The Golden State of California has been regarded by many as America’s greatest economic contributor, boasting many fantastic qualities from a business and lifestyle perspective. Being one of the nation’s largest economic powerhouses, California has a lot of responsibility as a state, which is reflected in the abundance of thriving California businesses, both large and small.
The state of California and the California Secretary of state does a good job at providing a wide range of business incentives, grant programs, access to loans, and State Tax Incentives to all-sized businesses.
If you register a business in California, not only are you doing so in the most popular state that has an abundance of opportunities, but you can also benefit from the several programs and support networks that are offered. These include CalGOLD, California Department of Financial Protection and Innovation, California SCORE, California SBA, Go-Biz, and the California SBDC. Links to these helpful resources can be found at the bottom of the page.
California has produced some of the most talented and successful entrepreneurs over the years, who have influenced and shaped the state’s economy in an abundance of fantastic ways, and the state continues to produce noteworthy entrepreneurs on a regular basis.
The Golden State is the hub of the United States’ West Coast, with a plethora of booming consumer markets, tech hubs, importation/exportation access from land and sea, and proximity to helpful and economically beneficial states. So, it comes as little surprise to see so many businesses thriving within the state.
For all the business benefits that California entrepreneurs and business owners enjoy, there are some setbacks to California businesses, for example, the corporate income tax rate is considered to be pretty high, at a flat rate of 8.84%, with the addition of a progressive income tax rate ranging between 1%-12.3%.
The state is also a hotbed for small businesses, in fact, 99.8% of all California businesses are small businesses. While many states rely heavily on companies with a much larger employment share (500+), California doesn’t have to, with small businesses not only helping the states’ “go local” movement, by supporting local businesses, small business makes one of the largest contributions to the states’ economy. This demonstrates why California is a pro-small business state.
Additional Economic Facts about California
- California’s GDP is over $3 trillion and is the largest in the U.S.
- The state’s GDP growth rate between 2014-2019 was 3.8%.
- California’s GDP per capita was just over $72,000 in 2019.
- There are over 4.1 million small businesses in California.
- California has a progressive income tax rate that ranges between 1% – 12.3%.
- The base sales tax rate in California is 7.25%.
- California has the second-highest business climate rank out of all 50 states (US News & World Report).
- The minimum wage in California is $13.00 per hour (for businesses with less than 25 employees), and $14.00 per hour (for businesses with more than 26 employees).
- California’s economic activity ranks 3rd in the nation (WalletHub).
- The cost to register a new company in California is $75 for an LLC and $105 for an incorporated company.
- The average house price in California is $654,629.
- California has a brilliant education system with 42.9% of the population being college-educated.
- California also ranks 3rd for its higher education standards out of all 50 states.
- The Golden State has the 6th best internet access in the U.S.
- California’s corporate income tax rate is a flat 8.84%.
- There are 53 Fortune 500 companies in California.
- California’s business growth rate between 2014-2019 was 2.9%.
- California’s employment growth rate between 2014-2019 was 2.6%
- There are 24 different airports in California.
- California produces approximately 81% of the United States’ wine!
- Los Angeles is home to the two largest seaports in the US, making international trade a hotspot within the state.
- California sold $2.5 billion worth of marijuana in 2018.
- California is currently #1 in new business starts (Business.ca.gov).
California is the nation’s hotspot to many larger international companies and franchises, which in return contribute vastly to the state’s impressive economic strength.
What is the Largest Employer in California?
There are several colossal-sized international and national employers in California and some of them are as follows:
- The Walt Disney Company
- Taco Bell
- Kaiser Permanente
Many people decide on calling California their new home, and subsequent place of work for many valid reasons, with some contributing factors being business opportunity, employment opportunity, business environment, and quality of life unmatched by most other states.
Typical California facts include beautiful beaches, glorious landscapes, hot and sunny weather, and some of the most awesome cities in the nation, which are also contributing factors and why the Golden State is such a lucrative destination to live in.
What is California’s Main Economy?
Despite California’s constantly building reputation for being one of the best places for finance and tech, as well as other major industries, one of the most prominent and leading industries when looking at California’s main economy is Agriculture!
California currently leads the nation in the production of fruits, vegetables, wine, and nuts. Some of the state’s most valuable crops currently are cannabis, nuts, grapes, cotton, flowers, and oranges. The majority of U.S. wine is produced in the Golden State.
Here are some California crops and their capital generation in 2019:
- Dairy products, milk – $7.34 billion
- Almonds – $6.09 billion
- Grapes – $5.41 billion
- Cattle and Calves – $3.06 billion
- Strawberries – $2.22 billion
- Pistachios – $1.94 billion
- Lettuce – $1.82 billion
- Tomatoes – $1.17 billion
Business Facts About California
With the huge amount of diverse opportunities that are presented to aspiring entrepreneurs, business owners, and employees, California is one of the best places for business in the world, not just the United States which is evident in the state’s pro-business approach, and economic strength.
Despite already having one of the more stable U.S. economies, California’s economy is continuously growing with small businesses driving this growth. Small businesses in California account for over 13% of all U.S. small businesses! These small businesses (and large businesses) thrive within the state due to access to business resources, capital investments, free advisories, and the state’s access to large consumer markets.
How Powerful is California’s Economy?
California’s economic output is by far the most significant out of any other state in the U.S., with the state’s GDP reaching over $3 trillion in 2020, which represents over 14% of the United States’ total economy. The state with the second-most economic impact is the state of Texas.
To put things into perspective, if California was a country/nation, it would have the 5th largest economy in the entire world! California is also the most populous state in the U.S., with a population of almost 40 million. This large, built-in consumer base has greatly aided California’s economic power.
Here is a list of countries GDP’s with the inclusion of California if it were a country too (rounded to the nearest decimal):
- United States – $20.4 trillion
- China – $13.4 trillion
- Japan – $5 trillion
- Germany – $4 trillion
- California – $3 trillion
- United Kingdom – $2.8 trillion
- France – $2.7 trillion
- India – $2.7 trillion
- Italy – $2 trillion
- Brazil – $1.8 trillion
Here are some more Business Facts about California
- California is home to over 4,131,508 small businesses!
- Small businesses make up over 99.8% of California businesses.
- California is home to over 7.2 million small business employees.
- More than 48.5% of California employees work for small businesses.
- Healthcare, construction, and technology are the fastest growing industries within California presently.
- Most of the state’s business activity takes place in the cities of Los Angeles, San Diego, San Francisco, or San Jose.
- California’s unemployment rate sits at a respectable 4.3%.
- Los Angeles Intl Airport-Lax is the largest employer in the state, with over 45,000 current employees.
Resources on California’s economy and support you can get
Business and economic support programs:
- California Division of Financial Institutions
- California Franchise Tax Board
- SCORE California
- California Small Business Development Center