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Fun fact - Louisiana, aka the Pelican State, owing to the brown pelican being the state bird, is the only place in the country that boasts parishes rather than counties. Many people recognize Louisiana for its commercial crawfish farming.
After all, it produces an average of 100 million pounds yearly, generating over $300 million annually! 90% of the global crawfish supply is from this state! Moreover, this industry employs thousands of farmers and greatly contributes to the high employment rate in the state.
Besides crawfish farming, Louisiana also depends on other major economic activities, including manufacturing, real estate, healthcare, and agriculture. Let’s cover some of the unique economic aspects of this state.
Key Louisiana Small Business Stats
99.5% of the businesses operating in Louisiana are classified as small businesses. According to 2021 statistics, a whopping 464,527 businesses fell into this category;
SMEs employ 53.6% of the workforce in Louisiana! At least 906,632 people gain employment in small businesses from an active workforce that boasts 1,602,400 jobs;
SMEs contribute greatly to the employment rate in the state. Between 2019 and 2020, 9,453 of the 9,651 companies opened were small businesses. During this period, Louisiana witnessed an additional 25,499 employment expansion;
Louisiana benefited from 160,864 job openings between 2019 and 2020, owing to new and expanding businesses;
Of these, SMEs accounted for 138,115 jobs, making them significant employers in the state;
SMEs employing fewer than 20 employees had the highest employee gains in the period, while those hiring 100 to 499 employees had a slower uptake;
The SMEs in Louisiana make up 1.44% of the total small businesses in the United States;
At least 42,673 SMEs in the state do not have employees, while 10,151 boast 1-19 employees;
Self-employed SME owners running incorporated businesses had a median income of $46,877 in 2018. For those running unincorporated entities, the median income was $22,793;
The state helps SME owners find footing via the Small and Emerging Business Development (SEBD). Not only does this initiative equip company owners with managerial skills, but it also helps them overcome growth and expansion challenges;
Between 2019 and 2020, large banks issued a whopping $4 billion in loans to SMEs that needed $1 million or less;
In the same period, the banks processed more than $1.3 billion in loans to SMEs generating $1 million or less. $1.2 billion of this share was issued to businesses that needed loans amounting to $100,000 or less;
The construction industry accounts for 48,133 of the SMEs in Louisiana. Other major industries represented in the SME sector are:
Number of Companies
Healthcare and social assistance
Administrative, support, & waste management
Professional, scientific, and technical services
SMEs accounted for 32% of Louisiana exports, worth over $56.4 billion in 2019. These 3,808 SMEs comprised 84.80% of the total exporters, accruing over $18.10 billion;
The management sector is one of the smallest industries in the state, with 303 firms in operation.
Per the Louisiana Small Business Administration definition, an SME makes anything from $1 million to >$40 million a year. Moreover, small businesses can have as few as 0 to 1,500 employees;
SMEs with 20 to 99 employees make up the largest employers in the sector;
The Fair Labor Standards Act in Louisiana dictates that the federal minimum wage stands at $7.25 an hour. It was last revised in 2008 when it was increased by $0.70 from $6.55;
Healthcare and social assistance made up the biggest employer in the SME sector. 157,741 people (52.7% of total employment in the healthcare sector) found gainful employment from the 9,708 SMEs in the industry.
Between 2016 and 2020, the number of SMEs in the state rose from 427,290 to 457,636.
Louisiana Small Business Formation
Entrepreneurs own SMEs in various forms, including sole proprietorships, partnerships, and LLCs. The business registration process is fairly simple;
Opening an LLC in Louisiana requires you to file Articles of Organization with the state. It costs $100, a non-refundable fee that establishes your business as a legal entity capable of suing and being sued;
LLCs can be single or multi-member in Louisiana. It is possible to own an LLC even if you are the sole member;
Entrepreneurs can form partnerships in Louisiana, allowing them to share the business profits and losses. You can register a partnership by filing a partnership registration form with the state for $100;
LLC owners must designate a registered agent to act as the go-between for them and the state. This person or company should receive all communique, be available during office hours, and have an address in Louisiana;
Doing business in the state is subject to a corporate franchise tax and a corporate income tax. Not abiding by these taxes can result in the loss of one’s entity and penalties and fines.
Small Business Demographics
136,350 out of the 464,527 SMEs in Louisiana are owned by minority groups;
Women own 45.8% of businesses and account for 48.7% of the workforce;
Veterans account for 5.2% of the workforce and own 7.6% of SMEs;
Racial minorities comprise 34.1% of the workforce and own 27.3% of SMEs.
Louisiana remains one of the best states to start a business. Not only does it have a thriving community of small business owners, but the state offers a range of incentives to support new entrants.