Comparable baseline
Alabama at a glance
| Population | 5,193,088 | July 1, 2025; +3.2% since 2020 |
|---|---|---|
| Business applications | 7,731 | July 2026, seasonally adjusted |
| Trailing-12-month applications | 77,265 | 1,487.8 per 100,000 residents |
| High-propensity applications | 1,663 | 21.5% of July applications |
| Projected employer formations | 361 | Census four-quarter projection for July's cohort |
| Small businesses | 465,610 | SBA 2025 profile; underlying employer and nonemployer data are from 2022 |
| Small-business employment | 816,850 | 46.0% of private employment in 2022 |
| Employer establishments | 105,720 | 2023 County Business Patterns |
Application rankings cover the 50 states and use unrounded figures. Applications are qualifying EIN filings, not confirmed business openings. Measurement years differ because federal datasets are released on different schedules.
Alabama entered the second half of 2026 with clear momentum in business applications. The state recorded 7,731 applications in July, up 27.7% from July 2025 and 15.1% from June. More importantly, the rise was not confined to one month: the 77,265 applications filed from August 2025 through July 2026 were 24.0% above the preceding 12 months.
Those figures measure qualifying applications for Employer Identification Numbers, not businesses confirmed to have opened. They are most useful as an early signal of business-starting activity.
Growth is strong; the application level is not exceptional
Alabama ranked 11th among the 50 states for trailing-year application growth, but 30th for trailing-year applications per resident. July told a similar story: Alabama ranked 21st in raw application volume and 28th at 148.9 applications per 100,000 residents.
Alabama is not producing applications at one of the country’s highest rates; its filing activity is rising quickly from a moderate level. Census counted 3,364 applications in July 2019, compared with 7,731 in July 2026—an increase of 129.8%.
Population alone does not account for that difference. Alabama’s resident population grew 3.2% from the 2020 Census base to July 2025, reaching about 5.19 million. The population and application periods are not identical, and the comparison does not establish a cause. It does show that recent application growth is far larger than the change in headcount.
The composition of July’s filings adds useful context. Census classified 1,663 applications, or 21.5%, as high propensity, meaning they had characteristics historically associated with becoming employer businesses. That share ranked 47th among states. Census separately projected 361 employer formations from July’s application cohort within four quarters. Both measures are forward-looking indicators; neither says how many Alabama businesses actually opened in July.
Most small businesses have no paid employees
The SBA’s 2025 Alabama profile reported 465,610 small businesses, based on 2022 federal data. That total combines two different groups: 75,382 small employer firms and 390,228 nonemployer businesses.
Nonemployers—businesses with no paid employees—made up 83.8% of the total, the eighth-highest share among states. That makes the distinction between “small businesses” and “small employers” particularly important in Alabama. A self-employed consultant and a manufacturer with 100 workers can both appear in the published small-business count, but they contribute very differently to payroll employment.
Small firms employed 816,850 people in 2022, equal to 46.0% of Alabama’s private-sector employment. That share ranked 31st among states. Taken together, the figures describe a business base with many businesses without paid employees alongside a substantial, but not unusually dominant, small-employer workforce.
Manufacturing accounts for 14.9% of covered private jobs
Manufacturing accounted for 272,338 jobs, or 14.9% of employment covered by 2023 County Business Patterns. Its share was about 1.69 times the 50-state share. Health care and social assistance was close in absolute size at 268,162 jobs, and retail trade employed 238,329.
The state’s private employment was not dominated by a single county. Jefferson County held 18.7% of covered jobs, followed by Madison County at 10.5% and Mobile County at 8.7%. Together they accounted for 37.9%, leaving Alabama with several substantial employment centers rather than one overwhelming county market.
These industry and county figures describe where payroll jobs were located in 2023. They do not show which industries or counties produced the recent rise in applications.
Official starting points for an Alabama business
- Entity filings: The Alabama Secretary of State’s Business Services division provides entity forms, filing access, and business-name information.
- State taxes: The Department of Revenue’s business registration page directs businesses to My Alabama Taxes for applicable accounts.
- Licenses: The department’s Business and License division covers state and county privilege licensing. Municipal and profession-specific requirements may be separate.
- Business assistance: The Alabama SBDC office directory connects owners with no-cost, confidential counseling across the state.
Source and calculation note
Application figures use the Census Bureau’s July 2026 Business Formation Statistics release. July comparisons use the seasonally adjusted series; trailing-year totals sum unadjusted applications from August 2025 through July 2026 and compare them with August 2024 through July 2025. Per-capita rates use the Census July 1, 2025 population estimate. Small-business counts and employment use the SBA 2025 profile’s 2022 components. Industry and county shares use 2023 County Business Patterns employment. BizFacts calculated percentage changes, rates, shares, and 50-state ranks from those sources, all retrieved September 3, 2026.