New Research Reveals the Best States to Launch a Business - Georgia Ranks 2nd
Wednesday, February 8th, 2023
The research, undertaken by Lensa, looked at factors such as the rate of new entrepreneurs, corporate tax rate, and venture capital, to reveal the best states to launch your business.
Top 10 States to Launch a Startup In:
|
Rank |
State |
New business applications |
Business survival rate |
Rate of new entrepreneurs |
Corporate tax rate |
Share of college- educated population |
Labor costs |
Cost of living index score |
Venture capital disbursed per $1 million of GDP |
Startup score /10 |
|
1 |
Texas |
492,243 |
5.62% |
0.37% |
3.95% |
30.7% |
$32,177 |
92.1 |
$3,000 |
7.09 |
|
2 |
Georgia |
326,460 |
4.8% |
0.47% |
5.93% |
32.2% |
$32,427 |
88.8 |
$3,824 |
6.68 |
|
3 |
California |
518,001 |
7.36% |
0.43% |
4.92% |
34.7% |
$38,576 |
142.2 |
$29,416 |
6.56 |
|
4 |
Illinois |
198,831 |
6.04% |
0.28% |
4.63% |
35.5% |
$37,306 |
94.3 |
$4,175 |
6.22 |
|
5 |
North Carolina |
171,355 |
7.03% |
0.34% |
6.09% |
32.0% |
$31,993 |
95.7 |
$6,082 |
6.07 |
|
6 |
Ohio |
154,824 |
7.69% |
0.28% |
4.39% |
28.9% |
$32,465 |
91.3 |
$1,705 |
5.97 |
|
7 |
Minnesota |
64,638 |
8.68% |
0.2% |
4.17% |
36.8% |
$38,881 |
100.0 |
$4,370 |
5.87 |
|
8 |
Massachusetts |
75,432 |
9.34% |
0.27% |
4.56% |
44.5% |
$45,555 |
135.0 |
$31,792 |
5.79 |
|
9 |
Colorado |
110,567 |
4.88% |
0.42% |
5.8% |
41.6% |
$39,545 |
105.3 |
$8,193 |
5.77 |
|
10 |
New Jersey |
162,576 |
3.72% |
0.37% |
3.74% |
40.7% |
$44,153 |
115.2 |
$2,879 |
5.76 |
In first place is Texas, scoring 7.09 out of 10 in the factors we looked at. Texas saw 492,243 new business applications in the last year, beaten only by California and Florida. Texas also ranks in the top 10 states for corporate tax rate, at just 3.95%, helping small business owners maximize their profits. Texas sits in the top 15 US states for the cost of living, benefiting startup entrepreneurs who are bootstrapping their businesses.
Georgia ranks second on the list of the best states to launch a startup in, scoring 6.68 out of 10. Georgia had around 326,460 new business applications in 2021, putting it in fourth place for this factor behind Texas, California, and Florida. Despite the lively business environment in Georgia, the state is one of the worst in the US for corporate tax, with a rate of 5.93%. The state makes up for its high corporate tax rate with an incredibly low cost of living, with an index score of 88.8. This puts it in the top five most affordable US states and provides some benefits for startup founders looking to reduce costs.
California ranked as the third best state for entrepreneurs to start a business, scoring 6.65 out of 10. In 2021, California had around 518,001 new business applications, beaten only by Florida. This makes California one of the fastest-growing new business climates and an attractive choice for new business owners. However, for startup entrepreneurs in California, the corporate tax rate is 4.92% and the state is in the top three most expensive based on its cost of living index of 142.2.
Further Insights:
-
Florida has an active and dynamic new business climate, with 632,105 new business applications in 2021.
-
Massachusetts has the highest business survival rate with a score of 9.34%.
-
Massachusetts's biggest college-educated population, with 44.5% of adults aged over 25.
-
Mississippi has the lowest labor costs of all the states, with the average income at $25.444.
-
Mississippi has the lowest cost of living index in all of the states, at 83.3, making it one of the most cost-effective states for startups.
For full report click here.
