A recent report released by the U.S. Small Business Administration provides valuable insights on which states provide the best opportunities for those interested in starting a business.
As seen in the recent post, Small Business Funding By the Numbers: What Every Entrepreneur Should Know, there are great opportunities for financing and making the leap, but knowing where to do so is a critical decision.
The federal data provides a rundown for each state on the percentage of businesses that are considered small businesses, the number of small business employees, the number and value of small business loans, business owner demographics, turnover rates, international trade impact, employment by county, and top industries.
Here is a look at some of the federal data and private analysis that points to the top five states for entrepreneurs in 2018.
1. North Dakota
North Dakota features the highest average growth of small businesses in the country and the most accessible financing, according to WalletHub.
According to the SBA, North Dakota continues to enjoy a low unemployment rate (2.9 percent compared to the national rate of 4.6 percent (November 2016 data). The median income of residents identifying a self-employed at an incorporated business was $52,392.
The most common businesses in identified industries were in construction (8,896), retail trade (8.063), and real estate/rental/leasing (7,966).
The Lone Star State placed second in the highest average growth rate and enjoys a top-five ranking for highest total spending on incentives as a percentage of gross domestic product (GDP). Texas business owners report an average income of $51,859. The SBA reported in the second quarter of 2015, Texans started 16,545 businesses employing 69,598 new jobs.
Texas small businesses with the most employees are in health care and social assistance (663,927), accommodations and food services (592,705), and construction (425,743).
Utah has the third-highest small business growth rate and second-ranked access to financing. In mid-2016, Utah’s economy grew at a rate of 3.3 percent, outpacing the country as a whole (1.2 percent).
Among companies with identified industry classifications, the top three industries in the state are professional, scientific, and technical services (43,319 companies), real estate/rental/leasing (36,103), ad retail trade (28,663).
Okies rank first in lowest overall business costs, according to WalletHub, and Oklahoma features a friendly business environment. The top industries by total employees in the state are health care and social assistance (112,829 employees), accommodations and food services (87,728), and retail trade (70,650).
Nebraska ranks in the top 10 for both business environment and low business costs. Construction (21,550 companies), retail trade (18,082), and professional, scientific, and technical services (17,312) are the top industries.
Here are the top five states for several of the other WalletHub rankings:
|Average Growth Rate||Accessible Financing||Lowest Labor Costs||Available Human Capital||Cheapest Office Space||Most Educated Population|
|1. North Dakota||1. North Dakota||1. Mississippi||1. New Mexico||1. Iowa||1. Massachusetts|
|2. Texas||2. Utah||2. Arkansas||2. Alaska||2. Maine||2. Colorado|
|3. Utah||3. Iowa||3. West Virginia||3. Louisiana||3. South Dakota||3. Maryland|
|4. Florida||4. Mississippi||4. Alabama||4. West Virginia||4. Nebraska||4. Connecticut|
|5. Nevada||5. West Virginia||5. Kentucky||5. Georgia||5. Minnesota||5. New Jersey|
No matter where you live, Benetrends offers expert advice and access to capital to help companies grow. Benetrends pioneered the use of an innovative funding strategy that leverages existing 401(k) and IRA funds to provide access to funds that quickly allow business owners to start and grow their companies.
To learn more about how Benetrends can help your small business, schedule a consultation.