iStockphoto GOBankingRates considered nine factors to rank all 50 states on the strength of existing small businesses and startups, as well as how favorable the state’s business climate is to entrepreneurs. To measure existing businesses and startups, GOBankingRates looked at three factors: (1) the startup opportunity of the state, (2) the number of existing small businesses per capita, (3) and the survival rate of small businesses. GOBankingRates also measured how favorable a state’s business climate is to new entrepreneurs by measuring (4) productivity in the state, (5) availability of employees, (6) education level of potential employees, (7) taxes on businesses, (8) lending to small businesses, and (9) costs in the state.
Entrepreneurship is a cornerstone of the American economy, and it has reached record heights in recent years. Becoming an entrepreneur is a dream for many Americans; two in five employees hope to someday strike out on their own, according to a survey from the University of Phoenix Business School.
Location is a major factor of success when starting a new business. The 10 best states for business owners have a strong culture of entrepreneurship and high numbers of existing small businesses, as well as a high rate of survival for these companies. They also help new businesses keep up with operating expenses thanks to lower costs of living, fewer taxes and accessible small business lending.
Businesses in Rhode Island could benefit from tapping the state’s larger-than-average pool of available employees, which is equal to 6.6 percent of the state population. A higher graduation rate injects a group of graduates equal to 4.5 percent of the population into the workforce each year. Even with access to a wide pool of candidates, however, small businesses in Rhode Island face substantial financial obstacles, putting the state at No. 9 on this list. Read more…