A new report by New York State Comptroller Thomas DiNapoli ranks New York as running behind other states when it comes to small businesses. According to the report, recently released data from the U.S. Census Bureau indicate there were 422,137 small businesses, those with fewer than 500 employees, operating across New York in 2023, comprising 98.9% of all businesses in the state.
About 80.8% of all New York businesses employed less than 10 workers. Small businesses in New York employed a total of 3.7 million people, close to 45% of the state’s jobs. However, that was fewer than in California, which had 7.3 million small business employees, Texas with 5.1 million small business employees and Florida with 3.7 million. Small business employees in New York earned an average of $60,579 in annual pay in 2023. Small businesses generated $999.65 billion in sales, shipments and revenues in 2023, according to the data.
“Small businesses are the foundation of New York’s economy, stimulating economic activity in our cities and towns, spurring innovation across industries, providing a variety of employment opportunities, and enriching our communities,” DiNapoli said. “However, growth in small business jobs and new startups lags the rest of the nation. New challenges, like tariffs, have forced owners to make sacrifices and difficult choices. The state and local governments should continue to look for ways to support small businesses by easing their entry into markets and helping them thrive in New York.”
The report found that small business growth in New York has lagged what was going on in the rest of the country. Between 2001 and 2023, the number of small business firms grew 9.5% in New York compared with 14.2% in the rest of the nation, putting New York in 22nd place among the states for small business growth.
The report found that the Covid-19 pandemic hit New York’s small business economy particularly hard in 2020 and 2021, with a net decrease of 7,350 businesses in 2020 and 11,600 in 2021. In contrast, the net number of small businesses in the rest of the nation grew in both 2020 and 2021.
DiNapoli’s report cites a study by the National Federation of Independent Business that found the cost of health insurance and supplies ranked as the first and second most serious challenges for small businesses in New York and nationwide. Other challenges included state taxes on business income, unreasonable government regulations, and electricity costs.
DiNapoli’s report noted that in addition to regulations imposed by the state, local requirements can impact small businesses. Examples cited include a third of small businesses in New York City reporting having to wait six months or longer to open due to the various licenses, permits and waivers from as many as 15 different city agencies that must be obtained to operate.
The report underscored that New York has several programs intended to offer financial support to small businesses and highlighted the launch of EXPRESS NY (Expediting Processes and Regulations to Enable Streamlined Services), a new statewide effort to identify unnecessary, outdated or burdensome regulations that was included in Gov. Hochul’s 2027 Executive Budget.
“The state and localities should continue to examine ways to reduce barriers to small businesses to both ease their entry into markets and help them thrive in New York,” DiNapoli’s report concluded. “The state should also examine ways to make relevant technical assistance available to potential entrepreneurs. Supporting these engines of employment and opportunity will help New York’s future economic growth.”
