Economy Watch: Best States to Start a Business
- Jul 06, 2017
By Dees Stribling
Business formation is an important driver of office space absorption and other commercial real estate activity, and some places are more conducive to new businesses than others. This week, WalletHub published a study that compared the 50 states in terms of the best and worst for starting a business. Topping the list were North Dakota, Utah, Texas, Oklahoma and Nebraska.
The company compared the states across three key dimensions: Business Environment; Access to Resources; and Business Costs. The dimensions were evaluated using 20 relevant metrics, with each metric graded on a 100-point scale. Metrics included average growth in the number of small businesses; five-year business survival rate; financing accessibility; share of college-educated population; office space affordability, and more.
Best for Business Formation
Fittingly, with the top Business Environment rank, North Dakota has the most startups per 100,000 residents at 205.92. This is three times more than in West Virginia, which had the fewest at 69.68. Other top 10 states for business formation are Florida, Colorado, Georgia, Missouri and South Dakota. The worst state to start a business, according to WalletHub? New Jersey, just behind New Hampshire and Maryland.
Other data reported by WalletHub showed that Iowa has the cheapest average annual rent for office space, at $12.08 per square foot, which is 2.2 times cheaper than in New York, the state with the most expensive annual rent at $26.66 per square foot. Mississippi has the lowest labor costs (median annual income), at $39,665, which is 1.9 times lower than in Maryland, the state with the highest, at $74,551.
Another recent WalletHub study revealed the best and worst cities for renters.