Connecticut Small Business Statistics

With a total area of 5.567 sq. miles, Connecticut stands on the smaller side by the territory. In fact, it’s the third-smallest state in the US. At the same time, though, a population of over $3.6 million residents makes it one of the most densely populated territories nationwide.

Once resting on manufacturing, today, the economy of the Constitution State relies on services, health, and tourist sectors. Insurance, finance, and real estate are the industries that have recently shown dramatic growth and are at the core of the state economy.

Home to such corporate giants as Xerox, G.T.E. Uniroyal, Champion International, Olin, and Union Carbide, the state is no stranger to small enterprises (SMEs) too. Though rated 24th in CNBC’s “America’s Top States for Business” report, Connecticut boasts the highest per capita income and average household income across the nation.

This makes it attractive for SMEs despite relatively high living costs and operational business expenses.

To get a clear vision of the state's economic environment and spot your opportunities in the Connecticut business landscape, take a quick look at the interesting statistical facts on the SMEs in the state.

Key Connecticut Small Business Stats

• Under the IBISWorld report for 2022, Connecticut's GDP is $250.2 billion showing a very slight 0.2% growth against 2021;
• However, the annualized GDP growth rate from the 5-year perspective is 1.8%;
• The biggest GDP contributors are such industries as health and medical insurance, life insurance and annuities, and aircraft, engine, and parts manufacturing that have brought $81.6, $68.4, and $52.7 billion accordingly;
• In 2020, small enterprises exported products for $5.8 billion ensuring 45% of total state exports and accounting for 88% of exporters;
• Based on the CT Data survey, Connecticut has been showing consistent 5% growth of business registrations up to 2021. However, in 2021, the state demonstrated a remarkable 20% growth against 2020;
• The biggest number of registered entities emerged in the construction, real estate, retail trade, and professional service sectors;
• As of 2022, small companies in CT total 360.127 maintaining 99.4% of entrepreneurial activity statewide;
• The industries with the highest SME count are professional, scientific, and technical services and real estate featuring 56.285 and 40.312 firms accordingly;
• The least popular SME industries are mining, quarrying, and oil and gas extraction, with only 96 companies in them;
• While most of the SMEs across the state are non-employer entities, around 17% of private firms have from 1 to 19 employees and 3% are bigger companies with 20 to 499 workers;
• All in all, CT small enterprises employ 741.920 workers in the state accounting for 48.2% of the total labor force;
• The highest employment rates are traditionally observed in healthcare and social service and accommodation and food service industries, each engaging 144.051 and 101.644 Nutmeggers respectively;
• The minimum hourly wage in CT is $13 hitting high above the national average of $7.25;
• The average hourly wage rate in the state lingers at $20 resulting in a $41.268 average annual salary;
• Unregistered CT business owners earn around $31.786 a year on average, which is a noticeably higher income than in many other states. Meanwhile, self-employed owners of registered companies have an annual income of $60.584;
• The unemployment rate in the state is 4%, which is slightly above the federal minimum of 3.7%.

Top 10 Industries for CT Small Businesses

CT Small Business Demographics

• 40.8% of smaller companies in Connecticut are owned by ladies and 9% of those are employer entities;
• Gents possess 201.797 SMEs and over 22% of them ensure jobs for hired personnel;
• Smaller enterprises with the ownership equally split between male and female owners make up only 0.5% of the total smaller business count in the state;
• Female workers account for 48.3% of the entire workforce across the state;
• Veterans represent 3.8% of the private manpower and maintain a 5.2% share in SME ownership;
• The entire state population reported by Census Bureau is 3.605.597 residents, 80% of which are white Americans;
• The largest ethnic groups are Hispanics (16.9%) and Black Americans (12.2%);
• Immigrant business owners control over 22% of the total SME count in the state and ensure 37.4% of the entire labor force;
• Hispanics are the leading group among racial minorities, with the immigrant SME ownership split as follows:
  • Hispanics: 31.067;
  • Black Americans: 23.500;
  • Asians: 17.960;
  • American Indians and Alaska Natives: 500;
  • Hawaiians and Islanders: 168.

CT Small Business Formation

• To start and maintain a registered legal entity in the state, you are required to designate a Connecticut registered agent that will be your company’s official representative;
• To establish a Connecticut LLC or corporation, you’ll have to register your company’s statute with the state and pay a $120 filing fee;
• Registered entities in CT should submit an annual report with the state that costs $20;
• The state has a graduated system for personal income tax rates applied to standard pass-through LLCs. Thus, the rates vary from 3% to 6.99% depending on the amount of taxable income and the filing status;
• A corporate income tax is levied under a flat rate of 7.5%;
• While a 6.35% state sales tax rate in CT is not the highest in the nation, it’s on the higher end of the range;
• At the same time, a higher state rate is set off by the absence of local sales taxes in the state resulting in an average of 6.35% sales tax;
• Overall, Connecticut ranks 47th out of 50 states by the tax system.

References

1. Small Business Statistics (2022)
2. Connecticut Small Business Economic Profile 2022
3. Business Registration Increase by 20% in 2021
4. How Many Small Businesses Are There in Connecticut?