Business Survival Rate: The Best State To Launch a Startup

Forming the next big startup is certainly not an easy task, but the outcome of running your own business is a dream for many. However, 20% of businesses fail in their first year, 30% in the second and 50% within five. So, what if we told you you could make your chance of your business survival rate higher?

Business Survival Rate

Entrepreneurs seeking to form a startup need to think very carefully about several factors before kickstarting everyday business, with location being a top priority. In the US, there are some states which will provide a better business-growth environment.

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A new study from Comparisun has analysed all 50 states in the US, looking at factors such as business survival rates, the number of business applications and college graduates in the area to find out which are the best US states to launch a startup.

Top 10 US States For Business Survival Rate And Other Key Start-up Metrics (and their overall weighted score)

They Comparisun team have compared each of the 50 US states on new business applications, year-on-year application growth, business survival rate, the rate of new entrepreneurs, corporate tax rate, the share of college-educated population, labor cost and cost of living.

  1. Texas - 77.77
  2. Florida - 69.75
  3. Ohio - 66.02
  4. Colorado - 64.06
  5. Arizona - 64.02
  6. Utah - 63.89
  7. California - 63.50
  8. North Carolina - 63.50
  9. Georgia - 62.66
  10. Oklahoma - 62.54

Texas is by far the best place to begin a new startup venture, with an overall weighted score of 77.77/100. The talent pool is deep, their business survival rate is more than promising and the tax benefits are certainly attractive.

The top states for business survival rates are South Dakota (56.00%), Massachusetts (55.20%) and Minnesota (54.50%).

Bottom 10 US States For Startups (and their overall weighted score)

  1. Rhode Island - 38.06
  2. Delaware - 42.74
  3. West Virginia - 42.98
  4. New Hampshire - 44.27
  5. Hawaii - 44.32
  6. Nebraska - 45.88
  7. North Dakota - 48.12
  8. Connecticut - 48.23
  9. Vermont - 51.15
  10. Kentucky - 5.16

At the bottom of the list is Rhode Island with an overall score of 38.06 and a business survival rate of 47.20%. New business application growth is in the minus at -29.07%. Just behind in positions 49 and 48 are Delaware and West Virginia.

When it comes to corporate tax rates, Pennsylvania has the highest at 9.99%. Minnesota is in a close second place with 9.80%. Texas, Ohio, Wyoming, South Dakota, Washington, Nevada and Alaska all sit at 0% which is a huge benefit for new startups.

Cost of living is a vital factor for starting up a business. Often, in the beginning, the owners money will go into the business mission and of course, you will have to keep the power (you!) behind the business moving and energised. Hawaii is the most expensive state to live comfortably and Mississippi is the least.

The best place for labour cost is Michigan, the state with the highest share of college-educated individuals is Massachusetts and Arizona has seen the highest business application growth year on year.

Business Survival Rate

Startup



About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver