Pennsylvania is the sixth richest state in the US, with a gross domestic product of $813 billion.
In fact, if the state was a sovereign nation, it would be the 19th largest economy on Earth, coming in after Saudi Arabia.
Agriculture, manufacturing, and mining are the largest income earners for the Keystone State. Almost 70% of Pennsylvania's agricultural income is generated by livestock and livestock products such as beef, pork, eggs, and fungiculture products, such as mushrooms.
Chemicals are the leading manufactured products in Pennsylvania. Leading manufacturers of prescription drugs and over-the-counter medicine, namely Pfizer, Johnson & Johnson, and GlaxoSmithKline are located in the state.
Pennsylvania's unemployment rate stands at 3.9%, which is higher than the national rate of 3.7%. A low unemployment rate means the labor market is more competitive and skilled workers are more expensive to hire. This can be a major challenge, particularly for start-ups and small businesses (SMB) that may lack the financial muscle to hire highly qualified personnel.
Here is a list of interesting statistics on the state of small businesses in the Commonwealth of Pennsylvania:
- There are 1.1 million small businesses in Pennsylvania—99.6% of all businesses in the state.
- Small businesses that are clustered in and around Philadelphia can reach across the border into the crowded marketplaces of New York or New Jersey due to the geographical positioning of the eastern Pennsylvania city.
- There are 89,074 self-employed minorities who account for 8% of the state’s SMB ownership.
- The following industries have the highest number of small businesses working in them:
- Professional, scientific, and technical services — 146,960
- Other services (except public administration) — 141,576
- Construction — 118,575
- Retail trade — 108,222
- Real estate, rental, and leasing — 100,848
- There are 13,971 small firms in the export business and they account for 34.2% of Pennsylvania’s $37.6 billion worth of export revenue.
- Small firms employ a total of 2.5 million people. That’s 46.2% of the entire state’s labor force.
- State law requires that every new Pennsylvania LLC designates a Pennsylvania registered agent that will be available during regular business hours at a physical address within the state.
- In order to form a Pennsylvania LLC (limited liability company), you need to file your Certificate of Formation with the Corporation Bureau at the Department of State. The filing fee is $125.
- Sales taxes in Pennsylvania are imposed at a rate of 6%, while property taxes are relatively low at an average of 1.46% of property values.
- Pennsylvania imposes a flat 9.99% corporate tax rate and 3.07% individual tax rate.
- Three industries claim the largest share of small business employees:
- Health care and social assistance — 412,593
- Accommodation and food services — 306,221
- Manufacturing — 260,938
- Self-employed individuals who run their own incorporated businesses have an average median income of $52,000. Those with unincorporated businesses have an average median income of $27,000.
- The utilities sector is the smallest in the state in terms of small business engagement with just 739 small firms..
- Sales tax returns can be filed online with the Pennsylvania Department of Revenue, or by phone or mail. The state allows small businesses to keep 1% of collected sales tax revenue as compensation for the labor associated with compliance.
- In 2018, Pennsylvania banks issued 214,544 loans under $100,000 while reporting under the Community Reinvestment Act. The total value of the loans was $3.4 billion.
Sources:
- US SBA – State Small Business Profiles
- Startingyourbusiness.com
- Business News Daily
- Statista
- Sperling’s Best Places
