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Small Business

The Most Important Industries in America’s Largest Cities

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Most important industries
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When starting a new business, you could build your venture around industries that are thriving in your area. Some cities are known for certain types of companies, and you may want to enter a market where businesses are already succeeding.

But what about opportunity for employees in those industries? The highest-paying jobs in the largest industries can be the most difficult to land. Ideally, a city’s top-paying industry would present plenty of lucrative job options for residents.

MagnifyMoney researchers determined the most prominent industries in the country’s 50 largest metro areas and analyzed how well those industries pay compared with the cost of living. In many instances, industry density doesn’t equate to more money in workers’ pockets.

When we plotted all 50 cities across 20 industries, retail jobs, for example, appear relatively plentiful but tend to be lower paying. High-paying utilities jobs, on the other hand, are among the scarcest positions.

Key findings

  • New Orleans has the top-paying industry relative to local cost of living: agriculture, forestry, fishing and hunting. Monthly payroll per employee in this field is roughly 160 times median monthly housing costs or 13.3 times median annual housing costs here. However, this industry has a small presence in the area, just 0.16% of all establishments.
  • Washington, D.C. takes the top spot as the metro area with the highest concentration of one industry. In the nation’s capital, nearly 22% of all establishments qualify as part of the professional, scientific and technical services industry.
  • Patterns emerge despite geographic differences: Retail makes up nearly 13% of establishments in each of the 50 cities and pay is usually low. The information industry and the management of companies and enterprises industry leaves a small footprint in cities but pays its workers well.
  • Of all industries in the study, only the professional, scientific and technical services industry shows significant variation from metro to metro. While it makes up nearly 22% of all establishments in D.C., as we noted earlier, it claims just 8.7% of establishments in Riverside, California.

Industries that pay the most based on local costs

1. New Orleans – Agriculture, forestry, fishing and hunting

Although agriculture, forestry, fishing and hunting makes up just 0.16% of all establishments in New Orleans, the industry offers employee pay that’s 159.8 times median monthly housing costs.

New Orleans has a long history of farming and agriculture in the region, thanks to rich soil resulting from years of flooding. To shorten supply chains in the city and build the local food economy, the New Orleans Food and Farm Network connects urban and regional farmers with restaurants, stores and farmers markets. Louisiana ranks No. 33 in the United States for farm cash receipts, about $3 billion, a significant drop from its 2012 peak of nearly $4 billion. The state issued more than 2.5 million recreational hunting, fishing and trapping licenses in fiscal year 2017, the most recent data available.

2. Cincinnati – Management of companies and enterprises

The management of companies and enterprises sector is made up of businesses that own equity in other companies and influence management decisions. In Cincinnati, this industry comprises 1.24% of all businesses in the metro area. These companies provide employee pay that’s 139.2 times median monthly housing costs.

The Cincinnati housing market includes counties in Ohio, Kentucky and Indiana, areas that support sectors such as professional and business services, financial activities, and educational and health-related services. Retail dominates this area’s economy — 13.7% of establishments.

3. Houston – Management of companies and enterprises

Not far behind Cincinnati, payroll per employee in Houston’s management of companies and enterprises sector is 139 times median monthly housing costs. But the industry accounts for just 1% of businesses in the area.

Houston is often thought of as a hub for the oil and gas industry, but our research showed professional, scientific and technical services is the most prolific industry in the city. To keep up, the oil and gas sector is reportedly incorporating new technology, like fintech and artificial intelligence solutions, from experts outside the field.

Industry density in major metro areas

1. Washington, D.C. – Professional, scientific and technical services

The U.S. capital’s economy is dominated by the professional, scientific and technical services sector — 21.8% of all businesses, the highest rate on our list. Average payroll per employee in that industry is quite high at $102,331 but an elevated cost of living makes that figure less impressive. Monthly payroll per employee is 58.6 times median monthly housing costs.

Jobs in the professional, scientific, and technical services sector include accounting, legal representation, engineering, computer services, advertising and consulting.

2. St. Louis – Health care and social assistance

St. Louis is slightly behind Washington, D.C., with 21.6% of all companies falling in the health care and social assistance industry. Payroll per employee in the industry is 45.6 times median monthly housing costs.

Hospitals support more than 116,000 jobs in St. Louis, according to research from the Missouri Hospital Association. Hospitals in Missouri contribute more than $26 billion in gross state product.

3. San Jose – Professional, scientific and technical services

In San Jose, 18.4% of businesses fall into the professional, scientific, and technical services sector. Jobs in the industry pay 66.9 times more than the median monthly housing costs in the area.

San Jose is the country’s most expensive housing market, where the median cost of a single-family home is $1.1 million. Rent is expensive, too — the city says renters must earn $108,920 per year to afford the average effective monthly rent of $2,723 for a two-bedroom apartment. Our study found that the highest-paying jobs belonged to those in the information industry with employee payroll 113.6 times higher than median housing costs.

