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Palavir LLC · Annual Report

The State of US Small Business
and Compliance

2026 Edition

Joshua ElbergFounder, Palavir LLC
May 2026
palavir.co
A free read on the size, geography, wage structure, and federal compliance profile of US small business in 2026. Built on Census County Business Patterns 2022, American Community Survey 2023, the OIG List of Excluded Individuals and Entities, the GSA System for Award Management exclusion list, and Palavir's NewFilings Secretary-of-State index.
Contents

What's in this report

  1. 1.Executive summary3
  2. 2.The top-line numbers4
  3. 3.Where small business lives5
  4. 4.The wage story7
  5. 5.Compliance risk geography9
  6. 6.HUBZone opportunity11
  7. 7.Where to open your next business12
  8. 8.The long tail of new business formations14
  9. 9.About the data15
  10. 10.About Palavir16
This report is free. There is no email gate, no paywall, no sign-up form. If you find it useful and want the 2023 edition in your inbox next May, the link at the back will get you on the list. Otherwise, copy what helps and ignore the rest.
Section 1

Executive summary

Ten findings worth reading the rest of the report for. Every number on this page is sourced from public data assembled by Palavir in the first five months of 2026.

  • The United States has 8,290,063 business establishments employing 135,736,554 workers with $8.96 trillion in combined annual payroll, per Census County Business Patterns 2022.
  • California, Texas, and Florida together account for 27.9% of all US establishments. California alone is 12.3% of the country.
  • 207,215 federal exclusion records are active across the US: 82,928 on the OIG LEIE (healthcare) plus 124,287 on the GSA SAM list (procurement).
  • Mississippi has the highest exclusion intensity in the country: 788 federal exclusions per 10,000 business establishments, roughly 3.7x the national median.
  • Finance and Insurance in New York is the highest-paying state-NAICS combination in the country, with an average annual wage of $262,027 , +112% versus the national average for that sector.
  • Hospitality is consistently the lowest-wage sector. West Virginia's accommodation and food services workers average $19,856/year, 13.2x less than NY finance.
  • 1,499 of 3,144 US counties (48%) qualify as HUBZone-eligible by the HUD-style income test (80% of national median household income, or $62,830 for 2023).
  • Arkansas has the highest share of HUBZone-eligible counties in the nation at 91% (68 of 75 counties).
  • Across the 12 states covered by Palavir NewFilings, 15,292,338 Secretary-of-State business filings have been indexed. New York alone accounts for 5,751,706 of them.
  • Among counties with population ≥ 50,000, the top-ranked place to open a new business on Palavir's composite opportunity index is Gallatin County, MT (population 122,194, median household income $87,454, 17% population growth since 2018).
Sources: US Census CBP 2022, ACS 2023 5-Year Estimates, HHS-OIG LEIE, GSA SAM Exclusions, Palavir NewFilings. As of 2026-05-27.
Section 2

The top-line numbers

Start with the size of the thing being counted. The headline figures below come from the most recent full release of Census County Business Patterns (2022), augmented with federal exclusion counts from 2026-05-27 and Palavir's running NewFilings index.

US establishments
8,290,063
Census CBP 2022, sum of 19 NAICS sectors
US private employment
135,736,554
Census CBP 2022
Annual private payroll
$8.96 trillion
Census CBP 2022, reported in $1000s
Active federal exclusion records
207,215
OIG LEIE: 82,928 · GSA SAM: 124,287
New business filings (12-state Palavir index)
15,292,338
Palavir NewFilings, cumulative through 2026-05-27
Avg payroll per worker
$66,043
Derived: total payroll divided by total employment

The single most useful thing this page tells you: there are roughly 8.3 million addressable business buyers in the United States, with 136 million workers behind them. That number is the denominator under almost every market sizing exercise, every "TAM" slide, and every federal compliance question this report touches.

