PROVIDENCE – Looks like the smallest state is a good place for the smallest businesses.
A new research report found that Rhode Island has led the nation in growth of micro-businesses – those with fewer than five employees. Such businesses grew by 17.7% from 2016 through 2018, according to the report from Invoice2ego, an invoicing app for small businesses used by more than 250,000 companies each year.
Rhode Island ranked first in growth rate, based on average year-over-year increase in total dollar amounted invoiced. Researchers reviewed a sample set of 31,000 users of the app over the three-year period for the “U.S. Micro Business Snapshot” report, released late Thursday.
New England, overall, seems like a favorable place for micro-businesses, as the six-state region placed three states in the top 10.
Hawaii was second with a growth rate of 15.35% and Idaho was just a shade behind in third at 15.32%. Iowa was fourth at 13.6%; and Alabama fifth at 12.4%. Rounding out the top 10 were Oregon at 12.1%; Massachusetts at 12%; Colorado at 11.8%; Maine at 11.5%; and Utah at 11%. Arkansas posted the worst decline in the nation [minus 3%].
Among the top five industries for micro-businesses nationwide, outdoor services (landscaping, gardening, pest control) posted the highest growth rate at 10.85%. That was followed by construction (general contracting, remodeling, roofing) at 9.8%; home and building maintenance (cleaning, painting, pool care) at 8.8%; consulting (marketing, property services, business counseling) at 7.3%; and accommodation and food services (catering, bakery, bed and breakfast) at 6.4%.
In addition, the report included some potentially troubling national findings for micro-businesses. In the first quarter of 2019, such businesses showed signs of declining revenue growth, continuing a downward trend since 2017. Less than 30% nationwide said they plan to hire new employees or add any subcontractors this year, according to the report.
“Small business…is truly the backbone of the U.S. economy,” Invoice2go CEO Greg Waldorf said in a statement with the report. “And from what we’re seeing in our own users’ invoicing activity, it’s hard to deny some clear signs pointing toward a downturn, if not a possible recession on the horizon.”
Scott Blake is a PBN staff writer. Email him at Blake@PBN.com
