partnership, sole proprietorship, or privately owned corporation. It makes less profit than larger corporations or organizations and employs fewer than 500 people.
Utah accounted for 68,579 of all new business applications submitted nationwide (about 5.8 million) from January 2021 to January 2022, ranking 23rd among states. Adjusting for population, Utah had 2,139 applications per 100,000 residents, which was more than the national average and ranked ninth among states.
It’s not easy to start a business in Utah. An entrepreneur must go through a number of legal procedures just to get an accredited license. However, having an LLC (limited liability company) formation service on your side might alleviate the load. Read my review of the best LLC services in Utah to see how an LLC formation service may assist you.
2. How many people are employed by small businesses in Utah?
There are approximately 606,609 Utahns employed by small businesses in Utah. That’s 45.4% of all employees in the state. Utah’s minimum wage is $7.25, the same as the federal minimum wage. The state minimum wage last increased by $0.70, from $6.55 to $7.25, in 2008. Every employee in the state has the right to be paid at least the minimum wage. There are, however, a few exceptions.
Employers in Utah are permitted by law to claim a tip credit for employees who earn more than $30 per month in tips. Employers can pay a lesser minimum cash wage of $2.13 per hour, and they can deduct up to $5.12 in tips collected per hour from employee earnings as a “tip credit.”
Employees under the age of 20 are entitled to a training minimum wage of $4.25 per hour for the first 90 days of employment in Utah. In terms of overtime pay, the Utah overtime minimum wage is $10.88 per hour for people who work more than 40 hours per week.
3. Utah small business statistics by industry
The professional, scientific, and technical services industry is by far the largest industry in Utah in terms of small business investment, with a total of 51,628 small businesses currently operating in this industry. Approximately 41,224 of them have no employees, 9,701 have 1–19 employees, and another 703 employ 20–499 workers.
4. Utah small business ownership by ethnicity
Utah has a population of 3,337,975 residents and an annual population growth of 1.8% over the five years to 2019, which ranks third out of all 50 US states.
White/Caucasian Americans are the majority, representing 90.6% of the population. They are followed by Hispanic/Latino Americans (14.4%)*, Asian Americans (2.7%), American Indians and Alaska Natives (1.6%), Black/African Americans (1.5%), and Native Hawaiian and Other Pacific Islanders (1.1%).
The details below show how small business ownership is distributed among these ethnic groups:
- White/Caucasian — 279,503
- Hispanic/Latino — 19,347
- Asian — 8,657
- Black or African American — 2,644
- Native Hawaiian and Other Pacific Islander — 1,300
- American Indian and Alaska Native — 588
*Hispanic people may be of any race, so also are included in applicable race categories.
5. Utah small business ownership by gender
Women own 101,750 small businesses in the state of Utah. Only 90,500 of these firms have employees, and the remaining 11,250 are nonemployer businesses. Men own 165,255 small businesses, of which 126,000 are nonemployer businesses and 39,255 have employees on their payrolls.
There are also 26,846 small businesses owned by both men and women.
6. How COVID-19 affected businesses in Utah
Based on the percentage of employees in sectors having a high or medium-high degree of exposure to COVID-19, Utah has the 45th greatest economic exposure to COVID-19 of all states in the US.
In Utah, 44% of all employees, or 779,347 people, work in industries with a high or medium-high degree of economic exposure to COVID-19. Approximately 20% of all Utah employees, or 347,456 people, work in industries with a low or medium-low degree of economic exposure to COVID-19.
7. Small business financing in Utah
According to the Community Reinvestment Act (CRA), large banks are required to report new small business loans paid to companies with annual revenues of less than $1 million. In 2019, reporting banks gave $691.9 million in loans to Utah enterprises with less than $1 million in revenue. Total reported new lending to firms with loans of $100,000 or less was $988.8 million, while total reported new lending to businesses of $1 million or less was $2.3 billion.
8. Business taxes in Utah
In Utah, LLCs are considered pass-through tax companies and are not obliged to pay income tax to either the federal government or the state of Utah. Instead, corporate revenue is dispersed to individual LLC members, who pay federal and state taxes on the amount they earn.
However, you might choose to have your LLC classed as a corporation. In such instances, the LLC would have to pay Utah’s corporation tax as well. Utah’s top corporate income tax rate is 4.95%.
Hiring a reliable registered agent firm can solve a Utah entrepreneur’s tax problems in an instant. A registered agent will not only help you file your taxes, but will also send you regular reminders about upcoming filing deadlines.
To find out which registered agent in Utah is ideal for you, read my review of the best registered agents in Utah.
9. Utah small business export statistics
In 2019, 3,668 identified enterprises exported items worth $16.5 billion from Utah. Small businesses accounted for 3,099 (or 84.5%) of those exporters. Small businesses shipped items worth $11.1 billion, accounting for 67.3% of total exports by identified businesses.
The Final Word
Utah has earned national recognition as one of the best states for business for good reason. The Beehive State offers some of the lowest taxes in the country, excellent infrastructure, and a financially responsible administration that promotes job creation and economic progress.
Utah also has the most national parks in the US, including Arches, Bryce Canyon, Canyonlands, Capitol Reef, and Zion. It’s no surprise that US News and World Report selected Utah’s capital city as the 10th greatest place to live in the country.
- Foreign USA
- CNBC – Top States for Business
- Tax Foundation
- Census Bureau
- Square Up
- Fora Financial
- Salt Lake Chamber
- Small Business Administration