Note on CBP vintage. Census County Business Patterns is released roughly two years behind the calendar, the 2022 release is the most current full dataset available in 2026. ACS 5-Year Estimates and federal exclusion lists are more current (2023 and 2026-05-27 respectively). This is the same convention used by the Census Bureau itself in its own annual statistical releases.
Sources: US Census CBP 2022, HHS-OIG LEIE, GSA SAM Exclusions, Palavir NewFilings.
Section 3 · Page 1

Where small business lives

Three states own a third of every business establishment in the country. The geography is concentrated, and it has been concentrated for a long time. The table below is not surprising in its shape, it is more useful for the magnitude than the order.

Top 10 states by establishments

#StateEstablishmentsEmployment% of US
1California1,022,10416,030,86312.3%
2Texas656,63811,506,5027.9%
3Florida632,7569,628,1337.6%
4New York539,5888,428,8816.5%
5Illinois322,1525,533,5853.9%
6Pennsylvania307,5075,584,5743.7%
7Georgia258,0084,248,9263.1%
8Ohio254,4364,963,6163.1%
9North Carolina254,4284,106,4753.1%
10New Jersey237,2153,813,3622.9%

Visual: top 10 states by establishments

California
1,022,104
Texas
656,638
Florida
632,756
New York
539,588
Illinois
322,152
Pennsylvania
307,507
Georgia
258,008
Ohio
254,436
North Carolina
254,428
New Jersey
237,215
Source: US Census County Business Patterns 2022.
Section 3 · Page 2

Top counties and the long tail

Top 10 counties by establishments

#CountyStateEstablishmentsPopulation
1Los Angeles CountyCalifornia303,9729,848,406
2Cook CountyIllinois134,7655,185,812
3Harris CountyTexas109,7114,758,579
4Maricopa CountyArizona107,5264,491,987
5Orange CountyCalifornia106,1693,164,063
6Miami-Dade CountyFlorida95,8172,685,296
7New York CountyNew York94,9141,627,788
8San Diego CountyCalifornia92,7253,282,782
9King CountyWashington70,4742,262,713
10Dallas CountyTexas70,3862,603,816
Los Angeles County alone has more business establishments (303,972) than any state in the bottom 15 of the previous table. County-level concentration is sharper than state-level concentration. If you sell to small businesses, ZIP-level targeting beats state-level targeting on every dimension that matters.

The bottom 5 states

The least concentrated states give a useful contrast to the leader board above. These five states combined hold fewer total establishments than San Diego County, California.

StateEstablishments% of US
Vermont20,8540.25%
Alaska22,0530.27%
Wyoming23,1300.28%
District of Columbia23,8540.29%
North Dakota25,0680.30%

Industry mix: top 3 states

The top three states are not all the same shape. Their industry mixes diverge in ways that explain a lot about regional sales and recruiting patterns.

California, top 5 sectors by establishments

NAICS sectorEstablishments% of state
Professional, Scientific, and Technical Services142,54013.9%
Health Care and Social Assistance127,01912.4%
Retail Trade107,05310.5%
Accommodation and Food Services94,6729.3%
Construction85,1718.3%

Texas, top 5 sectors by establishments

NAICS sectorEstablishments% of state
Retail Trade83,78812.8%
Professional, Scientific, and Technical Services81,01112.3%
Health Care and Social Assistance77,08311.7%
Accommodation and Food Services64,9299.9%
Other Services (except Public Administration)57,9878.8%

Florida, top 5 sectors by establishments

NAICS sectorEstablishments% of state
Professional, Scientific, and Technical Services92,31314.6%
Retail Trade75,74312.0%
Health Care and Social Assistance71,59111.3%
Construction65,23810.3%
Other Services (except Public Administration)54,1178.6%
Source: US Census County Business Patterns 2022.
Section 4 · Page 1

The wage story

When you look at average annual wages by state and NAICS sector, the spread is wider than most national summaries suggest. Filtering to combinations with at least 5,000 workers (so the result is not a small county artifact), the ten highest-paying state-sector combinations look like this.

