New York? Florida? Michigan?
With around 20% of new businesses failing within one year and inflation making entrepreneurship even more difficult, a new report sheds light on 2024’s Best & Worst States to Start a Business to showcase the most fertile grounds for planting and growing new ventures.
All 50 U.S. states across 25 key indicators of startup success. The data set ranges from financing accessibility to labor costs to office-space affordability.
Best States to Start a Business
Being an entrepreneur is hard, as around one in five new businesses fail within the first year. Being in the right state can make the process a lot easier, though, and Utah is the best state for starting a business, according to a new report by the personal finance website WalletHub. It’s followed by Georgia, Florida, Idaho and Nevada. The report analyzed 25 indicators of business-friendliness across three categories: business environment, access to resources, and business costs.
“Utah is the best state for starting a business because businesses have greater access to loans than in any other state, and Utah has the largest annual employment growth in the country, at nearly 2.5%, “said Cassandra Happe, an analyst at WalletHub. “During a time when money is tight, having ready access to capital and being in a state where business is booming can mean the difference between a startup thriving and dying during its first few years.”
Best and Worst States for Starting a Business
|44. New Jersey
|45. New Hampshire
|46. West Virginia
|9. North Carolina
|50. Rhode Island
Each of the best states for starting a business brings something unique to the table. For example, Georgia has one of the highest entrepreneurship rates in the country, and some of the lowest taxes. Florida has one of the highest GDP growth rates, and its working-age population is proliferating. Iowa has a very high business loan availability, and Nevada keeps the cost of providing health insurance to employees low.
“Starting a business is a difficult and risky process, but where you live can highly influence your chances of success. Before establishing a business in any location, research to ensure it’s an ideal place for your customer base, has enough labor and supplier availability, and suits your needs when it comes to financing,” said Happe.
There are a few things that entrepreneurs can do to make their business launch go as smoothly as possible.
Tips for Starting a Business
- Thoroughly Research Your Market: Before diving in, conduct thorough market research to understand your industry, target audience, and competitors. Identify gaps in the market and ensure there’s a demand for your product or service. A strong understanding of your market will guide your business decisions and set you up for success.
- Create a Solid Business Plan: Outline your business goals, target market, competition, and financial projections in a comprehensive business plan. This document serves as a roadmap for your business and is essential for securing funding from investors or lenders. Regularly revisit and update your business plan as your company evolves.
- Focus on a Unique Value Proposition: Differentiate your business from others by offering things that stand out. Communicate what sets your product or service apart from the competition and why customers should choose you. A compelling value proposition helps attract customers and build a strong brand identity.
- Choose a City that Fits Your Needs Well: You should establish your business in a state that has a strong market in your particular niche, with easy access to relevant suppliers. For example, Jeff Bezos started Amazon in Washington in part because of the tech hub around Seattle and the fact that the state’s small population would minimize how much state sales tax they had to collect. Other business-friendly things to look for in a state include low business taxes, a large working-age population, on and a strong overall economy.
- Manage Finances Wisely: Keep a close eye on your finances from the start. Develop a realistic budget, monitor expenses, and set aside funds for unexpected costs. Hire an accountant or use accounting software to ensure accurate financial records. Effective financial management is key to the long-term sustainability of your business. Don’t cut corners regarding things like licenses and insurance, and don’t put all of your income into a business venture.
For the full report, please visit: here.