- In Georgia, 1 million small businesses employ 1.6 million residents.
- Georgia’s diverse geography and varied industries means businesses of all types can thrive in the state.
- Georgia has a highly competitive labor market due to its relatively low unemployment rate of 3.7%.
More than 1 million small businesses operate in Georgia. These businesses make up 99.6% of all businesses within the Peach State and employ 1.6 million of its residents, more than 43% of all Georgia employees. While Georgia is home to a wide range of big businesses – including The Home Depot, UPS and Coca-Cola – small businesses remain the backbone of its economy. With a vibrant startup scene and burgeoning tech industry, Georgia’s entrepreneurial community is growing rapidly.
Benefits of starting a business in Georgia
Economically, Georgia’s recovery from the 2008 recession has been slow but steady. In 2018, Georgia’s real gross domestic product (GDP) grew by 2.6%, lagging behind the national average growth rate of 2.9%. Still, the Georgian economy remains relatively healthy as the ninth largest in the U.S., worth nearly $600 billion annually. Georgia’s unemployment rate has steadily declined since 2011, recently reaching 3.7%. Low unemployment rates coupled with an emerging technology sector have resulted in a labor crunch, especially for technically skilled positions.
The Georgian entrepreneurs and advisors we spoke with were largely optimistic about the future of doing business in Georgia, frequently citing a business-friendly climate as well as supportive communities and local governments. Many referenced the tight labor market, which is a challenge for businesses throughout the U.S. as unemployment remains low. Access to capital is also high on the list of challenges that Georgian businesses encounter, though many said the funding is available for companies that do their homework. Finally, Georgia’s varied geography supports a range of lifestyles and business opportunities – urban, rural and everything in between.
Business-friendly regulations and taxes
“In general, I’d say regulations and taxes are pretty fair,” Ryan Keeton, co-founder of online used auto dealer Carvana, told Business News Daily. “We deal with a lot of government agencies … but we went through the process smoothly, and it was a positive experience. In general, as far as the transaction of these cars and the sales tax goes, Georgia deals pretty fairly.”
Georgia levies a 5.75% personal income tax and a similar corporate tax rate for C-corps. In addition, there is the state’s sales tax, which stands at a rate of 4%, plus the local sales tax. Total rates vary by which of the state’s 162 counties a small business operates within.
Of course, there are always bumps in the road despite the moderate rates. Andrew Poulos, serial entrepreneur and owner of Poulos Accounting and Consulting, said it can be a hassle to file sales-tax information with the state, which is required on a monthly basis.
“It could be very simple, or it could get complex, depending on the type of business the owner is running and whether they have to charge and collect in one county or multiple counties,” Poulos said. “It becomes more complex [when a company does business in multiple counties], because they have to track each sale in each county, and it becomes burdensome to report it all each month.”
One big boost to small business is Georgia’s local and regional support for entrepreneurial endeavors. Many small business owners cited the loyalty of their clientele as a big reason why they love doing business in the Peach State.
Georgia also has strong networking organizations, which help connect entrepreneurs to mentors, accelerators and incubators, and potential sources of funding. Tonya Lanthier, founder of dental jobs board DentalPost, said the Entrepreneurs’ Organization has been a crucial pillar of support for her as her company grows.
“EO is a global network, and we have a chapter here in Atlanta,” Lanthier said. “It’s almost like your own board for your company. They also have an incubator and accelerator, where if you’re around $200,000 or $250,000 [in revenue], they will help connect you with mentors to help you get to $1 million. I’m very grateful for the support network.”
Lanthier added that StartupChicks, an incubator designed to support women entrepreneurs starting out, was also key in giving her a leg up when she first launched.
Diverse geography and varied industries
Georgia’s economy is diverse, with some of its largest industries clearly defined in terms of the state’s geography. Steve Justice, executive director of the Georgia Centers of Innovation, an arm of the Georgia Department of Economic Development, pointed to the agriculture, aerospace, IT, energy, logistics and manufacturing industries as Georgia’s key areas of economic activity.