Methodology

In order to find the highest paying industry and most common industry in every metro area, researchers analyzed data from the U.S. Census Bureau. To find the highest paying industry in every metro area, researchers looked at the ratio of payroll per employee to local median monthly housing costs. To find the most common industries, researchers divided the number of industry establishments by the total number of establishments.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Melissa Wylie
Melissa Wylie |

Melissa Wylie is a writer at MagnifyMoney. You can email Melissa at [email protected]

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Small Business

How to Determine If Your Business Is a ‘Small Business’

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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To be considered for loans and other assistance from the U.S. Small Business Administration, your company would need to meet the SBA’s definition of a small business.Certain government contracts and loan programs from the SBA are reserved for small businesses. To ensure the right companies receive these opportunities, including the relatively low interest rates that come with its loan programs, the SBA enforces eligibility requirements.

The SBA’s size standard is based on employee count and average annual receipts. The current averaging period is three years, although the SBA recently proposed a rule change that would allow businesses to average revenues from the past five years. The SBA’s size standard indicates the largest size that a business could be to remain eligible for SBA loans and federal contracting programs.

“What they have is conditions on how much a business can make as far as revenue in order to qualify for an SBA-guaranteed loan,” said Kyle Bayliss, regional director of the Maryland Small Business Development Center. Across the country, SBDCs assist business owners through a partnership with the SBA.

Continue reading to find out whether your business is a small business according to SBA guidelines, and what that means for your company.

The SBA’s definition of a small business

To be classified as a small business, your company would need to meet or fall below the SBA’s maximum annual revenue or employee count. The SBA sets specific standards for individual industries, so the exact requirements would depend on the type of business you run.

The SBA outlines standards for each industry listed in the North American Industry Classification System, or NAICS. The SBA provides a lengthy table describing employee and revenue limits for each industry, organized by NAICS code. You can find the table here.

Revenue limits range from $750,000 to $38.5 million, depending on industry, and employee requirements span 100 to 1,5000 employees. As long your business falls below its designated revenue or employee threshold, it could be considered a small business in the eyes of the SBA.

All workers, including those employed on a full-time, part-time and temporary basis, contribute to your overall employee count. If you acquired another business, employees from that business would also contribute to your total. The SBA takes an employee count on a 12-month basis, or counts employees for each pay period if you have not yet been in business for a full year.

The SBA’s definition of a small business incorporates companies that are far larger than the average small business seeking help from the Maryland SBDC, Bayliss said. An SBA small business may be larger than most would think. Businesses that support oil and gas operations, for instance, can have annual revenue up to $38.5 million.

Furthermore, the SBA requires that small businesses also meet the following requirements to be eligible for funding:

  • For-profit, officially registered and operating legally
  • Physically located in the U.S. and operates in the U.S. or its territories
  • Invested equity from the business owner
  • Sound business purpose
  • Ability to repay any debt

What it means to be a “small business”

Businesses that meet the SBA’s small business criteria can apply for SBA loan programs and federal contracting assistance. “The lending part of it is a really big help,” Bayliss said.

Your small business could be eligible for the following SBA-backed loans:

7(a) loan program: The SBA’s most popular program provides general-purpose loans for small business owners. You could borrow up to $5 million with repayment terms between seven and 25 years. Specialty loans within the 7(a) programs are available for certain needs like smaller loan amounts, export working capital or express time to funding.

CDC/504 loan program: Small businesses looking to acquire fixed assets, like buildings, land or machinery, can borrow funds to finance their purchase. There’s no set limit on loan size, though Certified Development Companies must administer all 504 loans. The SBA typically provides 40% of the total cost while a CDC contributes 50%. The business owner would need to provide the remaining 10%. The assets being purchased would serve as collateral on the loan.

Microloan program: For smaller funding needs, the SBA microloan program provides up to $50,000 to small businesses that have trouble qualifying for traditional business loans. Repayment terms for microloans typically max out at six years. SBA microloans are generally reserved for women, low-income, veteran and minority business owners.

SBA-designated small businesses can also apply for federal contracts through the following program:

8(a) Business Development program: The SBA limits competition for certain government contracts to small businesses that participate in the 8(a) program. The goal is to help disadvantaged businesses win valuable contracts. To be eligible for the program, an owner who is economically or socially disadvantaged must control at least 51% of the business. The owner must also have a personal net worth of $250,000 or less, $4 million or less in assets or $250,000 or less in average adjusted gross income for three years.

Additionally, business owners must show good character and potential to successfully perform. If approved for the 8(a) program, you could compete with similar businesses for sole-source contracts. You could also receive assistance such as business training, counseling or marketing help from a mentor who is also participating in the program.

