The Commonwealth of Kentucky is well known for its exceptional farming conditions. Its calcium-rich soil (particularly in the Bluegrass region) has made the state popular for horse breeding, cattle and goat breeding, corn production and winemaking. The Bluegrass state accounts for 95% of the world’s bourbon whiskey production.
Kentucky also has a large manufacturing industry. Some of the most popular car models in the US like the Toyota Camry, Chevrolet Corvette and the Ford F-Series are assembled in the state. In the fourth quarter of 2019, the economy grew at an annual rate of 2.3%, which was faster than the overall US growth rate of 2.1%.
Small businesses (SMEs) are also a crucial part of the state economy as they make up a sizable portion of all private financial entities in Kentucky. Through the Kentucky Cabinet for Economic Development, the state has partnered with entrepreneurs to offer them export grants, tax credits and capital funding to help them establish a foothold in the business world.
Here are some interesting small business statistics from the state of Kentucky:
- There are 355,998 small businesses in Kentucky, approximately 99.3% of all businesses in the state.
- 712,427 people are employed by small firms representing 43.8% of all workers in the state.
- Startups in Kentucky have a survival rate of 79.8%.
- More than 630 small firms that have been severely affected by the Covid-19 pandemic have received over $20 million in grants since July 2020. There is also a low-interest loan program available for small business owners.
- Self-employed individuals with incorporated businesses have an average median income of $49,000 which is $27,000 more than those with unincorporated businesses.
- In 2018, while reporting under the Community Reinvestment Act, Kentucky’s lending institutions gave out 58,098 loans under $100,000 with a cumulative value of $852.2 million.
- There are 3,736 small business exporters in Kentucky that are responsible for 12.1% of the state’s $30.3 billion worth of export revenue.
- State law requires that every new Kentucky LLC designates a Kentucky registered agent that will be available during regular business hours at a physical address within the state.
- The top five industries with the largest share of small business employees in the state are:
- Accommodation and food services (105,825).
- Health care and social assistance (104,847).
- Retail trade (76,398).
- Manufacturing (74,318).
- Construction (63,213).
- 2,675 businesses started up in the fourth quarter of 2018 generating 9,610 net jobs. In the same period, 2,359 businesses closed down resulting in 7,852 jobs lost.
- Kentucky has a Limited Liability Entity Tax (LLET) that varies depending on the business’s annual gross receipts. Gross receipts less than $3 million have a minimum LLET of $175 while businesses with gross receipts of more than $ 3million have a LLET that’s less than 9.5 ¢ per $100 of gross receipts or 75 ¢ per $100 of gross receipts.
- If your small business has hired at least one new full-time employee and invested in qualifying equipment, you could be eligible for a tax credit.
- Kentucky corporations are subject to both corporate income tax and the aforementioned LLET.
- Over 20% of small business owners say their sales levels during the Christmas season in 2020 were less than half of what they were before the Covid-19 pandemic.
- The top five industries with the largest number of small businesses are:
- Construction (46,246).
- Retail Trade (37,861).
- Professional, Scientific, and Technical Services (37,160).
- Real Estate and Rental and Leasing (32,621).
- Administrative, Support, and Waste Management (31,373).
- The utility industry is the smallest in the state with only 213 small businesses currently working in it.