According to Forbes, there are 582 million entrepreneurs worldwide with more and more people deciding to start their own businesses every day. Last year, there were over 30 million Americans who were starting or already running their own businesses.
Some people are too afraid to take the leap into business because they're afraid that they will fail. However, the main reason businesses fail is because there's no market need, so if you have a product or service that is needed then you should live your dreams.
Keep reading to find out which are the best states to start a business in, in the United States.
Which Are the Best States to Start a Business In?
Entrepreneurs and start-up companies have a whole lot to think about before getting their businesses up and running. However, what a lot of startups and small businesses forget to think about is the importance of their geographical location.
Not every state in the U.S. has equal opportunities for entrepreneurs. The best state to start your business in is one that has favorable entrepreneurial activity, including good economic, financial, and social conditions. But what are the best states in the U.S. to start your business?
1. Utah
Utah is the best state in the U.S. to start a business, due to its impressive 9% working-age population growth from 2013 to 2022. The state also benefits from free-flowing venture capital, with over 100 companies receiving $1.16 billion.
Utah's job creation from startups and the opportunity share of new entrepreneurs are both higher than average across all of North America. The rate of new entrepreneurs in Utah is 0.29%. While the creation of jobs per startup in the first year is 5.67.
2. Florida
Florida is the second-best state to start a business in and is also the state with the highest rate of new entrepreneurs. 0.46% of residents in Florida are starting up their own businesses. Within the first year of startups beginning in Florida, they create 6.41 jobs.
The good news lies within the finances of Florida's startup businesses. Many get started with less than $5,000. Corporate taxes favor businesses in Florida, as the top marginal corporate income tax rate is 5.5%.
3. Texas
Texas is also a good choice for those looking to start their own businesses. The working-age population growth increased by 9.7% between 2013 to 2022. Texas's rate of new entrepreneurs was 0.43% and the state created 5.74 jobs per startup in the first year.
Starting a business in Texas also leads to fewer personal costs. This is because the cost of living and properties in the state is comparatively cheaper than other states. Venture capital invested in Texas is quite promising too, with over $2.69 billion invested last year. Taxes in Texas are also lower than many other states, which helps your company's bottom line in 2023 and beyond.
4. Colorado
Starting your business in Colorado could really help ensure that it survives. Startups here have 81.12% of remaining in business after the first year. Another reason this state ranks fourth is that corporate taxes in Colorado are also in favor of businesses.
The rate of new entrepreneurs in Colorado is 0.35%, while the creation of jobs per startup is 6.45. Colorado's working-age population has also flourished within the past five years, by growing by 7.2%.
5. California
California is a place where many businesses can blossom, thanks to plenty of venture capital.
Funding in California is the highest in the U.S., with businesses receiving $29.6 billion. However, business tax climate and corporate income tax rates are both high.
Regardless of high taxes, California is a hub for startups, with 0.45% becoming new entrepreneurs. As can be expected from the high number of startups, the entrepreneurs provide an abundance of jobs (6.47) in their first year.
Another reason why many people choose to start a business in California is because of the high business survival rates.
Other great states to start a business in include:
- North Carolina
- Idaho
- Oklahoma
- Georgia
- Wyoming
Speaking of Wyoming, this is the best state in the U.S. for business tax climate. Wyoming doesn't charge corporate or individual income tax. Check out more of our articles to learn more about how you can take advantage of a Wyoming continuance and protect your business's assets and entity.
Meanwhile, those who want to start a business in Idaho can benefit from a high rate of new entrepreneurs (3.8%). Startups in Idaho also create an average of 6 jobs per business.
Similar to Idaho, Oklahoma also benefits from a high rate of new entrepreneurs 3.9%. As does Georgia (4.2%) and businesses in the state of Georgia also benefit from high venture capital.
Which Are the Best Cities to Start a Business?
Not only do you need to think about the best state to start your business in, but you also need to think about the best cities for entrepreneurs. Different cities in the same state can still widely vary when it comes to your business's success.
According to Entrepreneur.com, these are the best startup cities in the U.S. for launching or moving a business:
1. Orlando, FL
2. Oklahoma City, OK
3. Miami, FL
4. Austin, TX
5. Tampa, FL
6. Charlotte, NC
7. Durham, NC
8. Raleigh, NC
9. Atlanta, GA
10. Denver, CO
Give Yourself a Helping Hand By Starting Your Business in One of These States
If you're ready to take the plunge and start your own business, make sure you think about your business's location including state and city in the United States. Follow our guide on the best states to start a business in, along with top startup cities, and give yourself and your business a stronger step to stand on.
