Founder Data ReportTwo Thirds of Montana’s Private-Sector Jobs Are at Companies With Fewer Than 500 People. In Florida It Is Two Fifths.
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Every state claims to be a small-business state. The Census Bureau publishes the number that settles it, and the answer says less about local character than about how big the state’s economy is.
Across the United States, 62,250,556 of 135,748,407 private-sector jobs — 45.9% — are at firms with fewer than 500 employees. That average conceals a wide range: the share runs from 66.3% in Montana down to 39.6% in Florida, a spread of 26.7 points. But the ranking is not a league table of entrepreneurial spirit. Every one of the ten highest-ranking states has fewer than two million private-sector jobs, and seven of the ten largest state economies — which between them hold 54.5% of all private-sector jobs — sit below the national figure. Across all 51 jurisdictions the correlation between the size of a state’s economy and its small-business share is -0.73.
- 45.9% of U.S. private-sector jobs — 62,250,556 of 135,748,407 — are at firms with fewer than 500 employees.
- By state the share runs from 66.3% (Montana) to 39.6% (Florida), a 26.7-point spread.
- Not one of the ten highest-ranking states reaches two million private-sector jobs.
- Among the ten largest state economies the spread collapses to 8.1 points, and seven of the ten are below the national figure.
- Correlation between the size of a state’s economy and its small-business share: -0.73.
Forty-six of every hundred jobs in the country
The Census Bureau sorts every employer in the country by how many people the whole company employs nationally, then reports the jobs those companies hold in each state. Sorted that way, firms with fewer than 500 employees hold 62,250,556 private-sector jobs and firms with 500 or more hold 73,497,851. Counted in jobs rather than in companies, small business is the smaller of the two halves. Note what the size band is measuring: a hardware store in Bozeman owned by a 40,000-person chain counts in the 500-plus column, because the band is the company’s national headcount, not the size of the local workplace.
Drawn to scale across every private-sector job the Census Bureau attributes to an employer. Colour rule for this article: orange is the under-500 figure, slate the 500-plus figure. Of that under-500 group, 21,950,184 jobs — 16.2% of the national total — are at firms with fewer than twenty employees.
Source: U.S. Census Bureau, Statistics of U.S. Businesses 2022, national file us_state_naics_detailedsizes_2022.txt, employer firms by state and enterprise employment size, retrieved from the Census static dataset release and re-verified on September 15, 2026.
The ten states that lean hardest on small business
Montana tops the list: 66.3% of its private-sector jobs are at firms with fewer than 500 employees, twenty points above the national 45.9%. Wyoming and Vermont follow. The pattern in the top ten is hard to miss once you look at the job counts rather than the percentages. Eight of the ten hold fewer than a million private-sector jobs each; only Louisiana and Oregon clear that line, and neither reaches 1.7 million. Montana’s 66.3% is a share of 398,871 jobs. Florida’s 39.6% is a share of 9,628,867 — twenty-four times as many jobs, which is the reason the two states can sit at opposite ends of the same list.
Share of each state’s private-sector jobs at firms with fewer than 500 employees nationally. Bars run on a 0-100% scale. All ten are above the national 45.9%, so all ten are orange under this article’s colour rule — the length of the bar, not its colour, is the comparison. Combined private-sector employment of all ten: 6,368,618, about 4.7% of the national total.
Source: U.S. Census Bureau, Statistics of U.S. Businesses 2022, national file us_state_naics_detailedsizes_2022.txt, employer firms by state and enterprise employment size, retrieved from the Census static dataset release and re-verified on September 15, 2026.
And the ten that lean least
At the other end sits Florida at 39.6%, the only state under 40%. Tennessee follows at 41.5% and Georgia at 42.5%, with Arizona and Kentucky a rounding error apart at 42.6%. This is the half of the list where the large state economies cluster: Florida, Georgia, Illinois, Ohio and North Carolina are all in the bottom ten, and all five are in the country’s top ten by employment. The bottom ten hold 40,674,180 private-sector jobs between them — six and a half times the combined employment of the ten states in the previous chart.
Same measure and same 0-100% scale as the previous chart, lowest first. All ten sit below the national 45.9%. Florida is the only state in the country under 40%. Combined private-sector employment of these ten: 40,674,180.
Source: U.S. Census Bureau, Statistics of U.S. Businesses 2022, national file us_state_naics_detailedsizes_2022.txt, employer firms by state and enterprise employment size, retrieved from the Census static dataset release and re-verified on September 15, 2026.
Seven of the ten largest state economies sit below the national small-business share. Not one of the ten highest-ranking states reaches two million private-sector jobs.
Why the ranking is mostly a map of state size
Put the two observations together and the ranking starts to look like an artifact. A state’s small-business share falls as its economy grows, with a correlation of -0.73 across all 51 jurisdictions. That is not a judgement about anybody’s business culture. Large employers concentrate where there are enough people to staff them, and a state with 400,000 private-sector jobs has room for very few 500-plus-employee operations no matter how it feels about entrepreneurship. The clearest way to see it is to look only at the states where most Americans actually work.
A SUBSET, ranked by employment, not by the measure charted: these are the ten largest state economies, and the bars show the same under-500 job share as the two previous charts on the same 0-100% scale. The spread across these ten is 8.1 points against 26.7 points across all 51. California, New York and Michigan are the only three above the national 45.9%; the other seven are below it.
Source: U.S. Census Bureau, Statistics of U.S. Businesses 2022, national file us_state_naics_detailedsizes_2022.txt, employer firms by state and enterprise employment size, retrieved from the Census static dataset release and re-verified on September 15, 2026.
The practical reading for an owner is that your state’s rank is not a verdict on your market. What it does tell you is the composition of the payroll you are competing with for staff and for customers. In Montana two of every three private-sector paychecks are written by a company with fewer than 500 people. In Florida it is closer to two of every five, and the rest come from firms large enough to have a benefits department. Those are different hiring markets and different customer bases, and neither is a statement about which state is better at business.
Frequently Asked Questions
What share of U.S. jobs are at small businesses?
45.9% of U.S. private-sector jobs — 62,250,556 of 135,748,407 — are at firms with fewer than 500 employees, the standard federal small-business threshold. 16.2% are at firms with fewer than twenty employees. Figures are Census Bureau Statistics of U.S. Businesses for 2022.
Which state has the highest small-business share of jobs?
Montana, at 66.3% of private-sector jobs. Wyoming is second at 65.2% and Vermont third at 62.1%. All three are among the smallest state economies in the country.
Which state has the lowest?
Florida, at 39.6% — the only state below 40%. Tennessee is next at 41.5%, then Georgia at 42.5%. Arizona and Kentucky follow, a rounding error apart, and both read 42.6%.
Does a high small-business share mean a state is more entrepreneurial?
The data does not support that reading. The correlation between the size of a state's economy and its small-business share is -0.73: the bigger the economy, the lower the share. Every one of the ten highest-ranking states has fewer than two million private-sector jobs, while seven of the ten largest state economies fall below the national figure. A high share mostly reflects the absence of very large employers rather than the presence of unusual numbers of small ones.
Does this count companies headquartered in the state?
No. The size band is the company's total employment nationally, and the state is where the workplace sits — so a local branch of a national chain counts in that state's 500-plus column. Firm counts also cannot be added across states, because a company operating in two states is counted in both; that is why every figure here uses a jobs denominator, which does add to the national total exactly.
Published by The Lonely Entrepreneur — the community and coaching platform for entrepreneurs who are building alone. lonelyentrepreneur.com
This article is for educational purposes and is not a substitute for professional financial or legal advice.