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Here's everything you need to know about operating a business in the Sunshine State.
Running a business in Florida involves traversing a unique set of economic and regulatory landscapes. Each Florida business opportunity offers significant advantages and some distinct challenges. Whether you’re relocating your business to Florida or starting a new venture, this guide will equip you with the knowledge to navigate the Sunshine State’s business environment.
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By all accounts, Florida’s economy is booming. In its 2024 state rankings, U.S. News & World Report named Florida the No. 1 state in the U.S. for economy, citing factors like its strong business environment and GDP growth. However, the Bureau of Economic Analysis ranks it fourth in terms of total GDP — a still-robust ranking. Additionally, BEA data shows that in the first quarter of 2024, Florida’s economy grew by 3 percent, while the United States as a whole grew by 1.4 percent.
Small businesses are an essential part of Florida’s economic landscape. According to the U.S. Small Business Administration (SBA), small businesses comprise 99.8 percent of all Florida businesses and employ 3.6 million employees — approximately 40 percent of the state’s workforce. Notably, according to FloridaCommerce, 163,992 new businesses formed in Florida in 2024, the most of any state.
Per the SBA Florida profile data cited above, these are the top six industries for small business employment in Florida:
According to the U.S. Bureau of Labor Statistics (BLS), Florida’s unemployment rate was 3.3 percent as of July 2024, slightly lower than the national average of 4.3 percent.
These positive economic indicators are encouraging for the state, but they only tell part of the story. To understand the opportunities and challenges facing entrepreneurs and small business owners in Florida, we’ll need to examine several factors more closely.
Florida is generally known as a state with a low overall tax burden. It is one of nine states without a personal income tax, making it a highly attractive location if your business legal structure makes you a pass-through entity, such as a limited liability company (LLC) or S corporation.
The state sales tax is middle-of-the-road on taxes for rented or purchased goods at 6 percent, but when you include local option taxes, the state’s average sales tax is 7 percent. Necessities such as groceries and medicines — and business expenses like new machinery and equipment — are exempt from sales tax, and Florida has a sales tax holiday from the end of July to mid-August when many families are doing back-to-school shopping.
Corporations in Florida must file a corporate income tax return but at a low top rate of 5.5 percent. In addition, unemployment insurance taxes are low at 2.7 percent for new employers; property taxes are also relatively low, although rates vary by county.
“Florida doesn’t have a state income tax or some of the other nuisance business taxes found in other states,” noted Robert Livingstone, founder of IdealCost.com.
Some business owners are uprooting their businesses to move to Florida due to the small-business tax advantages. Daniel DiGiaimo, CEO and president of Baker Street Funding, relocated his company from New York City to Florida specifically to reduce its tax burden. (Read our guide on running a business in New York to compare taxes and other considerations.)
“[One reason we moved to Florida] is because of the tax benefit,” DiGiaimo explained. “Moving from a city with one of the highest tax rates in the country to a state with no state tax is a huge savings both personally and professionally.”
Florida can afford to keep tax rates low because it relies on hospitality tax revenue from its tourism businesses, including theme parks, hotels and resorts. Local governments may also levy additional tourism taxes.
Entrepreneurs also report sufficient access to capital for starting and growing their businesses in Florida. The state provides access to significant investment capital from venture capitalists and angel investors.
“The idea that you have to be in huge metropolitan areas like New York or Silicon Valley for access to capital is overblown,” explained Andy Latimer, founder and CEO of Bluewater Media. “The stable business environment in Florida makes business here ripe for investment. Also, the walls of access to large markets have been broken down by technology.”
Florida hasn’t always attracted private investment capital. In recent years, however, investors have turned their eyes to the Sunshine State. Today, Florida is home to several economic hubs considered incubators for startups and innovation. For example, the Florida High Tech Corridor Council supports high-tech industries with investments, resources and initiatives across 23 Central Florida counties.
“Whereas Florida used to be a state largely excluded from the startup and VC scene, things have changed considerably over the last five years,” explained Zohar Pinhasi, CEO of MonsterCloud. “I now see it as a promising and cost-effective location for buzz-worthy startups.”
The cost of living in Florida is slightly higher than the U.S. average across the board, but it remains more affordable than other major economic hubs in the country. This means entrepreneurs can plug into a humming business landscape at a reasonable cost, though housing and transportation costs are somewhat pronounced.
