Building a successful business from ground to roof is so difficult that nearly 20 percent of new businesses fail during the first year of opening. The success among new businesses is shared by only half surviving in five years according to studies of the US Bureau of Labor Statistics. Because of the high risk, entrepreneurs continue to look for whatever advantage they can use to help their business become successful.
A study initiated by WalletHub, a financial website, provided a ranking among the 50 US States according to best business startup conditions. The study compared each of the 50 states to each other according to three factors. The three factors which were considered were their resources, business costs and overall business environment.
Metrics used in this study
In each of the factors, the states were further rated according to 26-key Metrics. The Metrics was made up of important characteristics and awarded points to each state according to its cost of living, average age and percentage of working and college-educated people, labor cost and corporate tax rates and others. Each of the states gained a score of 1 up to 100 based on how well it performed according to the metrics.
The top-performing state was Texas as the ideal place for individuals to begin a business. Texas, also known as the “Lone Star State”, is where a number of Fortune 500 companies call home. The state is home to companies such as AT&T, American Airlines and Exxon Mobil. Texas also received the highest points of the Metrics for the best business environment. The state also currently boasts one of the largest economies in the United States with a yearly income of $1.8 trillion.
Only California was listed as having the highest economy in the United States by the Department of Commerce. WalletHub also showed that Texas is the fourth highest in the nation for average growth and number of small businesses compared to the other US states.
Utah came in second place in the overall ranking according to the study made by WalletHub. Utah was found to be second place as the best states for new business financing for which WalletHub awarded the ranking for access to resources. Georgia, North Dakota and Oklahoma also make-up the rest of the top five states as the best places to start a business. They are listed in order below;
- North Dakota
The state that unfortunately came in last place according to the WalletHub study was Rhode Island. Rhode Island was ranked this way due to its poor performance in the business environment. WalletHub also ranked New Jersey next to last according to the performance on business costs as the state has an astounding 9 per cent corporate tax rate.
Further details found the study by WalletHub reported that the state of Mississippi was the lowest state for labor cost. However, Maryland was found to be the highest in terms of labor cost. Massachusetts was observed to have the highest amount of an educated population of at least 41 per cent with a minimum of a bachelor’s degree. However, West Virginia was found to have the least amount of educated people with only 20 per cent holding the same degree. Minnesota was found to have the best rates for office spaces and three states were tied for the highest, Alaska, California and New York.