Top 10 highest-paying state-NAICS combinations

#StateSectorAvg annual wageEmployeesvs US
1New YorkFinance and Insurance$262,027539,719+112%
2WashingtonInformation$249,982184,141+76%
3CaliforniaInformation$221,502794,947+56%
4District of ColumbiaFinance and Insurance$193,37321,199+56%
5CaliforniaManagement of Companies and Enterprises$188,506369,984+49%
6MassachusettsFinance and Insurance$176,074187,453+42%
7ConnecticutFinance and Insurance$174,853112,512+41%
8MassachusettsInformation$159,024130,330+12%
9District of ColumbiaProfessional, Scientific, and Technical Services$157,547113,870+50%
10New JerseyManagement of Companies and Enterprises$154,836119,547+22%
The leader board is dominated by three sectors: Finance and Insurance, Information, and Management of Companies and Enterprises. New York, Washington, and California take seven of the ten slots. This is not the average American wage market. This is the very thin top of it.

Top 10 lowest-paying state-NAICS combinations

#StateSectorAvg annual wageEmployees
1West VirginiaAccommodation and Food Services$19,85663,567
2KansasAccommodation and Food Services$19,892117,287
3NebraskaAccommodation and Food Services$19,89377,825
4KentuckyAccommodation and Food Services$19,964172,542
5OhioAccommodation and Food Services$20,115473,891
6IowaAccommodation and Food Services$20,144119,547
7West VirginiaArts, Entertainment, and Recreation$20,2456,534
8North DakotaArts, Entertainment, and Recreation$20,2765,662
9OklahomaAccommodation and Food Services$20,338163,318
10ArkansasAccommodation and Food Services$20,343109,696
Source: US Census CBP 2022, payroll divided by employment.
Section 4 · Page 2

The same job, different state

A more useful framing: take a single sector and look at the geographic spread for the same job. We use NAICS 62 (Health Care and Social Assistance) and NAICS 23 (Construction) below, two sectors with workers in every state.

Healthcare and Social Assistance (NAICS 62)

Highest healthcare wage state
$72,470
California
Lowest healthcare wage state
$50,356
New Mexico
California healthcare
$72,470
2,221,389 employees
Mississippi healthcare
$52,045
165,204 employees

The same NAICS code, in the same year, in the same country. The spread between the highest-paying and lowest-paying state for healthcare and social assistance is 44%. A healthcare worker in California earns roughly $22,114 more per year than one in New Mexico, before any cost-of-living adjustment.

Construction (NAICS 23)

Highest construction wage state
$92,599
Alaska
Lowest construction wage state
$57,762
Idaho
For sourcing and pricing decisions, the practical question is rarely "what does this sector pay nationally", it is "what does this sector pay in the specific state I am bidding in." The national average hides a 2-to-3x spread inside almost every NAICS.
Source: US Census CBP 2022.
Section 5 · Page 1

Compliance risk geography

Federal exclusion lists are the most boring and most underused data in vendor-risk management. The OIG LEIE list (Medicare and Medicaid program exclusions) and the GSA SAM list (federal procurement exclusions) together contain 207,215 active records as of 2026-05-27. The relevant question for buyers, lenders, and partners is not the raw count, it is the rate per 10,000 businesses in each state.

Top 10 states by federal exclusion intensity

Exclusions per 10,000 business establishments. Calculated as (LEIE + SAM count) divided by total Census CBP establishments, multiplied by 10,000.

#StatePer 10K estabLEIESAMTotal
1Mississippi7882,0482,7124,760
2Vermont6455787681,346
3West Virginia5858451,2332,078
4Rhode Island4455207921,312
5Oklahoma4381,6632,5254,188
6Louisiana4301,9412,7064,647
7Kentucky4271,7412,2473,988
8Arkansas4231,2741,6672,941
9Alabama4211,8702,5454,415
10Arizona3812,6693,4216,090

Visual

Mississippi
788
Vermont
645
West Virginia
585
Rhode Island
445
Oklahoma
438
Louisiana
430
Kentucky
427
Arkansas
423
Alabama
421
Arizona
381
The national median exclusion intensity is 213 per 10,000. Mississippi runs at roughly 3.7x the median. If your vendor screening process only looks at raw exclusion counts, you will systematically under-weight risk in small states and over-weight risk in large states.
Sources: HHS-OIG LEIE, GSA SAM Exclusions, US Census CBP 2022. As of 2026-05-27.
Section 5 · Page 2

Reading the exclusion map

A few patterns are worth calling out explicitly because they tend to be missed when this data is looked at one state at a time.

