Connecticut is the fourth most densely populated, the 29th most populous and the third smallest of the fifty states. It also has the highest per capita income and the highest median household income in the US.
Finance, real estate and insurance are the largest industries in the state. It has a long history of hosting the financial services industry, including insurance companies in Hartford and hedge funds in Fairfield County. According to a 2017 survey by Phoenix Marketing International, Connecticut had the third largest number of millionaires per capita in the United States, with a ratio of 7.75%.
This is good news for small businesses (SMBs) since the per capita income is so high in certain areas that people hold more disposable income which means more patronage for small firms. However, it’s not all rosy for SMBs as they have to withstand a wide array of high taxes and expensive real estate. This expands overhead costs in terms of employee compensation and rent.
Here are some statistics on small businesses in the state of Connecticut:
- There are 350,376 small businesses. That’s 99.4% of all businesses in the state.
- There are 5,057 small business exporters in Connecticut. They account for 33.1% of the state’s $16.4 billion worth of revenue from total exports.
- 745,085 individuals are employed by SMBs representing 42.5% of all employees in the state.
- There are 43,867 self-employed minorities in Connecticut.
- Small businesses with fewer than 20 employees added 1,588 net jobs in 2019. Firms with 100 – 499 employees experienced the largest losses with 1,331 jobs lost.
- The state’s labor force has been growing on an annual basis but so has the unemployment rate which now stands at 5.7%. Small businesses have taken advantage of this trend through the selective hiring of highly-qualified individuals due to competition for vacant positions.
- State law requires that every new Connecticut LLC designates a Connecticut registered agent that will be available during regular business hours at a physical address within the state.
- Self-employed individuals running their own incorporated businesses have an average median income of $60,584. Those with unincorporated businesses have a median income of $31,786.
- Connecticut has high taxation rates which makes it difficult for most entrepreneurs to turn a profit. There is a six-tier progressive tax that tops out at 6.99%, a 6.35% sales tax, a flat corporate income tax of 9% and a property tax that varies from county to county.
- SMBs in the healthcare and social assistance sectors have the largest share of employees with a total of 147,103 out of the statewide SMB workforce of 743,085.
- In order to form an LLC (Limited Liability Company) in Connecticut, you need to submit your Articles of Organization together with a $125 filing fee to the Secretary of State’s office. This can be done by mail or online.
- The mining, quarrying, oil and gas extraction sectors have the smallest number of SMBs compared to other industries with a total of 113 small firms.
- Connecticut is close to large metropolitan areas like New York and Boston. This gives businesses the advantage of working near a dense, urban area. For instance, a flight from Hartford C.T to New York city takes only two and a half hours.
- LLCs are required by the state to file their annual reports by the end of the anniversary month of the LLC’s formation. The report forms are sent automatically to the business’s mailing address. The current annual report filing fee is $20.