Alaska is the largest US state by land mass and the 7th largest sub national division in the world after the state of Queensland in Australia. The state has a population of 738,432 which is 4 times the combined population of Northern Canada and Greenland.
It has the 4th highest per capita income in the US (behind Connecticut, New York, Massachusetts and the District of Columbia) despite being one of the smallest state economies. This is due to a diverse economy that’s dominated by fishing, natural gas, and oil, all of which it has in abundance.
Small businesses (SMBs) form the backbone of Alaska’s economy and the federal government has moved in to assist them by issuing tax subsidies to help these businesses and boost the economy. But still, SMBs have continued to be plagued by high operating costs (including shipping) and finding qualified employees.
Below is a list of small business statistics from the state of Alaska:
- There are 73,298 small businesses. That’s 99.1% of all Alaska businesses.
- In 2019, small businesses received 111 SBA (Small Business Administration) loans. $65,000,000 in total. This was to assist SMB owners to build their businesses and boost the economy.
- Family and friends toppled lending institutions as the number one source of capital funding for young entrepreneurs and startups.
- 137,271 individuals are employed by small businesses in the state. That’s 52.4% of all Alaska employees.
- During a recent survey by Alaska SBDC, 25% of survey respondents identified operational costs including shipping costs as a major barrier to doing business. Other challenges include sourcing funding, finding qualified employees and the economy.
- Capital funding between 500,000-1,000,000 fell from 17% in 2018 to 8% in 2019. While funding under $50,000 increased by 12%.
- Self-employed individuals running their own incorporated businesses have an average median income of $60,000. Those with unincorporated businesses have an average median income of $32,000.
- Alaska state law requires that every new Alaska LLC designates an Alaska registered agent that will be available during regular business hours at a physical address within the state.
- Firms employing fewer than 20 people added 2,621 new jobs in 2019. Firms employing 20 – 99 employees lost 339 net jobs in the same year.
- Employees in the healthcare and social assistance sectors account for 53.5% of the private workforce in the same sectors.
- To form an LLC in Alaska, you are required to submit your Articles of Organisation to the Alaska Department of Commerce along with a $250 filing fee.
- Alaska has a corporate income tax but does not have any franchise or privilege tax generally applicable to businesses. It also has no personal income tax.
- SMBs in the agriculture, forestry, and fishing and hunting sectors account for 95.7% of the private workforce in the same sector. 514 out of 540.
- The utility industry is the smallest in the state with a total of 84 small firms operating in it.
- To support the state economy, as a result of Covid 19, the Governor’s office has suspended new and renewable business licenses.
- There are 587 SMBs in the export business which generate 53.3% of Alaska’s $4.6 billion in total export revenue.
- Corporations are subject to a corporate income tax that varies according to their incomes. From 0% on less than $25,000 of taxable income, to 9.4% on $222,000 of taxable income.