Wisconsin has enacted policies that promote emerging industries and enable small businesses to compete on a national and global scale. From a business-friendly tax structure and minority business funding to training grants and tort reform, Wisconsin is creating an environment that encourages investment and instills confidence in the future.
The Badger State understands the importance of fiscal responsibility in assisting small business owners in expanding their operations, as evidenced by a balanced budget and a fully funded pension system.
Here are a few small business statistics that shed light on Wisconsin’s entrepreneurial ecosystem.
Quick Wisconsin Small Business Statistics for Entrepreneurs
- Small businesses account for 99.4% of all Wisconsin private enterprises.
- 49% of Wisconsin employees work for small businesses.
- Military veterans make up 4.5% of workers and own 7.6% of businesses.
- Racial minorities own 11.2% of small businesses.
- Women account for 41.1% of small business ownership.
- The per capita disposable income in Wisconsin is $51,592 and the per capita consumption expenditure is $42,456.
- Between 1994 and 2018, Wisconsin small business employment grew by 15.6%.
- Small businesses exported goods worth $5.6 billion in 2019.
- Between March 2019 and March 2020, 14,650 Wisconsin businesses opened and 13,871 closed, resulting in a net increase of 779.
- Wisconsin’s business survival rate is 55.3% compared to the national rate of 50%.
Wisconsin Small Business Statistics
1. What is considered a small business in Wisconsin?
The Small Business Administration (SBA) defines a small business according to company size, that is, by firm revenue (ranging from $1 million to over $40 million) and employment (from 100 to over 1,500 employees).
A computer repair shop is classified as a small business if its annual revenue is $16.5 million or less. A candy factory, on the other hand, is considered a small business if it employs fewer than 750 people.
Wisconsin accounted for 70,392 of all new business applications filed nationwide (5.8 million) from January 2021 to January 2022, ranking 25th among states. Adjusting for population, Wisconsin had 1,209 applications for every 100,000 residents, which was lower than the national average and ranked 12th among states.
Starting a business in Wisconsin can be intimidating, especially if you’re a new entrepreneur. There is a long incorporating process that can get overwhelming. It’s advisable to employ an LLC (limited liability company) formation service. They’ll assist you with the registration process, leaving you more time to concentrate on business activities.
Read my review of the best LLC services in Wisconsin to find out more.
2. How many people are employed by small businesses in Wisconsin?
There are 1.3 million small business employees in Wisconsin who make up 49% of all employees in the state. Wisconsin’s minimum wage is the same as the federal minimum wage, which is currently $7.25 per hour.
Tipped employees can earn $2.33 per hour, while opportunity employees can earn $5.90 per hour. Opportunity employees are those under the age of 20 who’ve worked at their current employer for less than 90 days.
The state’s minimum wage was last raised in 2008, when it increased from $6.50 to $7.25.
3. Wisconsin small business statistics by industry
The professional, scientific, and technical services sector has the largest number of small businesses compared with other industries in Wisconsin, a total of 57,266. Approximately 47,119 of these businesses are nonemployer businesses, 9,232 have 1–19 employees, and another 915 have 20–499 employees on payroll.
The utilities industry has the least number of small businesses operating in them.
4. Wisconsin small business ownership by ethnicity
Wisconsin has a population of 5,895,908 people and has had yearly population growth of 0.2% over the five years leading up to 2019, placing it 31st out of the 50 states. White/Caucasian Americans are the majority, representing 87% of the state’s residents. Hispanic/Latinos are the second largest group at 7.1%, followed by Black/African Americans (6.7%), Asian Americans (3%), American Indians and Alaska Natives (1.2%), and Native Hawaiian and Other Pacific Islanders (0.1%).
The data below show how small business ownership is distributed among these ethnic groups:
- White/Caucasian — 410,863
- Black/African American — 16,578
- Hispanic/Latino — 11,732
- Asians — 11,739
- American Indian and Alaska Native — 1,417
- Native Hawaiian and Other Pacific Islander — 100
5. Wisconsin small business ownership by gender
There are 152,951 women-owned small enterprises in Wisconsin. Approximately 136,000 of these firms are nonemployer businesses and 16,951 have employees on their payrolls. Men own 259,071 small businesses, 198,000 of these have no employees, and 61,071 have employees. There are, however, 28,087 small enterprises in Wisconsin that are owned by both men and women.
6. Business taxes in Wisconsin
Most LLCs are pass-through tax entities when it comes to income taxes. In other words, the responsibility for paying federal income taxes is passed through the LLC to the individual LLC members. LLCs do not pay income taxes by default; only their members do.
However, in some cases, the owners of an LLC elect to have their business taxed as if it were a corporation. In this situation, the company must file a separate tax return. Corporation income is taxed in Wisconsin, as it is in almost every other state. However Wisconsin refers to this as a franchise tax, which is a flat 7.9% of net business earnings.
The Wisconsin Department of Revenue requires all business owners to stay in compliance with the state’s tax code. Failure to comply will result in serious legal consequences for your company. Fortunately, you can hire a registered agent to help you not only with the business formation process, but also with your tax compliance issues by sending constant notifications to remind you of impending filing deadlines and, in certain situations, even assist with the tax filing process.
Read my full review of the best registered agents in Wisconsin to find out which agent is good for your business.
7. Small business financing in Wisconsin
Large banks must report any new loans they provide to small businesses, according to aggregate statistics given by the Community Reinvestment Act (CRA). Congress passed the CRA in 1977 to encourage banks and other financial institutions to to serve the fiscal needs of the areas in which they are chartered, especially low- and moderate-income communities.
In 2019, reporting banks paid out $1.2 billion in loans to Wisconsin firms with less than $1 million in sales. Total reported new lending to firms through loans of $100,000 or less was $1.1 billion, while total reported new lending to businesses with loans of $1 million or less was $4 billion.
8. How COVID-19 affected small businesses in Wisconsin
Wisconsin has the 49th highest economic exposure to COVID-19 of all states in the US, based on the percentage of employees working in industries with a high or medium-high level of exposure to COVID-19.
In Wisconsin, 42% of all employees, or 1,369,668 people, work in industries with a high or medium-high level of economic exposure to COVID-19. Furthermore, 38% of all employees, or 1,240,492 people, work in industries with a low or medium-low level of economic exposure to COVID-19.
9. Wisconsin small business export statistics
In 2019, a total of 8,930 identified businesses exported goods worth $19.7 billion from Wisconsin. Small businesses accounted for 7,647 (or 85.6%) of those exporters and exported goods worth $5.6 billion, accounting for 28.3% of all exports by identified businesses.
The Final Word
Wisconsin’s ideal business climate is the result of a combination of factors, including a strategic location, a balanced budget, investments in education and training, a strong work ethic, and a focus on research and development. And, as a right-to-work state with a fully funded retirement program, ambitious entrepreneurs that set up a business in the state will thrive.
- Volume One
- Square Up
- Tax Foundation
- US Census Bureau
- Startup Info
- In Wisconsin
- US Small Business Administration