The SBA 8(a) program provides a leg up for small businesses that may not otherwise win big contracts, Bayliss said. Women and minority entrepreneurs particularly benefit from this program, he said.

“Actually doing government contracting, it’s really hard, especially for small businesses,” Bayliss said.

Other benefits of meeting the SBA’s size standard

SBA-approved small businesses could have access to additional assistance, most notably resources set aside for women and veteran entrepreneurs.

For instance, the SBA’s Women-Owned Small Businesses Federal Contracting program reserves federal contracts for qualified women-owned businesses. It’s like the 8(a) program, but specifically designed to give women entrepreneurs increased access to federal contracts.

Organizations such as the National Women’s Business Council and the Association of Women’s Business Centers also provides resources and opportunities for women-owned small businesses through partnerships with the SBA. To access resources for women-owned small businesses, you would need to receive certification from the SBA. You can apply for certification here.

Eligible veteran-owned small businesses could also access training programs and specialized loans through the SBA Office of Veterans Business Development. Programs like Boots to Business and the Veteran Federal Procurement Entrepreneurship Training Program teach veterans the skills to successfully run a small business.

The SBA also guarantees loans for veterans through the SBA Veterans Advantage program. Additionally, the Military Reservist Economic Injury Disaster Loan Program provides funding to businesses with employees who have been called to active duty.

Becoming certified for these programs could be a lengthy process. The SBA would ask you to submit information about your business, such as organizing documents, past financial statements and a business plan, as well as personal information like income statements and proof of citizenship.

As an SBA small business, you may be able to qualify for government-sponsored business grant programs as well. Both the Small Business Innovation Research Program and Small Business Technology Transfer Program are tied to the SBA, and grant recipients would likely need to meet SBA size standards.

The bottom line

The SBA provides countless resources to business owners across the country, but there’s a catch — you have to qualify as a small business according to the SBA’s standards.

Fortunately, these requirements are broad and take your specific industry into consideration. You would need to fall below the threshold of number of employees or annual revenue that the SBA sets for your industry. The limit on employees ranges from 100 to 1,500 workers, while revenue maximums range from $750,000 to $38.5 million.

If your business is within the SBA’s parameters, you could apply for a number of contracting and business loan programs. You could also receive additional resources set aside for underserved business owners, such as women and veteran entrepreneurs.

Your local small business development center could help you determine which programs your business may be eligible for and provide assistance with any applications. Be sure to calculate the correct size of your business before applying for SBA resources.

This article contains links to LendingTree, our parent company.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Melissa Wylie
Melissa Wylie |

Melissa Wylie is a writer at MagnifyMoney. You can email Melissa at [email protected]

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Small Business

Quicken vs. QuickBooks: Which Should You Choose?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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To successfully grow your small business, you need full knowledge of your company’s finances. You may be considering accounting software from QuickBooks or Quicken to manage your books.

QuickBooks’ offerings are designed for small businesses, and although Quicken primarily focuses on personal finance, Quicken’s Home and Business software could be a good option for managing personal and professional finances in one place.

We’ll review Quicken Home and Business software compared with QuickBooks to help you choose which accounting program would be best for your small business.

Quicken and QuickBooks at a glance

Here’s a quick look at how Quicken Home and Business and QuickBooks Online compare.

 Quicken Home and BusinessQuickBooks Online
Software format
Desktop software; Ability to sync with online Quicken accountsCloud-based software
SubscriptionAnnual subscriptionMonthly subscription
Price$89.99/year for the first year; $99.99/year for the following yearsLowest tier is $10/month for first three months; $20/month for the following months
Free trialN/A30-day free trial
Multi-user capabilitiesN/AUp to 25 users, depending on subscription tier
PayrollNot includedNot included; Available as an add-on feature

Quicken vs. QuickBooks: The fundamentals

Quicken and QuickBooks both provide basic accounting services for small business owners, though there are differences in what each company offers. We’ve compared Quicken’s Home and Business program with QuickBooks Online, as it’s the more popular product from QuickBooks. Both programs also have comparable price points. Here’s how they stack up:

Accessibility

Quicken: Quicken Home and Business is a desktop software program available for Windows operating systems. However, you can sync your account to the Quicken Cloud to access your data through Quicken on the Web, which is a companion app for Quicken desktop products. The Quicken Cloud does not back up files, so you couldn’t rely on the cloud to restore lost data.

QuickBooks: QuickBooks Online is a cloud-based financial management software. And unlike Quicken, QuickBooks saves your data on two hard drives and performs an automatic backup each night. You could access your QuickBooks account from any computer or mobile device with an internet connection. QuickBooks also offers a desktop version of its software for businesses with a larger budget and stationery accounting needs.

