The United States has always been regarded as the land of opportunity. Small businesses have been the backbone of the U.S. economy for many years. Most businesses that are started begin with someone’s dream, a lifelong ambition, which then turns into a small business.
California is certainly no stranger to small businesses; in fact, it ranks 1st in the U.S. for the most number of small businesses in the state by a country mile.
The Golden State is considered to be America’s economic foundation. Over the past several years, it has been consistently voted as one of the top states for business due to the government’s pro-business approach, the largest civilian workforce in the country, high quality of life, and lofty salaries, especially when compared with the metrics throughout the rest of the U.S.
Number of Small Businesses in California
So, how many small businesses are there in California? There are 4,242,612 (4.2 million) small businesses in California, according to the latest figures (2022) from the SBA.
It is not just Americans and Californians starting small businesses in California; the state is a huge draw for international entrepreneurs. In 2021, there were 1,887,558 immigrant entrepreneurs in California.
The following bar graph shows the number of small businesses in California in 2018, 2019, 2020, 2021, and 2022.
Of the 4.2 million small businesses in California in 2022, there is a wide array of different enterprises from small, one-person sole proprietorships or LLCs to much larger businesses with several hundred employees. If you want to join the 4.2 million+ small businesses in California, it is fairly easy to register a business in California.
To be a small business in California, you have to qualify as one. Classification for a small business in California is a company with less than 500 employees.
Let’s take a deeper dive into the number of small businesses in California by looking at the top industry employers, the number of jobs added, how many export businesses there are, and more!
Small Businesses in California 2022 overview:
- Small businesses equate to over 99.8% of all businesses in California.
- There are 7,433,443 small business employees in California, which is 47.9% of the state’s employees.
- Small businesses employing fewer than 20 employees created the most job gains!
- There are over 1.4 million self-employed minorities in California demonstrating the diversity in the state.
- International trade is huge for many businesses, and there are 63,416 small business exporters in California.
- There are more professional, scientific & technical service small businesses in California than any other type – 705,099.
- Transportation and Warehousing firms make up the 2nd largest number of small businesses in California – 452,974.
How Many Small Businesses in California?
Over 4.2 million is a lot of small businesses to be registered in any one state, however, California is by far the largest, boasting an economy larger than the entire United Kingdom! When compared with the rest of the U.S., the total number of small businesses in California represents 12.7% of all U.S. businesses. There are a total of 33,185,550 million small businesses in the U.S.
We hope this information is useful for those that may be interested in starting a company in California, marketing your company to other small businesses in the Golden State, or expanding your business in the state.
There is so much California has to offer employers and employees alike, with an abundance of resources and help for companies and entrepreneurs to either kick-start or help develop and expand small businesses. So many people move to California every year due to its brilliant infrastructure, access to some of the biggest consumer markets in the world, international access by land, sea, and air, a good import/export market, and access to many skilled and highly educated workers.
If you would like to download the latest 2022 Small Business Profile on California from the U.S. Small Business Administration, Office of Advocacy, the Profile can be downloaded here.