According to the latest Michigan business data released by Governor Whitmer, small businesses in Michigan continue to drive economic growth and innovation in the state. His announcement said the 150,000 business applications received in 2021 constituted the fastest small business growth rate in 23 years.
The state remains committed to assisting small business growth and recently received approval of funding to the value of $243 million State Small Business Credit from the U.S. Treasury.
6 Interesting Michigan Business Statistics
After several years of economic hardships that nearly bankrupted one of Michigan’s leading employers, General Motors, the state has recently started to enjoy an upswing. Several factors led to this, including its education system, stability, persistent small business owners, and its position with access to large consumer markets.
1. Small Businesses Drive Michigan’s Economy
The state boasts 900,000 small businesses, employing 1.9 million people or 49% of the workforce. Interestingly, small businesses make up 99.6% of firms in the state, and over 9% of self-employed Michigan residents are immigrant entrepreneurs.
Exports from 13,369 small businesses generate 22% of Michigan’s exports or $53.4 billion annually. Besides agricultural products, the exports include electrical equipment, components, and appliances.
2. Competitive Business and Living Costs
Denver and other Michigan cities have surplus office space, meaning that startups can find affordable rentals. Furthermore, the state’s cost of living is currently 10% below the U.S. national average, making it the fourth most affordable state.
It costs 17.3% more to live in Chicago, 39% more in Seattle, and 62% more in San Francisco than in Denver. Additionally, housing in Denver costs 56% less than in Seattle.
3. Easy Michigan LLC Formation Processes
Most small businesses opt for a limited liability company (LLC) in Michigan because of the limited liability offered to its members. LLC formation Michigan requires filing the Articles of Incorporation (form CSCL/CD – 700) with the Corporations Division of the Michigan Department of Licensing and Regulatory Affairs. There is a $50 filing fee, and the process takes up to 5 business days. Expedited processing costs more.
You can file a “doing business as” (DBA) at the cost of $25 with the state and $10 with the county.
Every new Michigan LLC must designate a Michigan registered agent that will receive legal and other official correspondence during regular business hours at a physical address in the state. Most business owners prefer to hire a registered agent service, but they can appoint themselves or someone within the LLC.
Business permits are issued annually by the state and, depending on the industry, cost from $150 to $1,000.
4. Low Tax Rates
Michigan has one of the lowest company income tax rates in the U.S. at 6%. If a small business qualifies for the alternative credit under the CIT, it pays 1.8%, while those that don’t pay a 4.95% business income tax and 0.8% gross receipt tax. The state sales tax is 6%, and there is a 4.25% flat rate for personal income tax.
5. Highly Skilled Workforce
Ranked as the first state for its concentration of engineers and commercial and industrial designers, Michigan has attracted several major industries and investments. These include a collaborative partnership between the state and Ford. It also has a 250,000-strong skilled trades workforce and exciting growth in tech and cybersecurity jobs.
Just this year, GM announced an investment of $7 billion. LG Energy Solutions also announced its expansion from Holland with a $1.7 billion investment. Detroit is also transforming the Michigan Central Train Station into a massive hub for affordable housing, small business opportunities, innovation, entrepreneurship, community engagements, sustainability, and mobility innovation.
6. Incredible Access to Markets
The ideally located state is within 500 miles of just about half of the U.S. and Canadian populations. Add to this the 44 active deep ports surrounding Michigan and its location on four of the five great lakes, and you can understand its unmatched access to markets.
Michigan’s Ambassador Bridge is the U.S.’s most active border crossing with Canada, ensuring over $700 billion in annual trade.
Last Thoughts
Looking at these 6 interesting business statistics about Michigan, it is evident that the state and private initiatives have contributed to its remarkable comeback. Recent investments and developments show that the state has vast potential for small businesses and more prominent industries.
