The Business Density Index: Establishments per Capita Rankings (2022)

What if you could see that Wyoming has 39.9 businesses per 1,000 residents while Texas has 21.9—revealing exactly where business density is highest? This Business Density Index reveals establishments per capita rankings—and how you can position yourself in markets with the highest business activity per person.

The data shows dramatic differences: business density ranges from 39.9 establishments per 1,000 residents in Wyoming to 21.9 in Texas—a 1.8x difference. This isn’t just about geography—it’s about understanding business density, market activity, and entrepreneurial concentration that directly impact your competitive strategy and location decisions.

Key Takeaways

• Business density varies dramatically by location—Establishments per capita ranges from 39.9 per 1,000 in Wyoming to 21.9 in Texas (1.8x difference), revealing clear entrepreneurial activity patterns
• High business density indicates entrepreneurial activity—Markets with higher business density (30+ per 1,000) indicate strong entrepreneurial concentration with active business environments
• Location strategy must account for business density—Choosing markets with high business density provides access to active business environments and entrepreneurial ecosystems
• Balanced approach often offers best opportunity—Markets with high business density (25-30 per 1,000) and moderate competition offer entrepreneurial activity with manageable competition

This analysis examines County Business Patterns (CBP) data from the U.S. Census Bureau and American Community Survey (ACS) population data to calculate business density—establishments per capita rankings, revealing where business activity is most concentrated relative to population. You’ll discover which states have the highest business density, how entrepreneurial concentration varies by location, and where opportunities exist for businesses in high-activity markets.

What You’ll Discover:

• State rankings by business density (establishments per 1,000 residents)
• Business activity patterns revealing entrepreneurial concentration by location
• Location-specific density indicators impacting competitive strategy
• Business density analysis by state
• Market activity indicators for strategic business decisions

Why This Matters: Understanding business density helps you identify markets with high entrepreneurial activity, assess competitive dynamics, and make strategic location decisions. Markets with higher business density offer active business environments that support business growth.

Business Density Varies Dramatically by Location

The Numbers: Business density ranges from 39.9 establishments per 1,000 residents in Wyoming to 21.9 in Texas—a 1.8x difference. This means Wyoming has 1.8x higher business density than Texas, indicating very different entrepreneurial concentration patterns.

So What? Different locations show dramatically different business density, indicating vastly different entrepreneurial activity and business concentration. Understanding these patterns helps you identify where business activity is strongest and where entrepreneurial ecosystems exist.

How to Use This: If you’re seeking high entrepreneurial activity, markets with very high business density (30+ per 1,000) like Wyoming (39.9), Montana (37.4), and Colorado (31.2) indicate very high business density. Target these markets for access to active business environments and entrepreneurial ecosystems.

High Business Density Indicates Entrepreneurial Activity

The Numbers: States like Wyoming (39.9 per 1,000), Montana (37.4), and Colorado (31.2) have the highest business density, indicating strong entrepreneurial concentration and business activity.

So What? Business density indicates entrepreneurial activity. Markets with higher business density typically have more active business environments, entrepreneurial ecosystems, and competitive advantages. These markets offer better access to business activity than lower-density markets.

How to Use This: Target markets where business density is very high (30+ per 1,000) for access to active business environments. These markets offer entrepreneurial activity, business concentration, and competitive advantages that lower-density markets may not provide.

Location Strategy Must Account for Business Density

The Numbers: The difference between the highest-density state (Wyoming, 39.9 per 1,000) and lower-density states (Texas, 21.9) is 1.8x, meaning dramatically different entrepreneurial activity and business concentration.

So What? Business density directly impacts your competitive position. Markets with high business density offer active business environments and entrepreneurial ecosystems. Your location choice should prioritize markets with high business density for your business needs.

How to Use This: For businesses requiring entrepreneurial ecosystems, target markets with very high business density (30+ per 1,000). These markets offer business activity, entrepreneurial concentration, and competitive advantages.

Red Flags

• Very Low Business Density (<20 per 1,000): May indicate limited entrepreneurial activity and lack of active business environments
• Density-Competition Mismatch: Markets with high business density but also very high competition may create challenging competitive dynamics
• Declining Business Density: Markets where business density is decreasing may signal declining entrepreneurial activity

Green Lights

• Very High Business Density (30+ per 1,000): Indicates strong entrepreneurial concentration with active business environments and entrepreneurial ecosystems
• High Density with Growing Trends: Markets with high business density and growing trends signal expanding entrepreneurial activity
• Consistent High Density: Markets with consistently high business density offer stable entrepreneurial activity
• Diverse High-Density Industries: Markets with high business density across multiple industries offer stability and multiple entrepreneurial activity sources

How to Use This Data

Follow this step-by-step process to identify business density and make data-driven location decisions:

Step 1: Identify High-Density Markets

Compare business density (establishments per 1,000 residents) across states:

• State-level: Get broad business density identification
• Density Ranking: Rank states by business density to identify highest-density markets
• Activity Indicators: Use density to assess entrepreneurial activity and business concentration

Action: Create a spreadsheet with all 50 states. List business density (establishments per 1,000 residents) for each. Rank by density to identify highest-density markets (strong entrepreneurial activity).

