Arkansas is the 33rd most populous and 29th largest US state. The state’s economy is primarily based on agriculture which contributes $16 billion to the state economy. Rice is currently the largest export commodity, the state produces half of all the rice consumed in the U.S.
The Bear state is also home to large Fortune 500 corporations like Walmart, Tyson Foods, JB Hunt and the US headquarters of French aeroplane manufacturer, Dassault. According to a recent CNBC survey, Arkansas ranks 1st in the country in the cost of doing business, 2nd in the cost of living, 50th in the quality of life, 40th in business friendliness and 36th in access to capital.
Although the state hosts various multinational corporations, a vast majority of companies are small businesses (SMBs). They account for more than half of Arkansas’ labor force and have a significant impact on the state’s economy.
Here’s a list of statistics about Arkansas’ small businesses:
- Arkansas is home to 255,004 small businesses making up 99.3% of all businesses in the state.
- There are 490,680 SMBs, representing 47.6% of the state’s entire workforce.
- The average median income for self-employed individuals running their own incorporated businesses is $48,000. Those with unincorporated businesses have a median income of $22,000.
- There are 1,780 small business exporters in Arkansas that account for 18.7% of the state’s $5.5 billion worth of export revenue.
- If you are planning to open a business under a fictitious name, you’ll need to file a DBA (Doing Business As) document with the county clerk’s office in the county where the business will be located. There is an average $25 fee for filing this document.
- Sole proprietorships or single-member LLCs are not required to have an Employer Identification Number (EIN). Instead, the business uses its Social Security Number (SSN) for identification.
- For out-of-state sales, businesses only need to pay sales tax if they have the nexus sales tax in other states. Nexus is simply a connection between the taxing authority and an entity that must collect or pay the tax.
- State law requires that every new Arkansas LLC designates an Arkansas registered agent that will be available during regular business hours at a physical address within the state.
- There are stock corporations in Arkansas, that is, business entities that issue shares of stock to shareholders (also known as stockholders) to raise capital and there is a 0.3% franchise tax on the value of the corporation’s outstanding stock with a minimum tax of $150.
- The corporate income tax ranges from 1% on $3,000 of net income to $5,440 on amounts exceeding $100,000 plus 6.5% of the amount over $100,000.
- SMBs generated 10,171 new jobs in 2019. Firms with fewer than 20 employees created 7,175 jobs while those with 100-400 employees added 652 jobs.
- Small Businesses in the health and social services sectors account for 49.5% of the entire private workforce in these sectors, a total of 88,839 employees out of the 179,424 in private employment.
- There are 34,126 small businesses in the construction industry representing 13.4% of all businesses. It is one of the largest industries in the state.
- The utilities industry is the smallest in the state with 242 SMBs currently working in it. It represents 0.09% of all businesses.
- In the fourth quarter of 2018, 5,174 jobs were lost after 1,859 SMBs exited the market. In the same period, 2,128 firms started up giving rise to 5,927 new jobs.