Small businesses are the backbone of the U.S. economy and have been for hundreds of years. Most businesses that are started begin with someone’s dream, their lifelong ambition to do something they are passionate about, which then evolves into a full-fledged small business.

Michigan is extremely familiar with small businesses, with the state having one of the highest numbers of small businesses in the U.S. However, Michigan still remains underappreciated for its small business and economic climate, and stability.

The Great Lakes State has been making significant contributions to the United States’ ever-growing economy, and with Michigan having the 14th largest GDP in the nation, it is tough to dispute this. But it’s not only the state’s impressive GDP and the number of small businesses that are the only economic supporters of Michigan.

There is an abundance of economic factors that come into play, for example, the state’s education system is brilliant, business and economic opportunity is clear for everybody to see, a large and competitive labor market helps with job growth and development, and access to large consumer markets.

Number of Small Businesses in Michigan

So, how many small businesses are there in Michigan? There are 886,557 small businesses in Michigan according to the latest figures (2020) from the SBA.

It is not just Americans and Michiganians starting small businesses in Michigan; the state also attracts international entrepreneurs and foreign families. There are 37,419 immigrant entrepreneurs in Michigan accounting for 9% of all self-employed Michigan residents.

The following bar graph shows the number of small businesses in Michigan in 2016, 2017, 2018, 2019, and 2020.

How many small businesses are there in Michigan

Of the 886,557 small businesses in Michigan in 2020, 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 886,000-plus small businesses in Michigan, it is fairly easy to register a business in Michigan.

To be a small business in Michigan, you have to qualify as one. So, to operate as a small business in Michigan, you must own a company with less than 500 employees.

Let’s take a deeper dive into the number of small businesses in Michigan by dissecting the state’s top industries, small business owners, employees, and more!

Latest Small Businesses Statistics in Michigan

  • Small businesses equate to over 99.6% of all businesses in Michigan.
  • There are 886,352 small business employees in Michigan, which is 49% of the states’ employees.
  • In 2019, Small Businesses in Michigan added 26,199 new jobs!
  • Small businesses employing 20-99 employees created the most job gains!
  • There are 69,149 self-employed minorities in Michigan demonstrating the diversity in the state.
  • International trade and exports in Michigan are strong, which is showcased by the 13,369 small business exporters.
  • There are more professional, scientific & technical services small businesses in Michigan than any other type – 105,395.
  • Construction firms make up the 2nd largest number of small businesses in Michigan – 96,167.

Top 5 small business industries in Michigan

How Many Small Businesses in Michigan?

Over 886,000 is a lot of small businesses to be registered in any one state. Compared to the rest of the U.S., it represents 2.8% of all U.S. businesses. There are 31.7 million small businesses in the U.S.

The number of small businesses in Michigan has been growing over the past several years.

  • In 2017 there were 866,196 small businesses, which increased to 870,301 in 2018 (0.47% increase).
  • In 2019 there were 873,722 small businesses which were 3,421 more than the state had in 2018 (0.39% increase).
  • From 2019 to 2020, the number of small businesses in Michigan rose again, to 886,557. This is the second-largest increase in percentage terms over the past five years (1.46%) and demonstrates Michigan’s strong, and progressive economy.

The Great Lakes State is an ideal place to begin your entrepreneurial journey for so many reasons. An important factor is the multitude of business help for startups to already established businesses. There are several development centers, advisories, and professional small business support systems provided for free in Michigan.

If you would like to download the latest 2020 Small Business Profile on Michigan from the U.S. Small Business Administration, Office of Advocacy, the Profile can be downloaded here.