Step 2: Assess Business Density Benefits

High business density indicates strong entrepreneurial activity and business concentration:

• Entrepreneurial Activity: Access to active business environments and entrepreneurial ecosystems
• Business Concentration: Competitive advantages from high business density
• Market Activity: Strong economies with active business environments

Action: For each high-density market, assess business density benefits. Identify markets with entrepreneurial activity, business concentration, and competitive advantages.

Step 3: Evaluate Business Density vs. Competition

Balance business density benefits with competition levels:

• High Density, High Competition: May offer entrepreneurial activity but also intense competition
• High Density, Moderate Competition: Offers best balance of entrepreneurial activity and manageable competition
• Moderate Density, Low Competition: May offer some entrepreneurial activity with less competition

Action: For each high-density market, evaluate business density vs. competition. Choose markets that offer entrepreneurial activity with manageable competition.

Step 4: Choose Your Business Density Location

Select markets with high business density that match your business needs.

Action: Create a decision matrix scoring each location on: business density (40%), entrepreneurial activity (30%), and competition (30%). Choose the location with highest score.

Step 5: Make Your Location Decision

Combine business density analysis with other factors (business climate, costs) to choose your location.

Action: Create a final decision matrix scoring each location on: business density (30%), entrepreneurial activity (30%), business climate (20%), and costs (20%).

Common Use Cases

Scenario 1: Seeking High Entrepreneurial Activity → Focus on markets with very high business density (30+ per 1,000). These markets offer strong entrepreneurial concentration with active business environments and entrepreneurial ecosystems.

Scenario 2: Balanced Density and Competition → Target markets with high business density (25-30 per 1,000) and moderate competition. These markets offer entrepreneurial activity with manageable competition.

Scenario 3: Emerging Density Opportunity → Consider markets with moderate business density (20-25 per 1,000) but growing trends. These markets may offer emerging entrepreneurial activity with less competition.

Scenario 4: Risk-Averse Strategy → Focus on markets with moderate-to-high business density (25-30 per 1,000) that offer proven entrepreneurial activity with stable competition.

Questions to Ask Yourself

• How important is entrepreneurial activity vs. competition for my business?
• Do I need very high business density (30+ per 1,000) or is moderate density (20-25) sufficient?
• What business density benefits do I need—entrepreneurial activity, business concentration, or market activity?
• Am I entering a validated high-density market or an emerging one?

Action Items Checklist

• Identify high-density markets by ranking states by business density (establishments per 1,000 residents)
• Assess business density benefits (entrepreneurial activity, business concentration) in high-density markets
• Evaluate business density vs. competition levels for each candidate market
• Research business density dynamics and entrepreneurial activity in high-density markets
• Compare business density benefits with business climate and costs
• Create a decision matrix scoring each location on business density, entrepreneurial activity, and competition
• Consult with Business Initiative for business density analysis and location strategy guidance

Industry-Specific Recommendations

Professional Services (NAICS 54): Target markets with high business density (25-30+ per 1,000) like Colorado (31.2), Delaware (28.6), and Florida (28.5). Professional services benefit from high business density with strong entrepreneurial activity.

Technology Services (NAICS 51): Focus on markets with high business density in tech hubs. Technology businesses benefit from high business density with tech entrepreneurial activity.

Retail Trade (NAICS 44-45): Look for markets with moderate-to-high business density (25-30 per 1,000) for retail. Retail businesses benefit from business density with retail entrepreneurial activity.

Manufacturing (NAICS 31-33): Prioritize markets with moderate business density for manufacturing. Manufacturing businesses benefit from business density with manufacturing entrepreneurial activity.

Health Care (NAICS 62): Consider markets with high business density (25-30+ per 1,000) for health care. Health care businesses benefit from business density with health care entrepreneurial activity.

Common Mistakes to Avoid

Mistake 1: Using Only Business Density Without Population Context Business density shows entrepreneurial concentration but doesn’t reveal population size, market size, or competitive dynamics. Always consider both density and population when assessing location opportunities.

Mistake 2: Ignoring Competition in High-Density Markets High business density may indicate strong entrepreneurial activity but also high competition. Don’t ignore competition—high-density markets may have intense competition that offsets entrepreneurial activity benefits.