The Deep South cluster

Mississippi, Louisiana, Alabama, Arkansas, and Kentucky all appear in the top 10 by intensity. So do Oklahoma and West Virginia. Seven of the ten highest-intensity states are in the South or Appalachian region. This is not a random distribution.

The lowest-intensity states

StatePer 10K estabLEIESAM
District of Columbia12793211
Wisconsin1327771,122
Nebraska133314435
Hawaii143177293
Montana146256357

Practical implication

A vendor screen built only at the federal level, "is this entity on LEIE or SAM today", answers a narrower question than most buyers think. It tells you whether the entity itself has been excluded. It does not tell you whether the entity sits in a state where exclusion rates run 5x the national median, which is a useful proxy for the local enforcement environment. The intensity table above is the missing layer.

What we cannot show. The OIG LEIE and SAM lists do not include a clean NAICS field on every record. Sector-level intensity (e.g., "exclusion rate inside healthcare NAICS 62") is therefore not computable at the same fidelity as the state-level numbers above. We disclose that gap rather than paper over it with estimates.
Sources: HHS-OIG LEIE (oig.hhs.gov/exclusions), GSA SAM Exclusions (sam.gov), US Census CBP 2022. As of 2026-05-27.
Section 6

HUBZone opportunity

The SBA's Historically Underutilized Business Zone (HUBZone) program awards federal contract preference to small businesses located in qualifying low-income areas. The federal eligibility test is more nuanced than a single number, but a useful first-cut proxy is the HUD-style 80%-of-national-median household income threshold. We applied that test to every US county using ACS 2023 5-Year Estimates.

National median household income (ACS 2023)
$78,538
80% threshold
$62,830
Counties evaluated
3,144
Eligible counties
1,499
48% of all US counties

Top 10 states by count of HUBZone-eligible counties

Texas
124
Georgia
107
Kentucky
88
Missouri
82
Mississippi
73
Tennessee
70
Arkansas
68
North Carolina
63
Oklahoma
60
Alabama
56

Top 5 states by share of counties eligible

StateEligibleTotal countiesShare
Arkansas687591%
West Virginia495589%
Mississippi738289%
Alabama566784%
New Mexico273382%
Why this matters. Federal contracting officers can set aside specific procurements for HUBZone-certified small businesses. Locating a qualifying small business in one of these counties puts the federal HUBZone preference on the table, alongside any state-level preferences for rural, low-income, or distressed regions. This is one of the few federal preferences that is a function of geography rather than ownership.
Source: US Census ACS 2023 5-Year Estimates, HUD-style 80% national median test. The official SBA HUBZone map adjusts for Indian Reservations, Qualified Disaster Areas, BRAC closures, governor-designated areas, and census-tract-level data, the county-level proxy here is for orientation only.
Section 7 · Page 1

Where to open your next business

Palavir publishes a composite county opportunity index that combines four equally-tractable signals: median household income, population growth, establishment density per capita, and state-level federal exclusion intensity. The weights are 30% / 25% / 25% / 20%. Each component is z-scored across all counties and then linearly combined. The full table below filters to counties with population at least 50,000, small enough to be reachable, large enough to matter.

Top 15 counties (population ≥ 50,000) by opportunity score

#CountyStateScorePopulationMedian HHIPop growth
1Gallatin CountyMT1.54122,194$87,45417%
2Madison CountyID1.4453,578$58,25938%
3Eagle CountyCO1.1755,374$103,1742%
4Comal CountyTX1.16174,552$99,01529%
5Lincoln CountySD1.1568,286$96,55224%
6Flathead CountyMT1.11108,445$71,32711%
7Kaufman CountyTX1.07160,718$88,60635%
8Washington CountyUT1.07189,827$76,41118%
9Walton CountyFL1.0479,846$79,28121%
10Deschutes CountyOR1.03203,026$87,64012%
11Iron CountyUT1.0360,201$65,52721%
12Kootenai CountyID0.98177,736$77,03416%
13Forsyth CountyGA0.98260,062$138,00018%
14Rockwall CountyTX0.94116,931$124,91725%
15New York CountyNY0.931,627,788$104,553-0%
Source: Palavir Opportunity Index 2026. Inputs: ACS 2023 5-Year Estimates (income + population), ACS 2018 5-Year (prior population for growth), CBP 2022 (establishment density), LEIE/SAM as of 2026-05-27 (state-level exclusion intensity).
Section 7 · Page 2

