Dive Brief:
- WalletHub released a ranking this week of the best and worst states to start a business in 2017, with North Dakota, Texas and Utah taking the top three spots. At the bottom were Maryland (48), New Hampshire (49) and New Jersey (50).
- WalletHub asked analysts to compare states across 20 factors that indicate startup success for the ranking. For example, North Dakota and Utah had the best access to financing while New Mexico and Alaska had the highest accessibility of human capital. Other factors included the affordability of office space and workforce education level.
- North Dakota has 205.92 startups per 100,000 residents. West Virginia, the state with the lowest startup-per-capita, has 69.68, according to a press release.
Dive Insight:
Business startup activity has increased nationwide for the last three years, according to a study by the Kauffman Foundation, which is comparable pre-Recession levels. With the Trump administration pushing a lower corporate rate, even more Americans could become interested in starting a new business. Where to start new business, though, is a crucial topic — and being in a bad location is one of the most common reasons that businesses fail.
To improve their rankings, states should consider policies which would support the growth of small businesses, especially in terms of financing accessibility, according to Jill Gonzalaz, a WalletHub analyst. That could include programs that offer small loan amounts with little or no collateral.
"That way, even low-income residents can find the funds to start their own business," Gonzalaz told Smart Cities Dive. "Further incentives for small businesses could be sales tax refunds, cash grants, loans or loan guarantees and property tax abatement."