According to Justice, agriculture is spread throughout the state in rural areas and remains one of Georgia’s largest industries. In fact, agriculture contributes more than $73 billion to Georgia’s economy each year. Agriculture is also driving tech adoption, Justice said.
“There’s a lot of tech in agribusiness; a lot of farmers and the ag side of the sector really are the early adopters,” he said. “There’s a lot of wireless sensors, autonomous tractors, drones … all sorts of technologies to help increase yields and address workforce issues.”
Then there’s the aerospace industry, which is heavily concentrated in metro areas like Atlanta and Savannah. Aerospace businesses employ nearly 100,000 Georgians. However, tech companies tend to be spread out a bit more, often flocking to lower-cost cities. Grace Belangia and Eric Parker of theClubhou.se, a nonprofit innovation center for Georgia’s tech companies, said some tech startups are making their home in Augusta for just that reason.
“In Augusta, we’re an affordable city to get a business going,” Belangia said. “In the software and digital space, they can really be anywhere, so having access to our resources and mentors, as well as a low point of entry financially, allows them to get online.”
“On a local level, we take advantage of the low cost of living in our marketplace to provide free room and board for a year while these companies are trying to get off the ground,” Parker added. “We’re eliminating barriers to help grow companies and let them be successful.”
Finally, when it comes to logistics, Georgia is known for its comprehensive interstate highway system, as well as the Port of Savannah, which is the fourth largest port in the nation in terms of cargo shipped. Whether you’re shipping products or traveling out of state, Justice noted, you can reach most of the eastern U.S. from Georgia within two days.
Competitive labor market
Georgia boasts a relatively low unemployment rate of 3.7%, which is good for consumer spending and a healthy indicator of economic activity. Of course, a low unemployment rate also means high demand for skilled labor, driving up the price for top talent. According to Justice, Georgia is experiencing a shortage in skilled labor when it comes to technical trades in particular, a problem the state is working with industry to resolve through workforce education and retraining programs.
“Workforce is a challenge, but it’s a challenge everywhere,” Justice said. “The key area is technical trades. For many years, we focused on a four-year degree and college, and maybe in some ways we’ve neglected to tell our kids that there are other job opportunities.”
As a result, Georgia has created the High Demand Career Initiative, which Justice said began with a dialogue with companies throughout the state to determine their employment needs. Officials identified 17 areas where labor was sorely needed, including positions like welders, medical technicians and truck drivers. Students who attend a Georgia high school, Justice said, are eligible for a full scholarship to attain certifications for these types of positions.
“We have a strong education system to address [shortages], and we listen to industry,” Justice said. “We have all the ingredients to make a company successful. We love when people come here to build their idea, and we help them do that.”
Access to capital
One common challenge in Georgia is obtaining capital. Small businesses looking for a traditional loan or line of credit will likely be able to secure it so long as they have sound financials and a reasonable business plan. However, the funding challenges are highlighted by the reduction in number of banks from 192 to 181 institutions in 2017, according to the most recent available SBA data.
“We have good relationships with local lending companies,” said Belangia. “We try to bridge that gap to get [companies] access to those services they need. We have pitch events, where they can get in front of investors … people who are receptive and understand there is talent in startups and companies outside of big cities.”
Startups looking for seed capital should consider turning to Georgia’s angel investor community, many of whom work closely with development hubs like theClubhou.se. For larger investment deals, companies will likely have to travel to Atlanta to seek out venture capitalists, Parker said.
According to Parker, obtaining capital in Georgia is just about doing your homework, being prepared and connecting with the right resources. “We try to help businesses identify their customers and then find them in the marketplace. Once they solve that, the capital is often easier to get.”
Frequently asked questions about starting a business in Georgia
Starting a business anywhere is a difficult process. Navigating regulations and obtaining the right licenses can be confusing and overwhelming. Business News Daily is here to help with that. If you’re looking to start a business in Georgia, check out these frequently asked questions and use the following resources to help you launch your company.
