Small businesses are thriving across the U.S., but a new study by OnDeck reveals Arizona is one of the leading states for small business growth. Analyzing the latest U.S. Census data (2020-2021), researchers found Arizona has experienced a +4.32% increase in small businesses—the seventh-highest small business growth rate in the nation.

MORE NEWS: Here are the 50 biggest employers in Arizona

Small businesses are a big deal in America — and their share of the economic landscape is expanding.

Companies with fewer than 500 employees have created more than 70% of new jobs since 2019, according to the Treasury, and now account for 51% of private employment in America. In 2024, there are 50% more new business applications per month than in 2019. There are more self-employed women than ever and near-record highs of Black, Asian and Hispanic entrepreneurs.

“Every time someone starts a new small business, it’s an act of hope and confidence in our economy,” says President Joe Biden, while the press has credited the Biden-Harris Administration’s Investing in America Agenda for this bold moment in American entrepreneurship.

But if new businesses are a sign of confidence, then confidence varies significantly from one part of the country to another — as OnDeck’s new study into the number of new small businesses in each state, county and metropolitan area demonstrates.

What We Did

We used Small Business Data from the U.S. Census to identify the states, metropolitan areas and counties across America with the highest percentage growth in the number of businesses with fewer than 500 employees according to the latest available figures (2020–2021).

Key Findings

  • Idaho is the state where small businesses are growing the fastest, with a +6.55% increase year-on-year.
  • The metropolitan area with the greatest increase in small businesses year on year is LaGrange, Georgia (+19.85%).
  • Sheridan County, Wyoming, is the county where small businesses are thriving the most (+21.51% year-on-year).

Idaho is the State with the Biggest Small Business Growth

We found that Idaho saw an increase in 2,776 small businesses between 2020–21, an increase of 6.55% — making it America’s healthiest state for small businesses. This followed a quarter-century growth trend in which small business employment grew by 48.7%, exceeding the national rate, according to the U.S. Small Business Administration.

Idaho has the eighth lowest labor costs. The state benefits from a moderate employment market where people have money to spend, but there is enough job competition for Idaho’s small businesses to avoid the recruitment nightmares other regions have faced in recent years.