Entrepreneurs / Small Business  January 16, 2024

Study: Colorado 5th for highest proportion of small businesses

A recent study has ranked Colorado fifth among U.S. states for the highest proportion of small businesses.

Colorado ranked just behind Florida, New York, Wyoming and Montana, according to the study released by Qrfy.com, a business QR-code generating company based in Barcelona, Spain.

Qrfy analyzed public data from the U,S. Census Bureau to find the percentage of registered businesses with fewer than five employees for each state throughout 2021. These results were then ranked to determine which states had the highest percentage of small businesses compared with every other registered business. Colorado came fifth, with 60.93% of all businesses being classified as small businesses. Out of 179,827 total registered establishments at the end of 2021, 109,570 establishments had fewer than five employees. The annual payroll for all small businesses across Colorado was $10,66 billion, with an average of $97,340.34 per small business.

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Florida ranked first with 64% of all firms being classified as small businesses. New York was second with 62.7%, Wyoming was third at 61.83%, and Montana was fourth at 61.54%.

Tennessee ranked last in the study, with only 49.19% of all businesses having fewer than five registered employees.

“It is interesting to see the extent to which smaller businesses contribute to the overall number of businesses in each state, especially when they are competing with far larger companies in the same industries,” said Marc Porcar, Qrfy’s CEO, in a prepared statement. “These figures are also from the end of the COVID-19 lockdown period, which may have influenced people to start their own small businesses while working from home.”

He said a possible explanation could be higher costs of living, which may encourage people to be more entrepreneurial in order to make a living.

Dallas Heltzell
With BizWest since 2012 and in Colorado since 1979, Dallas worked at the Longmont Times-Call, Colorado Springs Gazette, Denver Post and Public News Service. A Missouri native and Mizzou School of Journalism grad, Dallas started as a sports writer and outdoor columnist at the St. Charles (Mo.) Banner-News, then went to the St. Louis Post-Dispatch before fleeing the heat and humidity for the Rockies. He especially loves covering our mountain communities.
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