More than 1 million small businesses operate in Georgia, according to the U.S. Small Business Administration’s Office of Advocacy. These companies make up 99.6% of all businesses in the Peach State and employ 1.7 million residents, nearly 43% of all Georgia employees. Although Georgia is home to a wide range of big corporations – including Delta Air Lines, Home Depot, UPS and Coca-Cola – small businesses remain the backbone of the state’s economy. Georgia’s entrepreneurial community is proliferating with a vibrant startup scene, a burgeoning tech industry and more.
Here’s a snapshot of Georgia’s current economic and business landscape, according to data from the Bureau of Economic Analysis:
We spoke with entrepreneurs, small business owners and advisors in Georgia about what new businesses can expect in the state. They were largely optimistic about the future of doing business in Georgia, but they also cited some challenges.
Business owners said regulations and small business taxes in the Peach State are reasonable. “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 [dealt] with a lot of government agencies … but we went through the process [of founding the business] 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. Additionally, the state’s sales tax stands at 4%. Businesses also must consider local sales taxes, which vary across the state’s 159 counties. When both state and local sales taxes are considered, the rate is usually between 7% and 8% but can be as high as 9%.
Of course, even with moderate tax rates, there could be some bumps in the road. 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 monthly.
“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.”
Many small business owners cited customer loyalty as a big reason they love doing business in the Peach State. Georgia’s communities provide local and regional support for small entrepreneurial endeavors, thereby boosting local businesses.
Georgia also has strong networking organizations, helping entrepreneurs find mentors, accelerators, business incubators and potential funding sources. Tonya Lanthier, founder of dental jobs board DentalPost, said the Entrepreneurs’ Organization (EO) has been a pillar of support 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 Startup Chicks, an incubator designed to support new women entrepreneurs, was also crucial in giving her a leg up when she first launched.
Georgia’s diverse geography provides ideal environments for its major industries. Steve Justice, current chief operating officer of INTIGEQ LLC and former executive director of the Georgia Centers of Innovation (an arm of the Georgia Department of Economic Development), pointed to the agricultural, aerospace and tech industries, along with unique logistics, as key economic activity areas. Thanks to tax incentives, Georgia also has become a major film and TV production hub.
Georgia boasts a relatively low unemployment rate of 3.1%, which is good for consumer spending and a healthy indicator of economic activity. Of course, a low unemployment rate also means it’s harder to attract and retain top talent, driving up your employee salary range.
According to Justice, Georgia is experiencing a shortage in skilled labor technical trades, in particular. Fortunately, the state is working to resolve this problem 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, highlighting positions such as welders, medical technicians and truck drivers. Students who attend a Georgia high school 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.”
One common challenge in Georgia is obtaining capital. Some companies looking for their first small business loan or line of credit will be able to secure funding with sound financials and a reasonable business plan. However, due to historical reductions in the number of institutions within the state, it can be difficult to find a bank.
“We have good relationships with local lending companies,” Belangia said. “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 investors; some work closely with development hubs such as theClubhou.se. For larger investment deals, companies will likely have to travel to Atlanta to seek out venture capitalists, Parker said.
To obtain capital in Georgia, it’s important to do your homework, be prepared and connect with the right resources, Parker said. “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.”
Pitch business ideas to potential investors at local events, like fundraisers, galas and conventions. A compelling, well-prepared pitch boosts your chances of persuading an angel investor to support your business.
Starting a business anywhere can be challenging. Navigating regulations and obtaining the right licenses can be confusing and overwhelming. If you’re thinking about starting a business in Georgia, check out these frequently asked questions and use the following resources to help launch your company.
Check out our list of great ideas for small businesses.
To help you choose the right legal structure for your business, we’ve broken down the various types, including sole proprietorship, partnership, LLC and different kinds of corporations.
Check out our reviews of the best business loans.
Ensure you manage your money properly with the best accounting software for small businesses.
Yes, you’ll likely need to get a business license in Georgia. Before launching your business in the state, you must apply for a business license unless you are a sole proprietor. 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.
Your business license must correspond to your business’s product or service, so license costs vary. However, most businesses need a buying service license, which costs $50 and requires annual renewal along with the initial fee.
No, sole proprietors do not have to register with the state of Georgia to operate their businesses legally. However, sole proprietors accept a great deal of liability, personally guaranteeing all debts and obligations of the business, and sole proprietor taxes can be tricky.
In Georgia, you must submit business name registrations to the counties where your business operates. However, you do not have to register your business name unless it is a “fictitious” or doing business as (DBA) name, meaning it is different from the name you used on your original registration paperwork.
When registering a DBA in Georgia, you must submit the application to all counties where your business operates. You must also ensure your desired DBA is not already in use by another company by checking the business registry. Once your application is submitted, you must pay a filing fee that varies by county. Expect to pay around $150 per county. You must submit your DBA application 30 days before opening your doors for business under the fictitious name.
As in many other states, limited liability companies (LLCs) are formed in Georgia by filing articles of organization with Georgia’s secretary of state. On these documents, you must include information such as the business name, the names of the managers or owners, addresses, and contact information. You can file these documents online or by mail with a filing fee of $110. You’ll also need to understand how LLC taxes work.
Any business that sells services or products that are subject to the collection of state sales tax must be registered with the Georgia Department of Revenue. You can download the application, Form CRF-002, online, and your business will be assigned a sales tax ID number. This is also known as your employer identification number (EIN).
Georgia sales taxes are due on the 20th of each month following your reporting period. You must file and pay sales and use taxes monthly, quarterly or annually. To determine which frequency is best for your business, consult an attorney or certified public accountant (CPA).
If you’re a small business owner in Georgia and you’re 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 who are 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 of more than 11,000 business owners. The organization, founded in 1987, is present in 48 countries and maintains 153 active chapters. EO can help small business owners access capital and mentorship and connect with industry peers.
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, business grants, 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 hosts more than a dozen development centers for small businesses. Each is dedicated to supporting the development and retention of small businesses, helping entrepreneurs craft business plans and navigate the state’s tax code, and more. To get started, find your region’s Small Business Development Center location.
If you’re ready to take the leap and become a small business owner, it’s crucial to keep the right business location in mind. Georgia offers a wide range of opportunities across major hubs, such as Atlanta; important ports, like Savannah; and up-and-coming, more affordable communities, like Augusta.
While some of the state’s fees and taxes are difficult to navigate, Georgia has a vibrant community of supportive clientele and other business owners to help you thrive.
Cailin Potami contributed to the writing and reporting in this article. Source interviews were conducted for a previous version of this article.