Starting a Small Business in California

Welcome to the Small Business Startup California Franchise Directory! Here, you’ll find everything you need to begin your journey to business ownership in The Golden State. If you’re thinking about starting a small business in California, read on for an overview of the state economy. Afterward, explore business opportunities and franchises for sale with our California Franchise Search Tool.

California Industry Trends

If an industry is performing well, business opportunities within it are often worth exploring. Begin your market research with this list of the California economy's largest industries in 2022. Afterward, take your research one step further by investigating niche markets and B2B opportunities within one of these top revenue-generating industries.

1. E-Commerce & Online Auctions (Revenue: $189.9 billion)
2. Drug, Cosmetic & Toiletry Wholesaling (Revenue: $186.6 billion)
3. Hospitals (Revenue: $178.5 billion)
4. Electronic Part & Equipment Wholesaling (Revenue: $178.2 billion)
5. Internet Publishing & Broadcasting (Revenue: $149.2 billion)
6. Software Publishing (Revenue: $142.9 billion)
7. New Car Dealers (Revenue: $141.2 billion)
8. Public Schools (Revenue: $134.5 billion)
9. Health & Medical Insurance (Revenue: $131.5 billion)
10. Automobile Wholesaling (Revenue: $126 billion)

California Sector Statistics

When starting a small business in California, gross domestic product (GDP) is another tool that entrepreneurs can use to make investment decisions. Generally, a steadily rising GDP means that people are spending more money and more jobs are being created.

The three sectors that contributed most to California’s GDP in 2022 were Media Production & Distribution; Manufacturing; and Real Estate, Rentals, & Leasing. Combined, these three sectors represented 44.5% of the state’s GDP. In 2022, the 10 sectors that contributed most to California’s GDP included:

1. Media Production & Distribution (Value: $458.2 billion* | Annual growth: 12.1%)
2. Manufacturing (Value: $427.1 billion* | Annual growth: 7.5%)
3. Real Estate, Rentals & Leasing (Value: $343.4 billion* | Annual growth: 1.1%)
4. Professional, Scientific & Technical Services (Value: $314.1 billion* | Annual growth: 6.4%)
5. Healthcare & Social Assistance (Value: $189 billion* | Annual growth: 3.5%)
6. Finance & Insurance (Value: $156.4 billion* | Annual growth: 11.6%)
7. Retail Trade (Value: $152.2 billion* | Annual growth: 1.6%)
8. Wholesale Trade (Value: $144.1 billion* | Annual growth: 0.1%)
9. Administration, Business Support & Waste Management Services (Value: $94.6 billion* | Annual growth: 7.5%)
10. Construction (Value: $92 billion* | Annual growth: 1.5%)
11. Accommodation & Food Services (Value: $71 billion* | Annual growth: 5.6%)
12. Management of Companies & Enterprises (Value: $60.5 billion* | Annual growth: 7.0%)
13. Agriculture, Forestry, Fishing & Hunting (Value: $48.8 billion* | Annual growth: 16.3%)

*Approximately

California Population Statistics

A growing population often means greater demand and a steady flow of new customers. If you are undecided about the location of your new business, start by investigating population statistics. Afterward, take your research a step further by exploring population demographics. By doing so, you can decide whether a location is a good match for your target market.

In 2022, counties with the highest populations in California included:

1. Los Angeles (Population: 9.8 million | Annual growth rate*: -0.5%)
2. San Diego (Population: 3.3 million | Annual growth rate*: 0.1%)
3. Orange (Population: 3.2 million | Annual growth rate*: -0.1%)
4. Riverside (Population: 2.5 million | Annual growth rate*: 1.0%)
5. San Bernardino (Population: 2.2 million | Annual growth rate*: 0.6%)
6. Santa Clara (Population: 1.9 million | Annual growth rate*: -0.5%)
7. Alameda (Population: 1.7m million | Annual growth rate*: N/A)
8. Sacramento (Population: 1.6 million | Annual growth rate*: 0.6%)
9. Contra Costa (Population: 1.2 million | Annual growth rate*: 0.2%)
10. Fresno (Population: 1.0 million | Annual growth rate*: 0.5%)
11. Kern (Population: 909,400 | Annual growth rate*: 0.4%)
12. San Francisco (Population: 856,300 | Annual growth rate*: -0.6%)
13. Ventura (Population: 837,200 | Annual growth rate*: -0.3%)
14. San Joaquin (Population: 783,900 | Annual growth rate*: 1.0%)
15. San Mateo (Population: 750,500 | Annual growth rate*: -0.5%)
16. Stanislaus (Population: 553,400 | Annual growth rate*: 0.3%)
17. Sonoma (Population: 483,900 | Annual growth rate*: -0.6%)
18. Tulare (Population: 473,500 | Annual growth rate*: 0.5%)
19. Solano (Population: 448,900 | Annual growth rate*: 0.2%)
20. Santa Barbara (Population: 444,600 | Annual growth rate*: N/A)

*From 2017 to 2022.

California Business Opportunities

We hope this snapshot of the California economy helps as you investigate business opportunities in The Golden State! Starting a small business in California is an exciting journey, and we know you’re probably eager to get started. But remember, take your time to explore all your options. While you’ll always have the “opportunity” to start your own business, sometimes, it makes more sense to invest in an opportunity that already exists. These are called “Franchise Opportunities,” and they offer several benefits, including the recognition of a well-established brand and a proven track record of success.

To learn more, start by exploring franchise opportunities in California, below!