When you want to start a new business, one of the most important things to consider is location. We analyzed every one on the 50 states found in the U.S. so that we could determine the most entrepreneur-friendly ones for people to start a business from. Thanks to our research, we narrowed down to three main factors that new business owners need to consider: opportunity, cost and viability.
Similar to real estate, when you want to open a new business, the location matters.
Amazon vetted multiple cities when they were trying to prove that their selection for a HQ2 was the right one. They were very clear as to why they decided to go with the cities they selected. Amazon already knows that location is one of the most important things when it comes to business (this doesn’t include the businesses which are run online).
Although the situation differs when it comes to small businesses and entrepreneurs, most of these factors are still applicable. Whether its local economic growth, lower cost of living or better access to the best talent, more entrepreneurs are looking for places that can offer them with the best ventures for their businesses.
We scouted every one of the 50 states found in the U.S. so that we could narrow down the places that are entrepreneur-friendly in terms of starting a business. The research was focused on three important factors for a successful business: opportunity, cost and viability.
To be able to decide the position of every state, we used 11 factors to help us with our research. They included; the economic growth in the state, business survival rates for at least 10 years and median employee wage. Every state was ranked and given an average score that gave it the overall position.
The Best States for Small Business Owners and Entrepreneurs
According to the research we conducted, the following are some of the states that you should consider when looking for a viable location for your next business.
Yet again, the Lonestar state proves that it cannot be messed with.
Boasting a rock-solid economic growth rate of at least 6% and low unemployment, Texas manages to leverage its vast resources, size and diversity to be considered as one of the best locations for a new business venture.
Austin, which is the capital of the state, is hosting about 6,000 startups and some of the popular tech companies including Apple and Google. Texas also benefits from its cost of living which is significantly lower compared to most of its large counterparts.
An interesting fact about Texas: it happens to be one of the only two states (the other state is Maryland) that uses the annual revenue of businesses to determine the state’s annual reporting fee. This is a very advanced method of determining the state’s economic environment making it more suitable location for businesses because instead of asking for a specific fee from every business, they charge them proportionally.
Michigan has the strongest economic growth statewide at 5.4%, low business formation fees and a well-educated workforce. The state’s business survival rate is also significantly high, with more than a third of the businesses surviving the 10-year mark. Even while it has a very big city such as Detroit, it still manages to have a lower cost of living, making it the best locating for entrepreneurship and innovation.
With an almost perfect combination of resurgent energy backed with a solid infrastructure and favorable as well as favorable economic conditions. These are just some of the factors that make it a suitable location for small businesses and entrepreneurs.
Turns out that the Pelican State is an ideal place for “The Big Easy” to open and run their new businesses in. As an entrepreneur, you have the opportunity to benefit from a steady growth rate, a relatively modest cost of living and lower costs of labor (as well as a labor market that is tighter) as you opening your new business in this deep southern state.
Let’s not forget the additional benefits of a rich entertainment culture and delicious cuisine which will ensure your employees are always happy when they are not at work.
Just like New Orleans and Detroit, Louisiana is a post-Katrina hotbed which has been attracting some of the best millennial talents. If you don’t mind a bayou with sweltering summers, this is one of the best states to consider when looking for a location for your new business venture.
4. North Dakota
Don’t just by pass this entrepreneurial treasure which is located in the Great Plains. North Dakota is a worthwhile location to consider when looking for where to start a new business.
With a rock-bottom rate of unemployment at 2.8% and one of the highest business survival rates of 10-years, this Peace Garden State is worth putting into consideration for most entrepreneurs. Let’s not forget how North Dakota’s modest cost of living can help keep your bank account in shape.
The state is also ready to accept new small businesses and entrepreneurs so consider it as a potential location for your new venture.
Alaska lives up to its “The Last Frontier” nickname because it’s a great location for small businesses and entrepreneurs.
Although the distance from the mainland and climate of the state can deter very successful businessmen, Alaska’s annual income level is one of the highest in the country. Their labor market is quite favorable because it has a surviving rate of 10 years and a steady supply of workers.
If you don’t mind settling in an off-the beaten-path location that comes with numerous benefits, you can travel north and enjoy the 49th state of the U.S.
“Minnesota Nice” doesn’t just refer to the manners in this case. It also has to do with the climate for small businesses and entrepreneurs.
Some of the things that make this state with about 10,00 lakes the ideal choice for a business location are the low levels of unemployment, basically no charges for a couple of fillings and a modest cost of living. In addition, Minnesota’s economic growth rate is very strong and their business rate is also impressive. In particular, Minneapolis, has a fast-growing tech industry.
If you don’t mind living in a state with very cold winters, consider Minnesota as a perfect location for your entrepreneurial venture.
Home to MIT and Harvard, you will never go wrong when looking for some of the best talent from The Bay State.
The reason why Massachusetts is can be a great venue for your venture is that it’s ranked as number three in terms of having the highest income level for independent businesses, its among the leading in business survival rates in the U.S. and has well-educated workers. Once you finish paying for the business filling fees as per the state’s regulations, there are several benefits of opening a business in Massachusetts.
Missouri not only has a strong economic growth; the filling fees are also low and its one of the most affordable states to live in in the U.S. This Show Me state is worth considering when you’re looking for a new business.
The state has a fairly modest median income as and the unemployment rate is at an average at 3%, you’re likely to get very talented people who will work for you at a reasonable rate. In addition, the cost of living in Missouri is relatively low. With all of the above factors, you can’t go wrong as a small business owner or an entrepreneur who wants to start a business in the Midwest.
With a cost of living that’s relatively low and a robust economic growth, The Sunflower State is a very great place to settle in as an entrepreneur or small business owner. If you’re looking for a location that boasts an average median income along with a great unemployment rate, making it a low cost and healthy labor pool, Kansas is the place to be.
Montana’s motto of “Oro y Plata” which basically means Gold and Silver can’t explain the state’s economic capabilities any better.
This Big Sky Country comprises of a robust economic growth which complements its business survival rate that’s very high at 10 years. It has modest filling fees alongside lower labor costs unlike most of the other states in the U.S. All these features are what make Montana have a healthy environment that is suitable for small businesses and entrepreneurs. Consider it as a sleeper pick with numerous new ventures for your business.