WE'RE MOVING TO INDIANA

Happy Thursday sweet Monarch readers 👋🏼

Bailey here, back at it again with the white vans some business facts for the business baddies 😏💼👊🏼

Thinking of starting an entrepreneurial journey of your own today? Tomorrow? in 2024? Well lucky for you, there’s yet another factor to consider in how to create and sustain a flourishing business! And that factor is, drumroll please, WHERE YOU LIVE!

Unfortunately it’s not easy (or desirable for most) to just up and move to another state. BUT regardless of your moving plans, this article is here to help! It’s important to be aware of common factors that affect chance of starting a successful business in your state.

Forbes Advisor recently rolled out a comprehensive study, ranking the best states to launch a business in 2023, and you know I love my Forbes lists😍. They crunched this year’s numbers with 18 key metrics across 5 main categories in mind (WOOH!!)

Without further adieu, let's diiiiiive in 🌊

🦋 Today’s Monarch Menu:

• What's in the mix? (understanding the underlying data)

• Key takeaways from the report

• Top 5 States to start a business

• Why is Michigan ranked so BADLY?!

🔍 What's in the Mix?

Forbes analysts ranked states from best to worst to start a business based on 18 key metrics across 5 categories. They also assigned weights to these categories by utilizing a points system. While I listed the factors in bullet-form below, I made this fun graph in Canva that shows:

1. The 5 main categories and their percentage of the total calculation (ex: ‘Business costs’ are 30% of the total)

2. The 18 sub categories and the amount of points (the Y axis) they were individually assigned (ex: Formation Fee was assigned 8 points, ‘Average Funding’ was assigned 20 points!)

• Business Costs: This includes taxes (income, corporate, property), formation fees, minimum wages, and natural disasters count.

• Business Climate: Growth in small businesses, business survival rates, and the number of businesses per SBA location.

• Financial Accessibility: Average funding available for businesses.

• Economy: Factors like per capita personal expenditures, GDP per capita, and cost of living.

• Workforce: Unemployment rate, percentage of working-age population, degree-holding workforce, and the number of higher education institutions.

🇺🇸 Eight Key Findings From Across the Country

1. Overall best state to start a business: Indiana ranks as the best state to start a business 🤑 (more on that below)

2. Overall worst state to start a business: New York ranks as the worst state to start a business 🤯. A super high cost of living, high unemployment rate, and a lower-than-average survival rate of 79% make the city that never sleeps.. a sleeper in this category ☹️

3. Best state by business survival rate: Washington gets the W here with a business survival rate of 89% ✅

4. Worst state by business survival rate: Hawaii has the lowest survival rate at just 75% 🛑

5. Notable rates of new businesses by state: Entrepreneurs in Florida (+29,995), Texas (+15,656), and North Carolina (+14,581) have all seen a net increase in new businesses since 2020. Meanwhile, New York saw the largest decrease in business with 3,550 less business than in 2020.

6. State with the highest cost to register a business: Startups in Massachusetts have to shell out $500 to form their business

7. State with the lowest cost to register a business: Kentucky Entrepreneurs have to pay just $40!

8. States with the “best” workforce: Massachusetts, Colorado, and Connecticut provide the best workforce, with over 40% with a college education. Meanwhile, California, Alaska, and Colorado have the largest working population.
   Note: I put “best” in quotes because college isn’t indicative of success, so Forbes should’ve used different terminology here!!!

🌟 Top 5 States to Launch Your Business Dream:

Now that we know what factors went into the rankings and some additional highlights, let’s take a peek at the stars of the show!

Best state to start a business: INDIANA

• Business survival rate: 83.6%

• Income tax: 3.23% (flat)

• Corporate tax: 25%

• LLC Formation Fee: $100

Indiana ranks as the number one best state to start a business, largely because of its low flat tax rate of 3.23%, an above-average business survival rate (national average is 80.6%), and a solid amount of funding opportunities. The Small Business Association (SBA) reported that Indiana had about $13.1 million in total funding for small businesses in 2023!

Runner Up: COLORADO!

• Business survival rate: 81.9% (national average is 80.6%)

• Income tax: 4.55%

• Corporate tax: 24%

• LLC Formation Fee: $50

The second-best state to start a business is Colorado. With a startup-friendly ethos and an impressive business survival rate of 81.9%, Colorado is where nature and business beautifully collide. Though tax rates aren’t the lowest, the state is buzzing with entrepreneurial spirit. It’s also a huge tourist destination for all age groups!

In Third Place: North Dakota

It may be a surprise entry to most, but with the lowest income tax rate and highest average funding per business, North Dakota is making waves in the business world. Who would’ve thought! (Not me, but nice job North Dakota)

In Fourth Place: Pennsylvania

With DOUBLE the national average in small business loan funding and a competitive business survival rate, Pennsylvania is more than just the land of cheesesteaks and brotherly love for entrepreneurs.

Rounding out the Top 5: South Dakota

Z E R O income tax, a strong 81% business survival rate, and higher financial assistance make South Dakota a hidden gem for business startups.

✋🏼 Hold up - where does Michigan rank??

Well folks, unfortunately our Mitten state ranks a rough 47th (ie: third from last).

The bad news: We are the only state (besides Iowa) that scored a Z E R O in financial accessibility 😅

The good news: That’s the main reason we are ranked super low (instead of mid-to-low). Our best category is business costs, where we scored a wonderful 9 out of 10!

🚀 In Conclusion

From the rolling plains of South Dakota to the scrumptious smell of Philly cheesesteak wafting through the state of Pennsylvania, the landscape of the best states to start a business is incredibly diverse. Whether you're looking to leverage financial accessibility in North Dakota or tap into the high business survival rates of Indiana, there's a perfect spot for your business dream to take flight.

Here's to finding your business's new home and soaring to new entrepreneurial heights in 2024! 🌟🎉

C U SOON,

Bailey

Source for this article: Forbes baby