- Stumped on what type of business you want to run? Check out our list of smart business ideas for 2019.
- Need help writing a business plan? These business plan templates should help you get started.
- Not sure which is the best legal structure for your business? We’ve broken down the various types, including sole proprietorship, partnership, LLC and different kinds of corporations.
- Looking for funding for your startup? These reviews and best picks for alternatives to small business loans can help.
- Make sure you’re managing your money properly with the best business accounting software.
Do you need a business license in Georgia?
Yes. In Georgia, before launching your business, you must apply for a business license with your city or county. Depending on the city or county, you might also be required to secure a state tax identification number, a trade name registration and zoning approval for your business’s location. You might also be required to apply for corporate registrations, professional licenses or special permits.
How much does a small business license cost?
Your business license must correspond to the product or service your business provides, so licenses vary in cost. However, most businesses require a buying service license, which costs $50 and requires annual renewal along with payment of the fee.
Does a sole proprietor need a business license in Georgia?
No. Sole proprietors do not have to register with the state of Georgia to legally operate their businesses. However, sole proprietors accept a great deal of liability, personally guaranteeing all debts and obligations of the business.
Do you need to register a business name?
In Georgia, business name registration must be submitted to the counties in which your business operates. However, you do not have to register your business name unless it is a “fictitious” or “doing business as” (DBA) name.
How much does a DBA cost?
When you register a DBA in Georgia, you must submit the application to the counties in which your business operates. You must also ensure your desired DBA is not already in use by another company. Once your application is submitted, you must pay a filing fee that varies by county. Expect to pay around $150 per county. Your DBA application must be submitted 30 days prior to opening your doors for business under the fictitious name.
How much does an LLC cost in Georgia?
In Georgia, like in many other states, LLCs are formed by filing articles of organization with Georgia’s secretary of state. On these documents, you must include information like the business name, the names of the managers or owners, addresses and contact information. These documents can be filed online or by mail and carry a filing fee of $100.
Do you need a Georgia tax ID number?
Any business that sells services or products subject to the collection of state sales tax must be registered with the Georgia Department of Revenue Tax. The application, Form CRF-002, can be completed online, at which point your business will be assigned a sales tax ID number. This is also known as your employer identification number, or EIN.
When are Georgia sales tax returns due?
Georgia sales taxes are due on the 20th of each month following your reporting period. You must file and pay sales and use taxes on a monthly, quarterly or annual basis. To determine which is best for your business, consult with an attorney or certified public accountant.
Resources for small businesses in Georgia
If you’re a small business owner in Georgia looking for resources to help you move forward, here are a few organizations you might want to learn more about.
SCORE’s volunteer business professionals and expert mentors give counsel and guidance to entrepreneurs looking to start or expand their businesses. The services are entirely free and volunteer-driven. Here are some of the chapters in Georgia:
The Entrepreneurs’ Organization (EO) in Atlanta is a local chapter of a global network made up of more than 11,000 business owners. The organization, founded in 1987, is present in 48 countries and maintains 153 active chapters. The EO can help small business owners access capital and mentorship, and connect with other members of their industry.
Since 2002, the annual nonprofit event Venture Atlanta has helped companies raise more than $1.3 billion in funding. Focused on tech businesses, Venture Atlanta is hosted every October with the goal of connecting entrepreneurs to high-level investors.
U.S. Small Business Administration district offices
The SBA Georgia District Office offers financing and grants as well as consultations and counseling services. There are also opportunities to apply for federal government contracts through the SBA and avenues for obtaining assistance in the wake of natural disasters.
Georgia Small Business Development Centers (SBDC)
Georgia hosts more than a dozen development centers for small businesses. Each is dedicated to supporting the development and retention of small businesses, helping entrepreneurs do everything from craft business plans to navigate the state’s tax code. You can find your region’s Small Business Development Center here.
Some source interviews were conducted for a previous version of this article.