The economy of the Tar Heel State is rather driven by big cities while rural areas struggle with recession due to bigger companies moving to cheaper labor markets beyond the US and closing their local sites.
At the same time, lower tax rates and business costs along with a favorable regulatory environment and an accessible qualified workforce consistently bring North Carolina to the top positions in multiple economic ratings.
And in 2022, government efforts aimed at further business climate improvement made the state No.1 in
America’s Best State for Business rating by CNBC. So the state is still an attraction for many businessmen-to-be, and the smaller enterprise sector stands strong.
Look at small enterprise (SME) statistics for North Carolina to understand how the state economy functions and where your future business opportunities lie.
Key North Carolina Small Business Stats Statista reports $541 billion for North Carolina’s GDP in 2021 making 2.80% of the national GDP; Financial services, real estate, rental and leasing, and utility sectors are the biggest contributors to the gross domestic product of the state; The state is actively engaged in international trade and boasts $29.2 billion in export, 22.5% are generated by SMEs; There are 964.280 small businesses in NC making around 3% of the total SME count in the US and 99.6% of the total business count in the state; The sectors that feature the biggest number of SMEs in NC are other services and professional, scientific, and technical services, each of them accounting for 125.511 and 120.826 firms accordingly; Meanwhile, mining, quarrying, and oil and gas sectors are the least attractive for smaller private firms, with only 276 SMEs operating in them; SMEs employ 1.7 million workers in the state totaling 45.1% of the state workforce; Over 80% of SMEs in NC are non-employer entities; Around 15% of SMEs in the state are companies with 1 to 19 employees; The highest SME employment rates are in health care and social services and accommodation and food service sectors, with 254.032 and 267.832 workers engaged in them accordingly; Despite the pandemic crisis and economic stagnation, in 2021, North Carolina showed a 29% increase in SME formation as compared to the previous period; Following the business formation surge, there was a 2.16% annual job gain growth; With a minimum hourly wage of $7.25, the state hits the federal minimum; The average salary rate in NC revealed by the Paychex Report for 2022 is $30.88 per hour demonstrating a 5% 12-month growth; While registered SMEs have an average annual income of $50.000 in NC, non-registered entities earn only $22.000 a year; The NC unemployment rate has decreased from 4.50% in 2021 to 3.50% in 2022. Top 10 Industries for NC Small Business
Industry Company Count Other services (excluding public administration) 125.511 Professional, scientific, and technical services 120.826 Construction 116.863 Administrative, support, and waste management 101.586 Real estate, rental, and leasing 94.968 Retail trade 84.826 Healthcare and social services 72.605 Transportation and warehousing 60.500 Entertainment and recreation 46.071 Educational services 28.494 NC Small Business Demographics Female-owned businesses in NC total 358.783, of which 33.783 companies have employees; Male-owned companies number 506.417, and 102.417 of them are employer entities; Nearly 42.000 SMEs are equally possessed by women and men; According to Census Bureau data, ladies account for 47.9% of employees in the state private sector; Veterans control 8.4% of SMEs in NC and represent 6.3% of the private workforce; There are 61.838 immigrant SME owners in North Carolina, and 12% of them are self-employed; The Hispanic ethnic group has a 6.2% share of SMEs in NC and makes up 9% of the total workforce; Other racial minorities own 19.3% of smaller private companies and represent 29.1% of manpower in this business sector. NC Small Business Formation Since registered company owners tend to earn more, many entrepreneurs gravitate to establishing an LLC in North Carolina when starting their business in the state; Registering an LLC is as easy as filing the Articles of Organization with the state that costs $125 and as fast as 5 to 7 workdays; All LLCs are required to appoint and maintain a registered agent in North Carolina with a physical address in the state and ready to receive and handle your mail during normal business hours; The NC individual income tax rate is 5.25%. It’s valid for standard LLCs that are taxed as disregarded entities and their income taxes are paid by their owners under the personal tax rate; The corporate tax rate is the lowest in the nation. At 2.5%, it’s twice or even several times lower than valid rates in other states; The state has an annual reporting requirement for LLCs and corporations and imposes a $200 filing fee; With no general business license requirement in place at a state level, NC local licensing rules vary by county and municipality; The state sales tax rate in North Carolina is 4.75%. However, it will be further bumped up by a 2.25% local tax applied in all NC counties. References North Carolina Small Business Economic Profile 2021 North Carolina Second in Nation for Small Business Growth How Many Small Businesses Are There in North Carolina? The State of North Carolina’s Small Business During Covid-19 Pandemic