16 Apr, 2018

Best States to Open a Business

Starting a new business always presents more or less challenges. Usually more… If you are an entrepreneur based in the United States ready to dive into the business world and make your dream come true, I am sure that you have wondered more than once which states are better to start your business in.

Location is often more neglected than it should be, when in fact it is equally as important as the type of company that we are starting, or why we chose a specific industry and even how we proceed in starting.

There have been a lot of studies conducted in this sense so today we can have an estimate when it comes to business success in the US’s 50 states. Looking at various factors, these studies tried to incorporate as many methods of analysis as possible.

Thanks to the publicly available data from Kauffman Foundation and the Information Technology and Innovation Foundation and the Small Business and Entrepreneurship Council we have two studies that will help us see the trends: the Small Business Survival Index 2008 and the 2008 New State Economy Index.

Therefore, combining information from various sources we gathered enough details that should be quite helpful for any aspiring entrepreneur.

 

But before we find out more, these are some of the key indicators which the studies were based on:

·         Access to funding

·         Average growth in number of small businesses

·         Lowest labor costs

·         Highest availability of human capital

·         Longest average work week

·         Cheapest office spaces

·         Highest total spending on incentives

·         Most educated population

 

North Dakota

According to several sources, the US state North Dakota is one of the best states to start an enterprise in. Located in the Midwestern and northern regions of the United States, it is the 19^th largest in area, the 4^th smallest by population, and the 4^th most sparsely populated of the 50 states. North Dakota is also popular for its long winters, so it would be a good choice for entrepreneurs who don’t mind the cold.

When it comes to business related statistics, North Dakota has the highest average growth in number of small business, while also being known for having the most accessible funds. Although ranked first for “Business Environment”, the state situated itself on the 30^th place when it comes to business costs.

 

Texas

The state of Texas performs quite exceptional in many of the categories listed above. It is ranked third when it comes to “Business Environment”, but is ahead of North Dakota in the “Business Costs” category, ranking 25^th.

The second largest state in the United States, Texas is located in the South Central region of the country, sharing borders with Louisiana, Arkansas, Oklahoma and New Mexico. Due to its size, it has diverse landscapes that also contribute to the variety of businesses that thrive here. An interesting fact is that if Texas was a separate country, it would be the 10th largest economy in the world.

Among the industries that thrive in the state of Texas are:

·          Trade, Transportation and Utilities

·          Professional and Business Services

·          Education and Health Services

·          Leisure and Hospitality

·          Manufacturing

·          Financial Activities

·          Construction

·          Energy

·          Information and Technology

If by any chance you were wondering which city is the best to start your business in, it will have to be Austin - home to University of Texas and ranked 5th in the country for attracting tech talent.

 

Utah

Being ranked the best when it comes to accessing resources, the state of Utah also has a tax friendly climate. It is a great place for entrepreneurs who want to start small businesses, having the highest percentage of loans granted to small businesses at 2.05%, which amounts to $2.7 billion.

Admitted 45^th in the United States, Utah’s largest city is Salt Lake City (SLC) that is also its capital. Here entrepreneurs have the best chances of business success. Utah is also an important center of transportation, education, information technology and research, government services, mining, and a major tourist destination for outdoor recreation. According to the 2013 census, Utah had the second fastest-growing population of any state, while also ranking as the 14^th state when it comes to the highest median average income.

 

Missouri

Missouri is definitely one of the best states to start a business in. Entrepreneurs that are focused on information and technology should definitely have their eyes on this state.

Located in the Midwestern United States, Missouri is the 18^th most populous state, having over 6 million residents. Although the largest urban areas are Kansas City and St. Louis, individuals who are interested in starting an enterprise should give Creve Coeur a chance.

Creve Coeur has become a real center of technology life sciences, and bioscience. In fact, the average revenue per business is $5.3 million.

Target industries in Missouri:

·         Automotive suppliers

·         Biosciences

·         Energy solutions

·         Advanced manufacturing

·         Financial & Professional Services

·         Health Science & Services

·         Information Technology

·         Transportation & Logistics

Missouri’s field of science, agricultural technology and biotechnology are still growing tremendously. Therefore, there’s still a lot of room for new startup businesses.

 

Montana

Nicknamed "Big Sky Country" and "The Treasure State, Montana is the 4th largest in area, the 8th least populous, and the 3rd most sparsely populated of the 50 U.S. states. Substantial economic resources include oil, gas, coal, hard rock mining, and lumber.

Billings is the largest city in Montana – with a population of 169,676 - and is also best choice for entrepreneurs who are looking to start a business. It supposedly ranks 6^th in the nation for business tax climate, while 28.8% of its residents hold a bachelor’s degree or higher.

 

Top 5 industries in Montana according to percentage of the state’s gross domestic product in 2005:

·         Real estate, rental and leasing, (11.8 percent)

·         State and local government, (10.9 percent)

·         Health care and social assistance, (9 percent)

·         Retail trade, (7.2 percent)

·         Construction, (6.7 percent)

 

However, looking at employment, there are information from 2014 that rank the industries differently:

·         Trade, transport, and utilities (92,900 people)

·         Government (88,800 people)

·         Leisure and hospitality (61,100 people)

·         Professional and business services (40,800 people)

·         Manufacturing (19,300 people)

·         Mining (9,600 people)