The Best and Worst US States to Start a Business In
According to a study from WalletHub, the personal finance site, Texas is the best state to start a business and Rhode Island is the worst. This study was based on analyzed data from different valid sources, such as the U.S Department of Labor and Statistics and the U.S Census Bureau.
According to the study, the top 10 best places to start a business are:
4- North Dakota
The 10 least favourable places to start a business are:
1- West Virginia
2- New York
8- New Hampshire
9- New Jersey
10- Rhode Island
In the course of the study, the key factors that were considered were: the business environment, access to resources and business costs. In addition to this, 26 key metrics (such as corporate tax rates, labor costs, start-ups per capita, and percentage of the population that is of working age, and college-educated) were used.
How the States Stack Up
-Texas (no 1), which has the second-largest economy in the country (1.8 million) and the highest average growth in the number of small businesses, happens to have the best business environment out of all the states.
-Mississippi (no 13) has the lowest labor costs and the cheapest offices while Maryland (no 40) has the highest costs.
-Massachusetts (no 36) has the most educated population
-Three states [New York ( no 42), California ( no 8), and Alaska(no 28) ] have the most expensive office spaces while Louisiana (no 15) has the lowest educated population.
-Ohio (no 34) has the largest lowest average growth in number of small businesses while North Dakota ( no 4) has the highest average growth in the number of small businesses.
-Alaska ( no 28) has the highest availability of human capital while Colorado (no 10) has the lowest availability of human capital.
-West Virginia ( no 41), Michigan (no 18), and Vermont ( no 43) have the highest spending on incentives as a percentage of GDP while South Dakota ( no 22) has the lowest spending on incentives as a percentage of GDP.
-Alaska (no 28) has the highest average workweek (in hrs) while Michigan (no 18) has the lowest average workweek (in hrs).
What Exactly Makes a Business Successful?
Why is it that some businesses fail while others succeed? Answering this question is not that simple because there isn’t one single formula for guarantees the success of a business. What works for a business may not work for another business. Many start-up businesses on the West Coast do better than those on the East Coast but the reason why this is so is unclear. It seems that management tools and techniques do not have much direct effect on the success of a business. Whether a start-up business will be successful depends on how various factors interact and having a good understanding of the business basics also helps.
[Related article: 5 small business tips to boost sales on a budget]
Finding Talented and Experienced Employees Is Challenging
One of the problems start-up businesses face is the problem of finding employees that are talented and experienced because there is always competition for labor and the businesses with high capital are usually the ones who can obtain highly skilled labours. This is a challenge for start-up businesses because it makes it hard for them to obtain the best available labor for growth. The location of a company also plays a role in getting really good employees. Areas that are populated and have a really good number of educated people within the working class range are more suitable for attracting skilled labor.
The Effect of Corporate Income Taxes in Each State
State taxes and regulatory environment also play a role in the success of a business. Compared to the states ranked at the top, most of the least ranked states have high corporate income taxes. The states at the top also have clusters of industries and these attract investments.
Outsourcing Business Basics Are the Real Growth
As mentioned earlier, having a good understanding of business basics is a good way to make sure a business grows. Understanding the business basics is as important as choosing the right location. Two of these business basics happen to be bookkeeping and accounting. Bookkeeping involves recording and organizing a business’s financial transactions. Accounting is related to bookkeeping because bookkeeping lays the foundation for it. It is the process of measuring, processing and communicating financial information. It has to do with interpreting and analyzing data gotten through bookkeeping.
[Related article: 7 Ways Your Business Wins with Outsourced Bookkeeping Services]
The importance of bookkeeping and accounting for small businesses cannot be overemphasized because it gives a clear picture of the finances of one’s business. Bookkeeping and accounting help start-up businesses to track the movement of every single currency owned and spent and through that you can make better financial decisions, clearly understand where the company stands financially and avoid unfavourable legal issues that could come up when the financial state of the business is unclear. Making the wrong financial decisions can be very detrimental to the growth of a business and that is why bookkeeping is very important.
Take advantage of a customized bookkeeping plan made to fit your small business needs [Learn More]
How to Make Sure Your Small Business Thrives
When you want to start a business, you should consider the environment. The characteristics of the location should determine the type of business as this is one of the factors that encourage the longevity of a business. You have to consider the nature of the market, the availability of labor, the cost of production and investment opportunities among others. You need to have a good idea of what you are getting into, make a plan and see how feasible it is.
In addition to choosing the right location, you should also be aware of the importance of outsourcing business basics. Business basics are very important to how well a business performs. One of these business basics that should not be taken with levity is bookkeeping along with accounting. Bookkeeping is pretty much part of the soul of a business because it forms part of the basics of the financial aspect of a business. If you have not been paying more attention to it before or your business is failing, you should look into the bookkeeping aspect of your business.