A Wisconsin Policy Forum study released Thursday suggested that small business growth in Wisconsin pales in comparison to small business establishment in the state from 2020 to 2025.
The study, conducted using data from the U.S. Bureau of Labor Statistics, the U.S. Census Bureau, and YourEconomy (a national data series developed by the Universities of Wisconsin Office of Business and Entrepreneurship), found that the number of businesses in the state with fewer than 500 employees established within those years grew 20.2% by volume, outpacing growth from the decade prior.
The ability of those businesses to scale, however, is stunted.
Wisconsin’s economy is seeing little growth in businesses with 100 employees or more, but those with 10 employees or less, dubbed microbusinesses, continue to grow in volume in the state.
Credit: U.S. Bureau of Labor Statistics U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages
“Wisconsin entrepreneurs are succeeding in starting businesses but often face difficulties scaling them into larger, more sustainable enterprises,” the study said.
The study attributed a lack of growth to challenges like access to capital, gaps in financial literacy and insufficient capital readiness. That’s in addition to recent spikes in wages and increasing cost pressures for businesses – indicators that the labor market has tightened and become more expensive for business owners and entrepreneurs.
Small businesses accounted for about 95% of Wisconsin’s net job growth from 2010 to 2025, making the lack of scalable growth a concern for the state’s major metropolitan hubs of Milwaukee and Madison. Those two metros combined supported 70,843 small business establishments in 2024, making up over half of the total across the state’s 15 metropolitan areas statewide, the study said.
Trailing behind was Green Bay, Appleton, Eau Claire and Racine.
Industry-specific growth, decline
Among the most populous small business industries in the state, retail and wholesale trade declined in volume the most since 2010, likely due to a continued shift to e-commerce, the study said.
Wisconsin remains strong in its small business manufacturing employment, which is nearly twice the national average.
“Our state’s continuing reliance on the manufacturing industry produces exports and jobs with relatively high average wages, but it also creates exposure to sector-specific turbulence,” the study said.
In addition to manufacturing, health care and social assistance have both experienced strong growth in Wisconsin since 2010, seeing net growth of 1,568 establishments – more than any other – while professional, scientific, and technical services grew by over 1,000 establishments. The study attributes growth to an aging population and increased demand for community-focused services.
