In recent years, the state of New Jersey has been very attractive to large investments, particularly from New York corporations seeking to shift here due to its business-friendly rates of taxation and great infrastructure.
This is in large part due to the growth of small businesses (SMBs), which are defined as companies with no more than 500 employees, and now form a vital pillar of New Jersey’s economy. This article will discuss six interesting business statistics concerning New Jersey that examine this concept in greater detail.
- High Percentage Of SMBs
As of 2021, nearly 940,000 small businesses are based in New Jersey – a figure which represents 99.6% of all businesses located here. SMBs form a vital part of the local economy, which the state has recognized and responded to by pouring investment into a number of programs to further assist in the growth and development of these businesses.
At this point in time, New Jersey is placed just outside of the top ten states for the number of SMBs (having achieved 11th place). This is particularly impressive considering New Jersey’s diminutive size as one of the top five smallest states in the U.S.
- Strong Finance Sector
Several key industries in New Jersey are powering this growth – finance being one of them. New Jersey is particularly strong in this area because of its proximate links to New York and its large population (despite its small size).
When speaking about finance, this term is used to describe a plethora of different industries, such as commercial and investment banking, accounting, and insurance (among others). In 2018 the financial sector recorded in excess of 221,000 employees, with the industry as a whole representing just over 6% of all New Jersey private jobs.
- Large Life Sciences Sector
Another vastly important sector in the state of New Jersey is life sciences – of which there are three main sub-categories: manufacture of medical technology, pharmaceuticals, and biotech R&D. According to data from 2019, over 2% of New Jersey workers in the private sector were employed in life sciences (or 76,000).
A key indicator of the strength of the life sciences industry in New Jersey is the number of large industry leaders based in this state. To name a few, pharmaceutical giants Johnson & Johnson, as well as Merck & Co. both chose to base themselves in New Jersey.
- Incorporating Pays
Incorporating refers to the process by which a business is registered and henceforth treated as a separate legal entity from its owners. In New Jersey, recent statistics have indicated that individuals running an incorporated business were taking home an average salary of almost $60,000. In direct contrast to this, those running unincorporated firms recorded a salary of over $20,000 less.
- An Environment Conducive For Business
Another good indicator for businesses based in New Jersey (or those considering basing themselves there) is the high consumer demand in the state. Recent data has revealed that New Jersey had one of the highest state increases in personal consumption expenditures in the U.S. (at 13.2%).
This is good for businesses because it represents a strong demand from consumers and a greater willingness to spend income.
- Small Business Exports
In 2019, the export industry in New Jersey was estimated to have transported goods valued at over $32 billion out of the state. Of the 20,000+ firms working in this sector, nearly 92% were reported to be SMBs, and they were responsible for over 40% of these reported exports.
Conclusion
Evidently, New Jersey is an attractive state for small businesses – not least due to the state’s existing dependence on them, or investment in pro-business programs, but also the strong demand of the state’s consumers. While small businesses from any industry will benefit from basing here, those working in life sciences and finance will be able to capitalize the most on this state’s benefits.
If you are interested in setting up your LLC New Jersey, make sure to refer to TRUiC’s article on the topic, as it provides a comprehensive overview on how to do so in the most straightforward and hassle-free manner.
Suggested Video on New Jersey LLC Formation:
