According to the Bureau of Economic Analysis (BEA), the Pine tree state’s GDP has risen by $5 billion over the last decade (2010-2020), from $52 billion to $57 billion. Part of this growth has been fueled by the surge in the state’s industrial output which includes products such as paper, lumber and wood, electronic equipment, leather products, food products, textiles and bio-technology.
Naval shipbuilding is also a key part of the state economy with companies like Portsmouth Naval Shipyard ( builds submarines for the Navy) and Bath Iron Works (builds vessels for commercial and military use) investing heavily in the sector.
However, the major backbone for Maine’s economic growth is small businesses (SMBs). Entrepreneurship is as much a part of the culture as it is part of the economy. Local small firms are so ubiquitous that they make up close to 100% of all businesses in the state. Business owners cite fair regulations, access to working capital and strong community support as some of the appealing aspects the state has to offer.
Below are some interesting statistics on small businesses in the Pine Tree State:
- There are 149,355 SMBs representing 99.2% of all businesses in the state.
- According to the Kaufman Foundation Indicators of Entrepreneurship, Maine has 88.13% of total startups still thriving after one year, compared with 77.28% in New Hampshire, 78.82% in Vermont, and 82.74% in Massachusetts. This makes Maine number one in the country for the percentage of startups that are active after one year.
- There are 293,872 people employed by small businesses. They represent 57.2% of all employees in the state.
- Access to seed capital is quite easy. A large network of investors like the Maine Technology Institute and local banks partner with entrepreneurs to offer them loans and grants for startups or to expand their businesses.
- The average median income for self-employed people who run their own businesses is $49,000. That’s $23,000 more than those whose businesses are not incorporated.
- There are 1,610 small business exporters in Maine that account for 56.4% of the state’s $2.4 billion worth of revenue in total exports.
- State law requires that every Maine LLC designates a Maine registered agent that will be available during regular business hours at a physical address within the state.
- Maine is very welcoming for small businesses, it’s often referred to as ‘the state wide version of small-town Americana’. There is a large desire for local goods and services and an innate interest among Mainers in who the person behind the wheels of the business is.
- The top 5 industries with the largest share of small businesses are:
- Construction (22,431).
- Professional, Scientific, and Technical Services (17,369).
- Retail Trade (13,874).
- Real Estate and Rental and Leasing (13,753).
- Health Care and Social Assistance (10,520).
- To form a corporation in Maine, you need to file your Articles of Incorporation with the Secretary of State’s office. The filing fee is $145.
- Maine has a corporate income tax, but no franchise or privilege tax generally applicable to businesses. However, if income from your business passes through to you personally, that income will be subject to taxation on your personal state tax return.
- Below is a breakdown of Maine’s corporate income taxes:
- Adjusted federal taxable income up to $25,000 = 3.5% tax.
- Adjusted federal taxable income greater than $25,000 but not more than $75,000 = $875 plus 7.93% tax on amounts over $25,000.
- Adjusted federal taxable income greater than $75,000 but not more than $250,000 = $4,840 plus 8.33% tax on amounts over $75,000.
- Adjusted federal taxable income greater than $250,000 = $19,418 plus 8.93% on amounts over $250,000.
- In 2019, small businesses created 5,924 net jobs. Firms with fewer than 20 employees added 4,843 jobs while those with 100-499 employees generated 239 net jobs.
- Out of over 149,000 small business owners, only 3,777 are self-employed minorities.
- The top 3 industries with the largest number of small business employees are:
- Health care and social assistance (51,768).
- Accommodation and food services (42,938).
- Retail trade (36,950).