Illinois Small Business Statistics
Written by Dmytro Kondratiev
Editor, lawyer
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Featuring multiple industry clusters, the Prairie State is a global hub of economic diversity. It hosts 34 Fortune 500 companies including Boeing and Motorola. With a $1.024 trillion GDP, Illinois is the fifth-strongest economy in the nation.
While international giants certainly lead the state economy, the small business pool greatly contributes to the gross domestic product as well.
Despite the financial troubles Illinois has faced in recent years, small enterprises (SMEs) still have a high survival rate and earn the living for most residents, with nearly 45% of the total state workforce employed in privately owned companies.
One more interesting fact is that Prairie State appeals not only to domestic but also to foreign entrepreneurs and investors. So, we’ll cast a quick look at the state small business statistics to help you better understand your entrepreneurial opportunities here.
Key Illinois Small Business Stats
- Illinois accounts for 1.2 million SMEs making up 99.6% of all enterprises in the state;
- There are over 2.5 million people employed in SMEs;
- The state boasts the second-fastest business formation rate in the nation;
- Over 21.000 SMEs are engaged in state export generating around $14 billion in export which is 23% of the total export;
- In 2019, SMEs brought over 20.000 net new jobs to the labor market;
- According to the Bureau of Labor Statistics, 61% of new jobs are generated by companies with fewer than 50 employees;
- In 2018-2019, 91% of new jobs were created by newly-formed SME’s showing a confident trend for the state’s economic recovery;
- SBA reports that professional, scientific, and technical services account for the highest number of SMEs, with 169.000 enterprises engaged in this sector;
- Meanwhile, the biggest SME employer is the health care and social assistance sector, with 350.657 employees in it;
- The utility industry featuring fewer than 500 companies is the least active on the SME economic landscape in IL;
- Illinois is one of the US states that were severely hit by pandemic challenges, with the unemployment rate jumping from 3.5% to a historic high of 14.5%;
- JP Morgan Chase survey showed that in 2020, revenues of small companies in IL have reduced dramatically during the first weeks of the COVID-19 lockdown;
- Despite the economic struggles, the average income of IL residents is $63.000, which is the highest individual income rate across the US, leaving even New York behind;
- Meanwhile, the annual median income of self-employed smaller entrepreneurs is around $53.000;
The Illinois Department of Commerce has determined the most promising industries for upcoming business growth:
- Advanced manufacturing;
- Transportation and logistics;
- Business and professional services;
- Energy;
- Biotechnology;
- Agriculture and food processing.
Top 10 Industries for Small Businesses in IL
| Industry | Company Count |
|---|---|
| Professional, scientific, and technical services | 169.025 |
| Transportation and warehousing | 161.385 |
| Other services (excluding public administration) | 144.101 |
| Construction | 120.409 |
| Healthcare and social services | 109.328 |
| Real estate, rental, and leasing | 107.923 |
| Administrative, support, and waste management | 99.644 |
| Retail trade | 92.804 |
| Entertainment and recreation | 59.478 |
| Finance and Insurance | 41.545 |
IL Small Business Demographics
- Women own 454.362 SMEs, with 80% of them being non-employers;
- Men own 687.819 SMEs, with 532.000 of them being non-employer businesses;
- 48.000 companies are owned by women and men together;
- Female employees account for 47.6% of the total workforce;
- Veterans control 4.7% of SMEs and make up 3.7% of IL employees accordingly;
- Following the US Census data, the racial split in IL small enterprise ownership is as follows:
- White Americans - 62.2%;
- Hispanic Americans - 16.4%;
- Black or African Americans - 14.3%;
- Asian Americans - 5.1%;
- Native Hawaiians and Islanders - 0.04%.
- Self-employed minorities account for 152.706 SMEs demonstrating business diversity in the state.
IL Small Business Formation
- Fiscal turmoil makes Illinois a challenging business environment, yet, the industrial diversity, advanced technological background, and quality workforce still offer great chances for new establishments to succeed;
- To start an LLC in Illinois, you should file the Articles of Organization with the state and pay a $75 filing fee;
- To keep your company in good standing with the state and in compliance with LLC laws and regulations, you’ll have to appoint a registered agent in Illinois and pay an annual report fee of $250;
- An individual income tax rate valid for pass-through LLC owners is 4.95%;
- A corporate income tax rate of 9.5% keeps the state at the higher end of the cost range;
- The IL sales tax for commercial market operators is 6.25%;
- The state has no requirement for a general business license, while the normal cost for other typical licenses varies from $20 to $100;
- With an average wage rate of $8.25 per hour, Illinois somewhat lags behind the top US economies where that rate hits $10 or even $15 limits.