To kickoff the 2024 year, WalletHub released a study regarding the best and worst states to start a business. While starting a business is always a challenge, with about one-fifth of all starts up not surviving past one year of operation, choosing the right state for a business is critical for success.
“Outside of the currently difficult economic conditions, there are plenty of other reasons that startups fail, with a bad location being amongst the most common,” WalletHub shared. “Staying afloat is difficult even under normal conditions, and even more so when dealing with high inflation and labor shortages.”
Choosing a state that provides ideal conditions for budding businesses, such as access to cash and skilled workers, assists in these entrepreneurial businesses in thriving and surviving. Cassandra Happe, who is a WalletHub analyst, stated that starting a business is a difficult and risky process, but where one lives can highly influence the change of success.
With this in mind, WalletHub compared the 50 states across 25 key indicators of startup success for this study. It was revealed that Utah is the number one state for starting a business, coming in with a total score of 61.08. Georgia followed in second place with 60.22 and Florida was third with 60.17.
The state of Utah tied with South Dakota in first place for accessible financing, also coming in second place for the highest average growth in number of small businesses, just behind Idaho.
Utah was also found to be the state with the shortest average work week in hours. Business owners in Utah also benefit from saving money on employee benefits as the average healthcare insurance premium per enrolled employee is one of the lowest throughout the nation.
“Utah is the best state for starting a business in large part because it’s the easiest state for finding business-loan financing, and it has the largest year-over-year employment growth in the country at nearly 2.5%,” shared WalletHub. “Having the necessary capital makes it much easier for a business to get off the ground, and a strong job growth rate indicates that existing businesses are doing well.”