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For many of us, New Jersey evokes vacation memories and stands for the spectacular seashore, lovely scenery, entertainment, and cultural events that maintain and promote tourism. Something else that distinguishes it from other US states is its high quality of life.
One of the smallest states by area, the Garden State is among the most populated ones, with 8.8 million residents. With that, the state economy heavily relies on small enterprises (SMEs) and there are multiple government programs supporting new businesses.
Despite a smaller territory, New Jersey is the 11th among 50 states by the number of SMEs. To learn more interesting facts about small business statistics in the state, keep on reading our brief yet informative review.
Statista reports that the gross domestic product (GDP) in 2021 was $561 billion showing an impressive 5.6% growth as compared with the previous pandemic year;
There are over 937.000 SMEs in NJ making up 99.6% of all businesses in the state;
The most popular sector for SMEs is professional, scientific, and technical services, with nearly 150.000 smaller companies in it;
The sector with the fewest SMEs is the mining, quarrying, oil, and gas industry, with only 110small entities in it;
In 2019, small firms contributed $13.7 billion into a $32.3 billion state export;
SMEs account for 42% of the state exporters;
NJ has demonstrated a steady SME gain during the recent 5 years at a rate above 2% per year;
For the year 2021-2022, there were over 177.000 business applications registered in New Jersey out of nearly $5.8 million applications across the US placing the state at the 8th position by the entity formation rate;
SMEs employ 1.9 million of NJ workers accounting for nearly 50% of the total workforce;
The majority of SMEs (over 80%) in NJ are non-employers;
The minimum salary level in NJ has increased in 2022 to $13 per hour considerably exceeding the federal minimum;
The average annual income of non-incorporated businesses in NJ is $33.000 while that of registered entities is $58.000;
An average salary rate across the state as of 2022 is over $60.000;
According to CNBC, the unemployment rate in New Jersey ranked 7.2% in 2021 being higher than the national average.
Top 10 Industries for Small Businesses in NJ
Professional, scientific, and technical services
Real estate, rental, and leasing
Transportation and warehousing
Other services (excluding public administration)
Healthcare and social services
Administrative, support, and waste management
Entertainment and recreation
Accommodation and food services
NJ Small Business Demographics
Male ownership prevails among SMEs in NJ, with women possessing 300.130 entities or around 39% of all SMEs. Nearly 90% of those companies are non-employers;
Meanwhile, men control around 529.000 entities, with around 80% of them being non-employers;
Nearly 46.000 SMEs feature shared ownership, equally split between men and women;
When it comes to manpower, man and women match each other stride for stride, with females representing 47.3% of the total employee count in NJ;
Veteran-own businesses account for 4.2% of private firms while veterans make up only a bit more than 2% of the total workforce in the state;
Hispanics are the biggest ethnic group in NJ owning 14.2% of SMEs and representing over 20% of workers;
US Census data show that a few other racial minorities hold a 31% share of the NJ workforce while the SME ownership is shared as follows:
Black/African Americans: 82.136
American Indians and Alaska Natives: 1500
Native Hawaiian and Islanders: 632
NJ Small Business Formation
The small business gain in NJ as of the end of 2021 is nearly 30.000 entities as compared to 2020;
The majority of new establishments in the state use a limited liability company structure to make use of the benefits it offers to the full;
The state calls for LLCs to maintain a registered agent and file an annual report ($75) to stay compliant and legitimate;
New Jersey has neither a franchise tax nor a privilege tax in place, however, for pass-through LLCs, you’ll have to pay a tax over the profit distributed to you under your personal tax return;
Individual income tax rates in NJ are based on a multi-tier system. The minimum rate of 1.4% is valid for income below $20.000 and the maximum of 8.97% is charged over the income of $500.000 and higher;
Corporate income tax rates vary from 6.5% on the lower side to 11.5% on the higher side depending on the income level;
A sales tax in NJ is also capped at a higher point of 6.625% which is even higher than a 4% rate in neighboring New York;
NJ also has a property tax in place, and the rate is again the highest in the nation at 2.49%;
NJ ranks last out of 50 states featuring the least favorable tax climate.