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Heavily hit by the economic crisis back in 2008, Michigan has successfully risen from its knees and shows consistent economic growth. In CNBC’s Top States for Business 2022 list, the Mitten States ranks 16th for staying strong in such aspects as:
Access to capital;
Lower business costs;
One of the most vital indicators of recovery from the 2008 recession is a rapid growth in small enterprises (SMEs) that now feel confident about their business perspectives and are a solid driving force of the state economy.
Here are some exciting statistics facts to help you get an overview of the Michigan economic landscape.
According to Statista, the state has the 14 largest GDP in the US, at $473.33 billion;
As of 2021, there are 902.131 SMEs in the state making up 99.6% of total MI businesses;
SMEs generate nearly 22% of the $53.4 billion export in the state, with the most popular export goods being dairy products, corn, soybeans, and electrical equipment components;
The biggest number of SMEs are engaged in the sector of other services, with 118.739 private companies in it. Around 20.000 of them are private firms with up to 20 employees;
The utility sector is one with the smallest SME number of only 320 entities;
SMEs employ 1.9 million workers representing 48.3% of the total workforce in the state;
279.680 employees are engaged in health care and social services making up over 45% of the total private manpower in this industry;
In 2021, SMEs with fewer than 50 employees generated around 170.000 new jobs, and the state hit a 23-year record in job creation;
Non-registered business owners earn around $23.000 a year while self-employed owners of registered companies earn about $51.000 on average;
The minimum hourly wage in Michigan is $9.87 while the average rate is around $25 resulting in a $50.000 average annual income.
Top 10 Industries for Small Businesses in MI
Other services (excluding public administration)
Professional, scientific, and technical services
Real estate, rental, and leasing
Healthcare and social services
Administrative, support, and waste management
Transportation and warehousing
Entertainment and recreation
Accommodation and food services
MI Small Business Maintenance
To support unprecedented SME growth, further boost the state economic indicators, and attract new business players to the local market, in 2022, governor Whitner has launched a $2.1 billion financial initiative;
$500 million were distributed to support restaurants, cafes, and other micro-companies within the MI Mainstreet program;
$200 million were meant to create more welcoming conditions for tech startups to generate more jobs;
$400 million were allocated to finance MI Business Grants;
$100 million were provided via the Small Business Restart program to aid private place-based enterprises;
The governor also initiated and implemented 23 economic relief programs to help employer enterprises regain their growth pace and keep jobs after the pandemic drop.
MI Small Business Demographics
Ladies own 332.223 SMEs which equals 43.2% of all MI SMEs, and only 10% of those are employer entities;
Gents control 487.494 private companies, and nearly 25% of them are employers;
37.849 SMEs are owned by men and women equally;
Female employees account for 47.7% of the total workforce in the state;
Veterans represent a 5.9% share in the total SME count and a 4.2% share in the state workforce;
When it comes to a racial split in SME ownership, there are the following foreign entrepreneurs in the state (based on US Census data):
Black/African Americans: 95.613;
American Indians and Alaska Natives: 2.322;
Hawaiians and Islanders: 219.
MI Small Business Formation
In 2021, there were 150.000 new business applications in MI, which is 59% more than in 2019;
After the COVID-19 hit, new business formations in MI surged to an average of 13.500 applications a month as compared to 6.000 - 8.000 within a 2004-2019 period;
With limited liability companies prevailing among SMEs, establishing an LLC in Michigan is simply about filing the company statute with the state and settling a $50 registration fee;
To keep up with essential state requirements, remember to maintain a registered agent in Michigan and file a state report annually that costs $25 or $75 depending on the type of LLC;
As an owner or co-owner of a pass-through LLC, you’ll be exposed to a 4.5% income tax charged over your part of LLC profit;
A flat corporate income tax rate in the state is 6%;
SMEs that qualify for the alternative corporate income tax credit pay the tax at a 1.8% rate;
With no requirement for a state-level general license, average fees for local permits and licenses vary from $150 to $3000;
A sales tax rate in the state hits the midground at 6%.