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The United States, a global economic powerhouse, is rich with opportunities for those aspiring to venture into the world of entrepreneurship. Across the nation, start-ups bloom, bringing new ideas and innovative solutions to the forefront. However, the appeal and ease of starting a business can significantly vary across states due to factors such as accessibility to funding, market saturation, business policies, and the overall business-friendly environment.
Each year, a Business Friendliness Index is assembled to score US states based on various factors contributing to a positive business environment, providing insight for entrepreneurs contemplating where to set the foundations of their new venture. This index encompasses a comprehensive analysis of quality indicators– GDP Growth per state, five-year business survival rate, growth of business revenue, livable wage, venture capital investments, among others.
Key findings from the data include:
As we delve deep into the analysis, this article deploys the Business Friendliness Index to guide entrepreneurs' decisions, shedding light on the best US states to start a business. The intent is to unravel the economic landscape of these states, and how they foster or hinder the journey of entrepreneurial success.
Category
U.S Rank
Long ass metric name here
#1
To determine the safest states the 50 states were compared across three key categories:
Each of these was defined via individual metrics that were representative of the category. There were a total of 22 metrics which are listed below. Each metric was graded on a 100-point scale, with a score of 100 being the max. Each metric had state scores distributed from 0 to 100.
Finally, each state’s weighted average was determined across all metrics to calculate category scores. These were then summed to generate the final rank order of the states.
State GDP Growth: Regular Weight (3.6 Points)
Note: This metric measures the yearly growth in Gross domestic product (GDP) in 2023.
State Job Growth: Regular Weight (3.6 Points)
Note: This metric measures the percent increase in employment count from 2022-2023.
Startups per 100K: Regular Weight (3.6 Points)
Note: This metric measures the number of new employer businesses per 100 people in 2021.
Five-Year Business Survival Rate: Triple Weight (10.7 Points)
Note: This metric measures the percent of businesses that are still active after five years.
Entrepreneurship Index: Double Weight (7.1 Points)
Note: This metric measures the percent of population that starts a new business in 2021.
Growth of Business Revenue: Double Weight (7.1 Points)
Note: This metric measures the percent increase in total business revenues.
Worker Productivity: Regular Weight (3.6 Points)
Note: This metric measures the amount of GDP per hour worked by employees.
Patent Creation Rate: Half Weight (1.8 Points)
Note: This metric measures the number of patents granted by the U.S. Patent and Trademark Office per 100k residents.
Growth in Number of Small Businesses: Double Weight (7.1 Points)
Note: This metric measures the percent growth in business applications from 2022 to 2023.
Job Training Support: Half Weight (1.8 Points)
Note: This metric measures the percentage of paid training programs offered by employers.
Livable Wage: Regular Weight (3.8 Points)
Note: This metric measures the income level that allows individuals or families to afford an adequate life.
Corporate Tax Rate: Double Weight (7.5 Points)
Note: This metric measures the percentage of tax on the profits of a corporation in 2023.
Labor Costs: Double Weight (7.5 Points)
Note: This metric measures the per capita income.
Formation Fees: Half Weight (1.9 Points)
Note: This metric measures the state filing fees for incorporating LLC business.
Unemployment Insurance Taxes: Regular Weight (3.8 Points)
Note: This metric measures the amount businesses have to pay to support the unemployment insurance benefit.
Business Incentives/Tax Breaks: Regular Weight (3.8 Points)
Note: This metric measures the percentage reduction of a company's tax liability to the state or federal government.
Energy Costs: Half Weight (1.9 Points)
Note: This metric measures the retail electricity price (cents/kWh).
Small Business Loan Availability: Regular Weight (3.6 Points)
Note: This metric measures the percentage of available loans for small enterprises in 2023.
Business Regulation Index: Double Weight (7.3 Points)
Note: This metric measures the percentage of loans available for small enterprises in 2023.
Population Growth : Half Weight (1.8 Points)
Note: This metric measures the increase in total population from 2022-2023.
Venture Capital Investments: Regular Weight (3.6 Points)
Note: This metric measures the amount of venture capital investments per GDP.
Share of College Educated Workforce: Regular Weight (3.6 Points)
Note: This metric measures the college educated employees based on the total workforce in 2023.
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