Alabama Business Opportunities

The State Capitol Building in Montgomery, completed in 1851
The State Capitol Building in Montgomery, completed in 1851[1]

A Quick Glance at Alabama

Alabama, whose nickname is the Yellowhammer State, first obtained its statehood in 1819. With a population of 4,833,722 people, Alabama is the twenty-third most populated state in the United States.

If you are considering starting your new business in Alabama, you might want to look into one of Alabama's top three most populous cities - Birmingham, Mobile or Montgomery (which is also the state's capital).

Top Industry

The largest industry in the state of Alabama is ambulatory health care services.

  • The gross domestic product (GDP), of this industry, is roughly $7.6 billion and accounts for 3.7% of Alabama's GDP.
  • Ambulatory health care services also employs 4.1% of Alabama's private workforce.

Small Businesses

In the United States, the more than 600,000 plus franchised small busineeses account for 40% of all retail sales and provide jobs for some 8 million people. According to the Small Business Administration (SBA), their standard definition of what constitutes as a small business includes a maximum of 500 employees or operations with and/or up to $7 million in revenue, depending on the industry.

  • There are 772,214 small businesses, in the state, of Alabama.
  • Small businesses in Alabama, make up 35.2% of the state's private workforce.

State and Local Taxes

Listed below are the state and local taxes, for the state of Alabama, and how they rank against other states in the U.S.

State Tax Rate Avg. Local Tax Rate Combined Rate Combined Rank* Max Local Tax Rate
4% 5.01% 9.01% 4 7%
*Combined Rank is rank from highest to lowest tax percentage

California has the highest state tax rate in the United States at 7.25%, but Lousinana has the highest combined tax rate, overall, at 9.98%. Delaware, Montana, New Hampshire and Oregon share the spot for lowest combined tax rates at 0%.

Additional Information

If you need additional information about how to start a business in Alabama, their official state page might be a good place to start. If you are looking to own your own established franchise in Alabama, we have collected a comprehensive list of companies that are actively looking to expand in Alabama, for you to explore.


  1. By Carol M. Highsmith, CC BY 2.0
  3. Comparison between U.S. states and countries by GDP (nominal) from Wikipedia
  4. Largest Industry in Each State from 24/7 Wall St.
  5. 2017 Small Business Profiles for the States and Territories from the U.S. Small Business Administration
  6. Small Business Trends from the U.S. Small Business Administration
  7. Civilian Labor Force and Unemployment by State from the U.S. Bureau of Labor Statistics
  8. State and Local Sales Tax Rates in 2017 from the Tax Foundation

City and County Level

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