Quitting your job to finally give that business idea of yours is a thrilling and risky proposition. Being in the right position allows you to take enough steps to be successful.
After all, the location of your business can play a big role in determining what type of employees and customers you can attract, as well as costs like taxes and payroll. To offer some help narrowing down your search, Looka.com – a website that provides branding and design tools for startups – has launched released a new ranking One of the Best US States for Entrepreneurs.
According to Luca, California is the best place if you’re ready to finally quit your day-job and start your own business. This is despite a notorious high cost of livingIncluding one of the highest corporate tax rates in the country.
Here are the top five states on the list:
- new jersey
California has long been a hotbed of new businesses, especially for the tech industry – but the Golden State has recently seen an exodus of high-profile businesses leaving the state Looking for lower costs and in many cases lower taxes. Tesla, Oracle and Hewlett Packard are among the biggest names that have moved its headquarters Out of California since 2020.
But Luca points to California’s still high concentration of small businesses and startups with fewer than five employees, and one of the best survival rates for new businesses in the country. California also ranks first in terms of annual payroll for businesses with fewer employees. “Those entrepreneurs on average are able to pay themselves and their team better,” a Luca spokesperson told CNBC Make It.
The ranking cites research from the non-profit Kaufman Foundation showing that in 2021, 82.56% Still working after his first year of new businesses in California. The national average is 81.7%, and with all the challenges new businesses face, they often need all the help they need to survive.
Just behind California is Texas, which boasts the fourth largest concentration of businesses with fewer than five employees. The Lone Star State also offers the second-largest annual payroll for businesses with fewer than five employees, and a lower-than-average cost of living—helped by the state’s lack of personal income tax.
Rhode Island sits at the bottom of the ranking, with the nation’s lowest number of new businesses and one of the worst survival rates for new businesses: just over. 77% in 2021. West Virginia sits in 49th place, ranking second to last in median household income and number of new businesses started between 2020 and 2021.
To put together his ranking, Luca says the states were judged on six criteria:
- Number of businesses with fewer than five employees
- median household income
- survival rate for new businesses
- the cost of living
- Annual payroll for businesses with fewer than five employees
- Percentage of new business in each state from 2020 to 2021
The company relied on data from the US Census Bureau, World Population Review 2022 and the Kaufman Foundation’s Indicator of Entrepreneurship.