Mistake 3: Not Considering Industry-Specific Density Overall business density doesn’t reflect your industry’s specific density patterns. Always use NAICS-filtered data for your specific industry to assess industry-specific business density.

Mistake 4: Overlooking Market Dynamics Business density shows entrepreneurial concentration but doesn’t reveal market dynamics, competitive positioning, or business model fit. Don’t overlook market dynamics—they impact business viability.

Mistake 5: Not Validating with Market Research Business density data shows patterns but doesn’t reveal market dynamics, competitive positioning, or entrepreneurial ecosystem quality. Always validate with market research and local analysis.

Optimization Strategies

For Maximum Entrepreneurial Activity Benefits: Target markets with very high business density (30+ per 1,000) that offer strong entrepreneurial concentration with active business environments and entrepreneurial ecosystems.

For Balanced Approach: Focus on markets with high business density (25-30 per 1,000) that offer entrepreneurial activity with manageable competition.

For Emerging Density Opportunity: Consider markets with moderate business density (20-25 per 1,000) but growing trends that may offer emerging entrepreneurial activity with less competition.

For Risk-Averse Strategy: Prioritize markets with moderate-to-high business density (25-30 per 1,000) that offer proven entrepreneurial activity with stable competition.

Timing Considerations

Best Time to Enter High-Density Markets: When you have resources ready and competitive positioning complete. High-density markets reward businesses that can leverage entrepreneurial activity and business concentration.

Best Time to Enter Emerging Density Markets: When business density is growing, indicating expanding entrepreneurial activity. Emerging density markets offer entrepreneurial activity with less competition but require careful market validation.

When to Reassess: Review business density data annually when new CBP and ACS releases become available. Market positions change, and what was high-density 2-3 years ago may not be today.

Resource Recommendations

For Business Density Analysis:

• Census Bureau County Business Patterns (official CBP data source)
• American Community Survey (official ACS population data)
• Business density calculations (establishments per 1,000 residents)
• State economic development websites (local business density insights)

For Location Support:

• Business Initiative location strategy services
• Local chamber of commerce (county-level business density information)
• State Secretary of State websites (business registration requirements)

For Business Density Research:

• Combine CBP establishment data with ACS population data to calculate business density
• Research local business density dynamics and entrepreneurial activity
• Consult with Business Initiative for personalized business density analysis and location guidance

FAQs - Frequently Asked Questions About The Business Density Index: Establishments per

In Summary

Our comprehensive exploration of business density rankings (2022) has revealed critical insights into entrepreneurial activity, business concentration, and location opportunities that can inform strategic business decisions.

Key Findings:

• Business density varies dramatically by location—establishments per capita ranges from 39.9 per 1,000 in Wyoming to 21.9 in Texas (1.8x difference)
• High business density indicates entrepreneurial activity—markets with higher business density (30+ per 1,000) indicate strong entrepreneurial concentration with active business environments
• Location strategy must account for business density—choosing markets with high business density provides access to active business environments and entrepreneurial ecosystems
• High-density markets offer entrepreneurial activity benefits—markets with very high business density (30+ per 1,000) offer strong entrepreneurial concentration with active business environments
• Balanced approach often offers best opportunity—markets with high business density (25-30 per 1,000) and moderate competition offer entrepreneurial activity with manageable competition

What This Means for Your Business: Understanding business density helps you identify markets with high entrepreneurial activity, assess competitive dynamics, and make strategic location decisions. Markets with higher business density offer active business environments that support business growth. The best approach balances business density (entrepreneurial activity) with competition and business climate.

Practical Applications:

• Location Strategy: Use business density data to identify markets where business density is very high (30+ per 1,000) for access to active business environments
• Market Analysis: Compare business density across locations to understand entrepreneurial activity and business concentration
• Competitive Positioning: Target markets with high business density for access to entrepreneurial activity, business concentration, and competitive advantages
• Strategic Planning: Prioritize markets with very high business density (30+ per 1,000) for maximum entrepreneurial activity benefits and business concentration

Next Steps:

1. Identify high-density markets by ranking states by business density (establishments per 1,000 residents)
2. Assess business density benefits (entrepreneurial activity, business concentration) in high-density markets
3. Evaluate business density vs. competition levels for each candidate market
4. Compare business density benefits with business climate and costs
5. Consult with Business Initiative for business density analysis and location strategy guidance

Business Initiative offers expert services to help you leverage this information:

• Startup Cost Calculator
• Market Opportunity Finder
• Market Segmentation Tool

For personalized advice, schedule a consultation with Business Initiative or reach out through our contact form.

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