1. California has the largest economy of any state in the U.S. and would, by itself, make up the 6th largest economy in the world when competing with other countries.
2. There are 3.9 million small businesses operating in the state of California.
3. That’s a notable number because it constitutes 99.8% of all business in the Golden State.
4. According to the latest estimates, California small businesses employ 7.0 million people, which makes up 48.8% of all employees in the state.
5. Since about one in ten U.S. residents are Californians, that means almost 1 in 20 people in the country are employed by a small business in CA!
6. Included in those totals are an estimated new net 283,452 jobs annually.
7. Within that definition of “total net jobs” comes a lot of hiring but also job losses. In fact, if we look at just one period as a sample – Q3 of 2016 – California saw 47,250 new businesses start up, hiring 135,472 new workers. However, during the same time, 34,630 businesses downsized to one or no workers, forfeiting107,257 jobs.
8. California also has the most diverse business climate in the United States, including with 1.6 million minority-owned enterprises.
9. In fact, for every 100 small business in California,
- 5 are owned and operated by women,
- 10 are owned and operated by minorities, and
- 13 are owned and operated by military Veterans.
10. In recent years, California’s small business growth mirrored that of the overall United States, with:
- 2015 +4.4%
- 2016 +3.3%
- 2017 +3.4%
11. Unemployment is also down in California compared to ten or even five years ago. The CA unemployment rates is now approximately 4.2%, which is down slightly from 4.4% in January of 2018 (compared to a national rate of 4.1%) and 5.2% in January of 2017. This leads to high credit scores in California since more people that work means more people can pay their credit card debt on time.
12. While California’s small business climate is thriving across the board, there are three unique advantages for California businesses and residents:
- Unique industry sectors of tech (Silicon Valley) and the movies/showbiz (Hollywood) bring in tens of thousands of high-paying jobs.
- California’s strong economic recovery since the Great Recession has created a favorable environment for entrepreneurs, niche businesses, and small business owners.
- California’s large population and upper-economic strata residents encourage a wide range of goods and services.
13. By far, the largest share of small businesses is those with fewer than 100 employees.
14. Owning a small business has a lot of rewards but getting rich quickly and effortlessly isn’t one of them. In fact, the median income for self-employed individuals in California who have incorporated a business entity is only $57,420. For self-employed individuals who hadn’t incorporated, that median income number fell to $25,034.
15. Exporting is one sector that’s particularly abundant in California, with a total of 73,528 companies in CA exporting goods as of 2015. Of that total, 95.7% of them – or 70,350 – were small business, bringing in 43.2% of California’s total $152.1 billion total export revenue.
16. Small enterprises exist in every sector and niche of California business. In fact, even in the utilities market, traditionally dominated by only a couple of mega firms, small businesses make an appearance in CA. There are actually more than 2,000 active small businesses within the utilities sector.
17. Here are other notable industries with the percentage of small businesses in that segment:
- 83% Construction
- 74.6% Agriculture
- 71.1% Real Estate and Housing
- 63.2% Accommodation and Food Services
- 47.3% Healthcare and Social Assistance
- 53.3% Manufacturing
- 50.3% Arts, Entertainment, and Recreation
- 33.1% Finance and Insurance
- 8.2% Utilities
18. If we look at just the total number of people employed, these small business sectors stand out:
- 661,287 Professional, Scientific, and Technical Services
- 365,496 Real Estate and Housing
- 360,353 Healthcare and Social Assistance
- 305,470 Retail
- 290,654 Construction
- 260,206 Transportation and Warehousing
- 232,553 Arts, Entertainment, and Recreation
19. Although small businesses routinely thrive in California, there are still many struggles and challenges for business owners. In fact, CNBC ranked the state only 28th in its 2017 list of America’s Top States for Business list. In the same poll, California was ranked an abysmal 48th for Cost of Living and 49th for Cost of Doing Business. Business owners cite high taxes, a high minimum wage, medical, insurance and other employee requirements, and red tape as the biggest challenges to growth.
20. But, while there is room to improve, there’s no denying that small businesses are an integral part of California’s economy!Share