In 2021 the U.S had 5.4 million new business applicants according to commerceinstitute.com. There’s a reason this country is known as the land of opportunities. Yet these opportunities can vary depending on the state you want to start and grow your business.
If you’re an entrepreneur or a small business owner, here are the five best states to start and grow a business.
What to look for when deciding which state to start your business
Before we jump to the list, here are some things to consider when looking at different states.
It’s important to look into the licensing, zoning laws, and other restrictions on creating a business.
Make sure you consider the corporate, individual, sales, and property taxes of the state.
Cost of living
Besides, start-up costs in your business, understand how much you’ll need to make to support your living in that state.
This comes down to population and workforce. You’ll want to see if the population has been growing or declining in recent years. In addition, you want to look at the demographics to see if the population matches your targeted clients.
Besides population, consider your competition. Having a few competitors can be a good sign that there’s a demand for your service.
Lastly, look into the workforce, or the number of workers working in different industries.
Be mindful of the frequency and likelihood of natural disaster occurrence. In addition, the impact different industries have on the environment.
The five best states to start and grow a business
Texas politically might be a controversial state but it loves new businesses. Approximately 400 Texans start a new business every day. Here’s why it is a great state to start a business
- No corporate or personal income taxes.
- It has a very large population that is continuing to grow.
- According to managementhelp.org, it has the country’s highest business survival rate.
- There are very few natural disasters.
- The cost of living is below the national average.
Con: It does cost more to run a business in Texas than in most other states and the sales taxes can be as high as 8.25%.
Georgia isn’t just a great place to grow peaches, it is a great state for business as well, according to hubspot.com.
- The working population is around 5 million people.
- Low cost of living.
- Has the highest levels of venture capital.
- It’s a great place for startups.
Con: Relatively high taxes with 5.75% for corporate tax and 5.75% for individual income tax
According to hubspot.com here is why North Carolina could be where your business thrives.
- Low corporate tax rate of 2.5% which will eventually be lowered to 0%.
- An unemployment rate of 3.4% with a workforce of 5 million.
- Low incorporation cost of $125.
- The cost of living is lower than the national average.
Con: The income tax rate is a bit high at 5.25%.
Here is a state with a lot of potential according to Managementhelp.org.
- No state income tax for individuals.
- 5.5% corporate income tax rate.
- There’s been a slow increase in small businesses.
- Labor costs are low.
- You can exempt yourself from corporate taxes by filing as an LLC at the cost of only $100 or as a sole proprietor
Cons: High rates of natural disasters and only a 49.5% business survival rate.
You don’t need to be from California to know that it’s an expensive state to live in. Yet there is still a lot of potential for business growth. Here’s why it’s the best state for business innovation.
- It’s known for being the best state for entrepreneurs with the best survival rate.
- The leading state in innovation and capital.
- It has the highest annual payroll for employees.
Cons: High cost of living, along with a high corporate tax rate of 8.84%.
Which of these five states do you want to start a new business in?