If you are looking to start your own business, know that some states are better than others in terms of business resources and environments, and costs. WalletHub, a personal finance and credit score company, has just made public a report that ranks states on the criteria listed above. In other words, WalletHub’s report shows entrepreneurs the best and worst states to start a business in.
There are basically three categories in the report: Access to Resources, Business Environment and Business Costs. Access to Resources analyzes the state’s human capital and ease of access to various financing instruments, as well as the worker education level. Business Environment analyzes the worker engagement metrics, the potential for business growth, and the level of variety in various industries in the state. Business Costs, of course, analyzes the costs with labor and rent, as well as taxation.
According to the WalletHub report, the best state to start a new business in is Texas, with an overall score of 64.4 in the report. The Business Environment score puts the state at the top of this category. Its Access to Resources score is 12th in the category. And the Business Costs score places Texas on the 16th place in this category.
Second place has been won by Utah, with an overall score of 63.41 points. Utah is on third place in the Business Environment category, on first place in the Access to Resources category, and on 33rd place in the Business Costs category.
Third place has been won by Georgia, with an overall score of 60.21 points. It ranks seventh in the Business Environment category, 15th in the Access to Resources category, and 17th in the Business Costs category.
This is the full list of the top 10 states for entrepreneurs looking to start a business:
- Texas Score: 64.40
- Utah Score: 63.41
- Georgia Score: 60.21
- Montana Score: 58.90
- Oklahoma Score: 58.67
- Florida Score: 58.09
- North Dakota Score: 57.94
- California Score: 57.61
- Arizona Score: 55.58
- Colorado Score: 55.43
Of course, the report also shows entrepreneurs the worst states. We can find New Hampshire, Rhode Island and Hawaii at the low end of the list. The worst states for business entrepreneurs are:
- Alabama Score: 45.90
- Maryland Score: 45.85
- Connecticut Score: 45.05
- New Jersey Score: 44.00
- West Virginia Score: 43.60
- Pennsylvania Score: 42.81
- Vermont Score: 42.53
- Rhode Island Score: 41.88
- New Hampshire Score: 38.11
- Hawaii Score: 37.16
Analyzing the full report, it is interesting to note that North Dakota is the best in the small business growth category.
Utah and Florida come next. West Virginia, Vermont and New Mexico ranked lowest in this category.
Mississippi had the lowest labor costs, but only managed to be 49th in the most educated populace category.
Massachusetts was the winner of the most educated populace category, while West Virginia came in last.
Iowa was first in the office space costs category, followed closely by Maine and South Dakota. New York, California and Alaska and are at the bottom of this category due to their high office space costs.