Methodology and industry-specific re-ranking

Why these counties scored highest

The pattern is consistent. The top 15 are dominated by mid-size counties in growing states with relatively low state-level exclusion intensity and median household income above the national average. Gallatin County, Montana (Bozeman) is the leader on the population-floor filter, posting 17% population growth and $87,454 median household income. The Mountain West and exurban Texas dominate the leader board.

Industry-specific re-ranking

The composite score does not consider the specific industry you operate in. A construction company re-ranks the same counties by demand for housing starts and pipeline of permitted projects. A healthcare clinic re-ranks by population age, density, and existing supply of competitors. A tech services firm re-ranks by educated workforce share. Palavir publishes industry-specific re-rankings as dedicated tools, links at the end of this report.

The same county will score very differently depending on the lens applied:

  • Construction-weighted: counties with high population growth + low housing supply + high median home value tend to outrank ski-town counties on opportunity-per-dollar-of-overhead.
  • Healthcare-weighted: counties with growing 65+ populations and high existing healthcare establishment density (revenue base + workforce pipeline) outrank growth-only counties.
  • Tech-services-weighted: counties with high bachelor's-degree share, high broadband penetration, and presence of an anchor research university outrank pure growth-and-income counties.
Caveat on county-level scores. The opportunity index uses state-level exclusion intensity as its compliance signal because per-county LEIE/SAM data is not consistently published. A county in a high-intensity state inherits that signal. If you have access to county-level enforcement data (US Attorney's Office activity, state inspector general dockets), you can swap that in for a more accurate result.
Source: Palavir Opportunity Index, methodology document at palavir.co/tools/opportunity-index.
Section 8

The long tail of new business formations

Census County Business Patterns measures the stock of US business establishments at a point in time. It does not measure the flow of new registrations. Palavir's NewFilings index reads Secretary-of-State public registries for 12 states (Colorado, Connecticut, DC, Florida, Iowa, Missouri, New York, Oregon, Pennsylvania, Texas, Virginia, Washington) and accumulates one row per new entity registered. As of 2026-05-27 the index holds 15,292,338 rows across those 12 states.

NewFilings: cumulative state totals (12 covered states)

New York
5,751,706
Texas
3,070,589
Pennsylvania
2,310,486
Virginia
1,492,437
Colorado
1,181,659
Oregon
561,810
Connecticut
444,685
Iowa
335,205
District of Columbia
95,086
Florida
48,675

What this number says about the post-2020 economy

The pandemic-era jump in business formation has not reversed. The 5,751,706 filings indexed in New York alone are larger than the cumulative total of every state below the top five. Two things are happening at once: a real expansion in sole-proprietor and LLC formation since 2020, and an indexing tailwind from states like New York that publish bulk SOS data going back many years.

Coverage gap. 38 states are not currently in the NewFilings index. The published methodology calls out which states publish bulk SOS data versus which require captcha-defended one-record-at-a-time queries. California, Illinois, and Ohio, three of the largest establishment states, are not yet in the index because of the latter constraint. Future editions will expand coverage as state data-portal access improves.
Source: Palavir NewFilings (newfilingalerts.com), cumulative through 2026-05-27.
Section 9

