Tennessee’s quality craftmanship, powerful workforce, and pro-business regulatory environment have created some powerful brands. Add to these the advantage of having the lowest state tax burdens in the U.S., and it’s no wonder that Tennessee’s famous products include everything from whiskey to M&Ms, and from La-Z-Boy to vehicles.
Bordering eight states, Tennessee’s cities all offer opportunities for businesses to thrive across several sectors, including retail, tourism, entertainment, and its dominant healthcare industry. Besides its 2,600+ advanced manufacturing industries with 153,000+ employees, Tennessee is home to over 620,000 small businesses employing 1.1 million people.
Other 6 Interesting Tennessee Business Statistics
Agriculture remains one of the state’s important industries bringing in close to $4 billion in annual revenue, but here are some other interesting business statistics from Tennessee.
1. Robust Environment for Business
Thanks to a pro-business culture, some of the most critical corporate relocations to Tennessee include Oracle, FedEx, and Mitsubishi. Several factors have contributed to its robust pro-business environment, including its right-to-work and absence of personal income tax.
Furthermore, Tennessee supports businesses and its workforce through solid investments in education, infrastructure, workforce development, and business relations globally.
Business and living costs remain stable across the state, including within its prime business cities of Nashville, Memphis, Chattanooga, and Knoxville.
2. Straightforward and Affordable Business Formation
The more than 620,000 small businesses in Tennessee comprise 99.5% of the private enterprises and employ approximately 42.5% of the workforce. Considering the ease of LLC formation Tennessee, it is no wonder that small businesses have become the most vital contributor to the state’s coffers.
The two most important steps to creating an LLC are choosing a registered agent with a physical address in the state and filing an Articles of Organization online or by mail with the Tennessee Secretary of State. Forming an LLC costs $50 per LLC member. However, there is a minimum payment of $300 and a maximum of $3,000 for the fee.
Businesses in the state are not required to create an Operating Agreement, but good business practice dictates the necessity of having the agreement on hand for future reference.
Small Business Opportunities
Accommodation and food services represent the largest share of small business employees, followed by health care, social assistance, and retail. The largest number of small businesses are in the other services sector, which excludes public administration. After that, the construction industry has the second largest presence, followed by professional, scientific and technical services.
Hub for Transportation and Logistics
Geographical location played a major role in the decision for FedEx’s relocation. Knoxville is within a day’s drive from about three-quarters of the population of the United States. Its easy reach by air, rail, and road means this state has a booming tourist industry thanks to its fertile soil, wildlife, famous singers, Graceland, and the Great Smoky Mountains National Park.
This easy accessibility, including by barge, ensures powerful industries like Nissan, Duracell, Pringles Kellogs, Duracell, and GE refrigerators have a solid presence in Tennessee.
3. Low Cost of Living
Real estate remains relatively cheap in Tennessee and helps reduce living and business costs. The cost of living average metrics for the U.S range at 100, whereas Nashville sits at 95, Chattanooga at 92, and Memphis and Knoxville are both below 85.
Furthermore, office rentals are significantly cheaper than New York’s average of $80/square foot, with the most expensive being in Nashville at $34.
4. Favorable Taxes
Tennessee’s 6.5% corporate income tax and low state and local taxes make it relatively affordable and reduce financial red tape for businesses. In addition, the only companies not responsible for the excise tax are sole proprietorships and general partnerships. The Tax Foundation shows that Tennessee has the lowest state and local taxes per capita.
Small Business Export Revenue
Over 6,000 small businesses in Tennessee contribute $30.4 billion to their export revenue, amounting to 14.5% of their international distributions.
Final Take
Tennessee might not match other states with lower corporate tax rates, but it has several pros, thanks to its location. Besides having an excellent bond rating and the lowest state debt per capita, Tennessee’s continued policies to create an even friendlier business environment are paying off. These include its meaningful steps toward workforce development, public education, and extending its environmental reach.
