Around one-half of small businesses fail to make it past their 5th anniversary, according to US News. One of the main reasons why small corporations fail is because they have cash flow problems. But, if you’re smart and start up your biz in one of America’s most profitable states, it’s much more likely to succeed for the following reasons.
Low tax rates
It has just been revealed that America is likely to agree to a minimum corporate tax rate of 15%. This is to stop businesses from dodging taxes by stashing cash in states that have no taxes, such as South Dakota which was recently described as a ‘tax haven’. Thankfully, this 15% levy will only impact big businesses with high profits, so new start-ups don’t need to worry. An analysis of state business tax conducted by the Tax Foundation lists Wyoming, South Dakota, Alaska, Florida, and Montana as the best states for business taxes combined. There is no corporate income tax in Wyoming, South Dakota, or Alaska, which makes them very attractive prospects. Sales tax is another tax to consider. Alaska’s rate is the lowest at just 1.76%, followed by Hawaii at 4.44% and Wyoming at 5.39%.
When it comes to starting a business, you want to make as much money as possible. Therefore, you need to be based in a state with a sizable population that has plenty of cash. California, Texas, and Florida are the most populated states, with an excess of 20 million people living in them each. But when it comes to the states with the biggest incomes, the District of Columbia, Massachusetts, and Connecticut come out on top. The biggest spenders live in other states, though. Residents in Vermont, Washington D.C, and Nevada spend big on wedding jewelry and considerably more than people in other states. Engagement ring shoppers in these states spend between $6,660 and $9,329 on jewelry for their loved ones. If you’ve got a similar type of business, it’s certainly worth thinking about starting up in one of these three states.
CNBC reports that Texas, Oklahoma, and Kentucky are the top three states to start a business when you factor in all business costs. Key things to consider when starting a business are premises costs and utilities. US News states that Washington and Arizona spend the least amount of money on utilities, so it’s worth considering this when searching for a location for your business. If you’re running a business which relies on traveling around, you’ll need to think about gas costs. As of June 2021, the three states with the lowest gas costs were Mississippi, Louisiana, and Missouri. But by September, the AARP reported that Alaska’s gas costs were the lowest of all states, followed by Texas and Mississippi.
Finding the right location for your business can be a daunting prospect. The good news is that plenty of states rank highly for multiple business-related expenses, meaning your business is more likely to succeed if you choose to operate from one of them.