• Tamir Zuckerman

The best states to start a business in the US

By Michael S. Fischer , published on NU property and casualty 360

Many factors can influence an entrepreneur’s chances of success in starting a company. As in so many realms, it often comes down to location.

"Comparisun", which provides information to small and midsize businesses, has analyzed the 50 states to determine which ones offer the best environment in which to launch a startup.

Analysts looked at five-year business survival rates between 2013 and 2018; business application growth; the share of residents who are new business owners; tax rates; college graduates in the area; labor costs, as measured by income per capita; and cost of living in each state. They gave a score of 100 to each factor, then combined the ratings to arrive at a final weighted score out of 100.

The top 10 states had overall scores ranging from the low 60s to the upper 70s. By comparison, the states that provide the least attractive environment for entrepreneurs had overall scores in the 30s and 40s, and year-over-year negative new business application growth.

#10 Oklahoma

Overall score: 62.54 | New business applications/y-o-y growth: 39,857/1.4% | Business survival rate: 52.3% | Rate of new entrepreneurs: 0.4% | Corporate tax rate: 6% | Share of college-educated population: 24.9% | Labor cost: $28,823 | Cost-of-living index: 87


#9 Georgia

Overall score: 62.66 | New business applications/y-o-y growth: 165,474/6.3% | Business survival rate: 49.7% | Rate of new entrepreneurs: 0.4% | Corporate tax rate: 5.8% | Share of college-educated population: 30% | Labor cost: $40,595 | Cost-of-living index: 89.2


#8 North Carolaina

Overall score: 63.50 | New business applications/y-o-y growth: 99,316/2.2% | Business survival rate: 52.4% | Rate of new entrepreneurs: 0.3% | Corporate tax rate: 2.5% | Share of college-educated population: 29.8% | Labor cost: $35,094 | Cost-of-living index: 94.9


#7 California

Overall score: 63.80 | New business applications/y-o-y growth: 361,467/-2.4% | Business survival rate: 52.8% | Rate of new entrepreneurs: 0.4% | Corporate tax rate: 8.8% | Share of college-educated population: 32.6% | Labor cost: $37,256 | Cost-of-living index: 151.7


#6 Utah

Overall score: 63.89 | New business applications/y-o-y growth: 48,630/3.8% | Business survival rate: 52.3% | Rate of new entrepreneurs: 0.3% | Corporate tax rate: 5% | Share of college-educated population: 32.5% | Labor cost: $26,907 | Cost-of-living index: 98.4


#5 Arizona

Overall score: 64.02 | New business applications/y-o-y growth: 76,097/7.8% | Business survival rate: 49.1% | Rate of new entrepreneurs: 0.4% | Corporate tax rate: 4.9% | Share of college-educated population: 28.5% | Labor cost: $26,535 | Cost-of-living index: 97


#4 Colorado

Overall score: 64.06 | New business applications/y-o-y growth: 86,415/-0.5% | Business survival rate: 49.8% | Rate of new entrepreneurs: 0.3% | Corporate tax rate: 4.6% | Share of college-educated population: 39.4% | Labor cost: $31,333 | Cost-of-living index: 105.6


#3 Ohaio

Overall score: 66.02 | New business applications/y-o-y growth: 92,112/0.4% | Business survival rate: 53.2% | Rate of new entrepreneurs: 0.2% | Corporate tax rate: 0% | Share of college-educated population: 27.2% | Labor cost: $26,778 | Cost-of-living index: 90.8



#2 Florida

Overall score: 69.75 | New business applications/y-o-y growth: 389,490/-0.4% | Business survival rate: 49.5% | Rate of new entrepreneurs: 0.4% | Corporate tax rate: 5.5% | Share of college-educated population: 28.5% | Labor cost: $32,869 | Cost-of-living index: 97.9



#1 Texas

Overall score: 77.77 | New business applications/y-o-y growth: 299,617/1.4% | Business survival rate: 50.7% | Rate of new entrepreneurs: 0.4% | Corporate tax rate: 0% | Share of college-educated population: 28.7% | Labor cost: $26,627 | Cost-of-living index: 91.5


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