Accounting capabilities

Quicken: You can track your personal and business transactions separately with Quicken Home and Business. The software lets you view your business account balances, transactions, budgets and spending trends. You can also search your transaction history, and check the performance of your personal investments.

Additionally, Quicken Home and Business allows you to track transactions related to rental property. You can track property value, bank accounts, tenant lists, income and expenses related to your rental properties within your Quicken software, something QuickBooks Online doesn’t include. You can also store tenant agreements, manage rent and security deposits and send payment reminders.

If you sync your data to Quicken on the Web, your information will remain up to date across your desktop, web and mobile devices. Quicken Home and Business generates reports, such as profit and loss statements. You can also create custom reports and custom invoices that include payment links. Quicken Home and Business does not include a payroll feature, however, and does not advertise an option to add payroll as an extra feature. Quicken also does not let you add extra users. You would be the only user who could access your data through the desktop software and Quicken on the Web.

QuickBooks: There are several tiers of service for QuickBooks Online, but all of them allow business owners to track income and expenses, organize receipts, send invoices and accept payments. You can also run basic financial reports and send estimates. The advanced tiers let you add users, track inventory and manage and pay bills. Like Quicken, QuickBooks does not include payroll, but you would be able to add the feature for an extra cost, starting at $18 per month.

Although QuickBooks does not include features specifically for managing personal finances like Quicken does, QuickBooks does offer a Self-Employed version of QuickBooks Online that separates business and personal expenses. The program starts at $5 per month for the first three months. QuickBooks Online automatically syncs your data across multiple devices and lets you grant access to an accountant who could then review your books online. Because Quicken doesn’t allow multiple users, you wouldn’t be able to give your accountant similar access with Quicken Home and Business.

Price

Quicken: Even though you would need to download the software, Quicken requires a yearly payment for the service. New customers can pay the promotional price of $89.99 for the first year, then pay the standard price of $99.99 for subsequent years. Quicken advertises a 30-day money-back guarantee if the software doesn’t cut it for your business.

QuickBooks: The QuickBooks Online pricing model is similar, though you would need to pay for a monthly subscription rather than an annual subscription. QuickBooks Online is available at several price points depending on your accounting needs. For new customers, each plan is available at a 50% discount for the first three months, and the cost then doubles when the promotional period ends.

  • Simple Start: $10/month; includes basic income and expense tracking and the ability to send invoices and generate reports.
    • First year: $210
  • Essentials: $20/month; includes the same features as Simple Start, as well as bill management, time tracking and the option to add up to three users.
    • First year: $420
  • Plus: $35/month; includes the same features as Essentials, plus inventory tracking, project profitability reports, contractor management and the option to add up to five users.
    • First year: $735
  • Advanced: $60/month; includes the same features as Plus, in addition to faster invoicing, bill payment and management, advanced reporting and the option to add up to 25 users with custom permissions.
    • First year: $1,530

If you want to add payroll, the feature would also be 50% off for the first three months. Self-service payroll would cost an additional $18 per month, plus $4 per employee per month. Full-service payroll would cost $40 per month, plus $4 per employee per month. A free 30-day trial is also available for all QuickBooks Online options.

Quick comparison: Quicken charges a one-time yearly subscription fee starting at $89.99 per year for new customers, while QuickBooks charges per month. QuickBooks Online Simple Start, the lowest-tier offering, starts at an introductory rate of $10 per month for three months. The price then jumps to $20 per month. Your first year of QuickBooks Online Simple Start could cost $210. Though QuickBooks may be pricier than Quicken, you could have access to more features.

Which is right for your business?

Quicken’s primary product is personal finance management software, and the company’s business offering includes personal finance tools as well. If you prefer to keep your personal and business financial activity in one file, Quicken Home and Business could help you stay organized.

You would need to download Quicken software to your desktop computer, which could limit access to your files. However, Quicken does provide cloud services so you could access your data through its Quicken on the Web application. You’d need to set that up separately from your desktop software.

On the other hand, QuickBooks Online is cloud-based software that would let you manage your business finances from any device with an internet connection. QuickBooks Online also offers more business-specific features, like the ability to track sales and organize receipts. These features contribute to QuickBooks’ overall cost, which is high compared with Quicken. But if you have room in your budget, QuickBooks may provide more in-depth accounting solutions for your business.

Small business owners could also manage their personal finances using the more affordable Self-Employed version of QuickBooks Online. The accounting features are limited for the Self-Employed plan, though, and it may not be useful for larger companies with advanced needs.

Whether you choose Quicken or QuickBooks for your small business accounting needs, you’re not locked in to your decision. Quicken data can be converted into QuickBooks Online files – and the other way around – if you want to switch.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Melissa Wylie
Melissa Wylie |

Melissa Wylie is a writer at MagnifyMoney. You can email Melissa at [email protected]