Maryland Small Business Statistics

A leader in the tech workforce, Maryland is among the most educated states. And it’s no surprise since the state is home to 57 accredited colleges and universities including a world-known John Hopkins University, the University of Maryland, and Loyola University. 

As such, the Old Line State is greatly maintained by federal government investments welcoming onboard a few dozen of statutory agencies and scientific institutions such as the National Institute of Standard and Technology and Food and Drug Administration. 

In the meantime, special government programs and strong community support are aimed at nourishing a booming science sector and maintaining startuppers and beginner entrepreneurs to help their tech projects survive and thrive. 

Ranked 27th in CNBC's “Top States for Business” rating in 2022, Maryland has higher taxes and a quite expensive cost of living. However, access to a high-quality labor market and high per capita incomes attract small enterprises (SMEs) that are central to the state economy.

Key Maryland Small Business Stats

• According to Statista, Maryland’s GDP in 2021 was $364.24 billion. Up by 3% from 2020, it’s the 15th-highest gross domestic product in the nation;
• Under the Bank of America research, more than 62% of businesses have reported recovery from the pandemic crisis in 2021, hence the significant GDP growth;
• The biggest GDP feeders in 2021 are the government sector, finance and insurance, real estate, and professional and scientific services;
• In 2020, SMEs ensure $5.2 billion (47.3%) of the entire state export worth $10.9 billion. And small private exporters account for nearly 88% of all MD exporters;
• As of 2022, Maryland hosts 634.622 small enterprises making up 99.5% of all active businesses in the state;
• SMEs are the most active in the professional, scientific, and technical service sector, with over 100.000 companies operating there, which is no wonder taking into account the education level in the state;
• The mining, quarrying, and oil and gas extraction industry has the lowest number of SMEs, with only 109 private firms in it; 
• For the period from March 2020 to March 2021, there were 14.008 SME openings and 14.507 closings still showing a post-pandemic net loss of 499 entities;
• The employment market shrank by 114.754 jobs for the same period; 
• Following Census Bureau data, as of 2022, SMEs employ 1.2 million Maryland residents and secure 49.2% of the entire employment market in the state; 
• Healthcare and social assistance with 177.957 employees and the professional, scientific, and technical services with 158.234 employees are the two most active private employer sectors;
• Overall, about 18% of all SMEs in the state use hired workforce;
• In 2022, the minimum hourly wage in the state is $12.50, with a forecast growth to $14 in 2024 which is almost twice the federal minimum;
• An average hourly salary in the state is $19 and the top limit might hit $30 per hour;
• Self-employed owners of registered businesses have an average annual income of $60.000 while sole proprietorships earn $29.00;
• Despite the net job loss, the unemployment rate in the state is still low at 4% as per the Bureau of Labor Statistics.

MD Small Business Challenges

• Tourism is the MD economy’s sector that was hit by the COVID-19 pandemic the hardest, with a travel spending drop of 43%;
• The hotel industry was reduced by 42.631 jobs during the period of economic recession; 
• 88% of SME owners call inflation their biggest problem;
• 76% of private businessmen struggle with supply chain difficulties;
• 41% of smaller company owners face the lack of a qualified labor force;
• Though not impossible, early-stage funding is an issue for many startuppers and first-time entrepreneurs seeking investors for their projects. 

Top 10 Industries for Small Businesses in MD

MD Small Business Demographics

• Under a US Census Bureau report, men-owned SMEs in Maryland total 332.860 companies, and nearly 20% of them have employees;
• Ladies possess 243.668 private firms accounting for 44.3% of SMEs in the state, and only 10% of them use hired workforce;
• Companies co-owned by two gender groups number 21.531 which is around 3% of the total SME count, yet, more than half of them are employer entities;
• Female employees represent 49.2% of the work pool in the private sector;
• Military veterans control 6.7% of smaller firms and maintain a 6.1% share of workers in the state;
• Racial minorities own nearly 37% of SMEs in the Old Line State;
• The biggest ethnic group among smaller entrepreneurs is Black/African Americans holding a 25% share of the state SMEs;
• The second largest racial minority is Asians owning around 9% of smaller companies. 

MD Small Business Formation

• To launch a business under the roof of a legal entity, you can start an LLC in Maryland, which is as simple as registering the LLC statute with the state;
• The LLC filing fee in MD is $100, and setting up the corporation will cost the same;
• To stay compliant and keep up with your compulsory state requirements, you need to maintain a registered agent in Maryland and annually file a state report that entails a $300 fee;
• A corporate income tax in MD lingers at the higher end of the national rates at 8.25%. Though lower than in the most expensive state, it’s still quite a burden for a smaller private entity;
• Personal income taxes in the state appropriate for standard pass-through LLCs are levied within an eight-tier system and range from 2% to 6% depending on the amount of income;
• Commercial entities will be exposed to a sales tax of 6%. Note, though, that this flat state rate will be further increased by a local rate in your area.

References

1. Maryland Small Business Economic Profile 2022
2. Maryland Small Business Statistics (2022)
3. MD Small Businesses Can Rise to the Challenge
4. Guide to Starting a Business in Maryland