About the data

Sources

  • US Census County Business Patterns (CBP) 2022. Public domain. Released annually with a two-year lag. Provides establishment, employment, and payroll counts at US, state, county, and ZIP levels by 2-digit NAICS sector. The 2022 release is the most current full vintage available in 2026.
  • American Community Survey (ACS) 2023 5-Year Estimates. Public domain. Provides demographic and income data at the US, state, county, place, and ZCTA levels. 5-Year Estimates are the most reliable for small geographies.
  • HHS-OIG List of Excluded Individuals and Entities (LEIE). Public domain. Identifies individuals and entities excluded from participation in Medicare, Medicaid, and other federal healthcare programs. Refreshed monthly by the HHS Office of Inspector General.
  • GSA System for Award Management (SAM) Exclusions. Public domain. Identifies entities debarred, suspended, or otherwise excluded from federal procurement and grant programs. Updated continuously by the General Services Administration.
  • Palavir NewFilings. Aggregated public Secretary-of-State business filings across 12 states. Cumulative index as of 2026-05-27.

Methodology

  • NAICS coverage. 19 two-digit NAICS sectors. Sub-sector detail (4-digit, 6-digit) is available in the underlying Palavir Census Bundle but not used in this report.
  • Average annual wage. Total annual payroll divided by total employment. This is a simple average and does not adjust for hours worked, part-time vs full-time mix, or cost-of-living. It is the same convention used by Census in its CBP summary tables.
  • Exclusion intensity. (LEIE + SAM count) divided by total CBP establishments, multiplied by 10,000. State-level only; county-level intensity is not computable from the public data with confidence.
  • HUBZone eligibility. County median household income below 80% of national median. This is a HUD-style proxy. The official SBA HUBZone map uses additional criteria (Indian Reservations, Qualified Disaster Areas, BRAC closures, census-tract-level data) and should be consulted for any actual certification decision.

Limitations

  • CBP suppression. Census suppresses cell values where disclosure would identify an individual establishment. Small-state, small-sector intersections are the most affected. We disclose these as "not available" rather than impute.
  • NewFilings coverage. 12 states only. Rankings on Section 8 are within that 12-state universe, not all 50 states.
  • Vintage mismatch. CBP is 2022. ACS is 2023. Exclusions are 2026-05-27. Most readers will not care, but year-over-year interpretation should account for the lag.

Refresh cadence

This report is regenerated annually each May, after the prior year's CBP release. Component data products (state pages, county pages, ranking tables on palavir.co) refresh on their own faster cadences, exclusion lists monthly, NewFilings nightly, CBP and ACS annually.

Generated 2026-05-27T22:00:28.797Z. Source files frozen at vintages noted above.
Section 10

About Palavir

Palavir LLC is a Pennsylvania-based data and consulting firm founded in 2023. We build public-data products and tools that help small businesses, lenders, attorneys, and federal contractors make better decisions with information that is already public but difficult to assemble.

We are a small operation. We do not sell advertising. We do not gate downloads behind email forms. We publish the underlying data products as paid datasets on marketplaces (Snowflake, Datarade) and the dashboards and tools they power as free reads on palavir.co. Our paying customers are buyers of structured data and consumers of our consulting work; everyone else is reading for free.

Products

  • GovBids, federal contract opportunities, awards, and small-business set-aside tracking. govcontractdata.com
  • NewFilings, fresh business filings from Secretary-of-State public registries across 12 states. newfilingalerts.com
  • FindGrants, grant opportunity matching for small businesses and nonprofits, indexed across 60,000+ live grants. findgrants.io
  • OnePageAudit, ADA/WCAG accessibility scanning for small business websites. onepageaudit.com
  • Palavir Census Bundle, the underlying dataset behind this report, available for commercial use on Snowflake Marketplace and Datarade. palavir.mydatastorefront.com
  • SkipEntry, AI invoice extraction for bookkeepers and small business AP teams. skipentry.com

Free tools

Every tool below is free to use without registration:

The 2027 edition

This report will be re-issued in May 2027 with refreshed CBP 2023 data, updated exclusion lists, and any new NewFilings state coverage we add between now and then. If you would like a copy emailed to you when it ships, contact josh@palavir.co and we will add you to the announcement list. That is the only thing on the list; we do not run a newsletter.

Contact

Joshua Elberg, Founder · josh@palavir.co · palavir.co