Before the Great Depression, the Ocean State was a textile industry giant. In fact, Rhode Island is the birthplace of textile manufacturing in the US. However, after the 1929 fiscal crisis, most textile factories relocated to the southern US states leaving abandoned factories behind, most of which are now renovated apartments, offices, museums and low-income, elderly, housing units.
Today, Rhode Island’s economy is based on services and industry, particularly healthcare, education and manufacturing. A substantial number of submarines in the US nuclear fleet are manufactured in Rhode Island.
Small businesses (SMBs) are also a vital part of the Rhode Island economy. They employ over half of the state’s workforce. However, since the onset of the Covid-19 pandemic in 2020, many SMBs especially in the accommodation and food services sectors have been affected by lockdowns and were on the verge of closing down. The state government pledged $100 million in emergency financial support to help businesses with reopening, adaptation and fixed costs through direct grants.
Here are 15 interesting statistics on small businesses in Rhode Island:
- There are 103,986 small businesses that represent 98.9% of all businesses in Rhode Island.
- The top five industries with the highest number of small businesses are:
- Professional, Scientific, and Technical Services – 15,124.
- Other Services (except Public Administration) – 14,191.
- Construction – 11,510.
- Real Estate and Rental and Leasing – 10,969.
- Health Care and Social Assistance – 7,905.
- There are 1,635 small businesses in the export business that account for 60.5% of Rhode Island’s 2.2 billion worth of export revenue.
- Self-employed individuals who own their own incorporated businesses have an average median income of $54,000. Those without incorporated businesses bring in an average of $33,000 annually.
- To form a Rhode Island LLC (Limited Liability Company), you need to file your Articles of Organization with the Secretary of State’s office. The filing fee is $150.
- Rhode Island’s small businesses employ a total of 229,212 individuals – 52.6% of the state’s labor force.
- State law requires that every new Rhode Island LLC designates a Rhode Island registered agent that will be available during regular business hours at a physical address within the state.
- To form a corporation, you need to file your Articles of Incorporation with the Secretary of State’s office. The filing fee is $230 for companies with under 75,000,000 shares.
- As of 2018, the corporate income tax for C-corporations is imposed at a flat rate of 7%.
- The following industries have the largest share of small business employees:
- Health Care and Social Assistance – 42,022.
- Accommodation and Food Services – 37,054.
- Manufacturing – 23,346.
- Retail Trade – 18,050.
- Rhode Island S-corporations are required to pay the minimum business corporation tax (7%). Also, an individual S corporation shareholder will owe tax on his or her share of the corporation’s income.
- The state has a total of 7,154 self-employed minorities who represent 6.9% of all small business owners.
- In the fourth quarter of 2018, 814 small businesses closed down resulting in 2,384 lost jobs. In the same period, 1,010 businesses started up generating 2,812 jobs.
- In 2018, Rhode Island’s banks issued 21,364 loans under $100,000 while reporting under the Community Reinvestment Act. The total value of the loans was $295.3 million.
- SMBs created 3,186 net jobs in 2019. Firms employing fewer than 20 employees added 4,255 net jobs. Firms employing 100 to 499 employees lost 1,000 net jobs.