“The cost of living and operating a business is still generally significantly lower than in New York, Chicago, D.C., San Francisco or LA,” Pinhasi said.
Prices fluctuate based on locality, of course. For example, Miami tends to be more expensive than other major metropolitan areas in the state, such as Jacksonville or Tampa Bay. For businesses with physical locations, real estate costs vary widely, so it’s important to research local markets.
Florida’s hourly minimum wage is $12 as of September 2023, but it will increase by $1 each year until it reaches $15 in September 2026. Florida labor laws do not mention overtime payment requirements, but federal overtime laws apply.
No Florida laws require employers to provide employees with severance pay if someone is let go. There are also no state laws requiring employers to provide employees with vacation benefits or sick leave, either paid or unpaid.
Florida — which falls in the subtropical to tropical temperature zone — is widely known as a tourist state. With that reputation comes a significant seasonality that impacts many businesses.
When the weather is nicer in the northern states in spring and summer, fewer tourists and snowbirds spend their time and money in Florida. That means business slows significantly for companies that operate in Florida year-round.
Running a business in Florida means preparing for the lean months by keeping operations efficient and wisely allocating revenue from the busy season, typically regarded as the time between Thanksgiving and Easter. However, businesses can take advantage of the more available and less expensive labor that comes in the summer months, as people hired by seasonal businesses during tourist season may find themselves without a job.
“If you own a corner store or restaurant or daily staples business dependent on foot traffic, your small Florida business from Thanksgiving to Easter will be packed with snowbirds clamoring for everything [they] forgot back in Jersey or ‘the City,'” explained Baron Christopher Hanson, licensed commercial real estate advisor at John Burpee & Associates, Inc. Commercial Real Estate. “If you are looking to open an aging healthcare or routine medical practice, be prepared to be busy from November to May, yet very slow in the summer and hurricane months.”
Beyond the seasonal downturns, hurricane season also poses a threat to businesses. Customers regularly evacuate to avoid hurricanes, and the storms represent a disaster risk that could result in significant damage to brick-and-mortar businesses.
“Hurricane season brings a lot of uncertainty to the market,” Livingstone cautioned. “When we need to reach current and prospective clients during this time, we aren’t always successful on our first and second attempts. South Florida has escaped mostly unscathed during the last few years, but often we see people prepare and evacuate due to past experience.”
That said, hurricane season can be a boon for certain types of businesses, such as roofing and construction companies, hardware stores, and grocery stores.
Florida’s relatively low unemployment rate is an indicator of its strong economic performance, but this statistic comes with a drawback: Hiring new employees can be a competitive and costly process. Moreover, as in many other parts of the country, Florida has an employee-centric labor market, making it difficult to retain existing talent. Other companies are prepared to offer lucrative compensation packages to lure the best candidates.
Unemployment is projected to rise to 4.3 percent in 2026 and then decline slightly by 2028, and job growth in Florida is expected to outpace the overall U.S. economy. A steady influx of new job seekers is expected to continue moving to Florida. Southeast Florida, in particular, has a large workforce, followed by the Tampa Bay region.
While there are several top universities in Florida from which businesses can easily recruit, high salaries and wages, attractive benefits packages and job perks like remote work and paid time off (PTO) policies are standard tools for attracting workers. Businesses should be prepared to compete to secure the most skilled or experienced employees in their industry.
If you’re a small-business owner in Florida seeking help moving forward, here are a few organizations that can serve as valuable resources.
The Florida Department of Economic Opportunity is a government agency that can help you recruit employees and find tax credits and incentive programs. It will also inform you about labor regulations in the state.
Select Florida, formerly called Enterprise Florida, is a public-private partnership that provides research on Florida’s business growth opportunities and news focusing on trade, export development and defense.
SCORE’s volunteer business professionals and expert mentors counsel and guide entrepreneurs looking to start or expand their businesses. The services and workshops are free and volunteer-driven.
Here are some of the SCORE chapters in Florida:
The SBA 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.
Florida hosts multiple development centers for small businesses. Each is dedicated to supporting the development and retention of small businesses, helping entrepreneurs do everything from crafting business plans to navigating the state’s tax code. Contact your region’s Small Business Development Center to learn more.