Where To Start Your New Business In 2022
Starting a new business can be a daunting task for many entrepreneurs. Yet, the location you set your business up in can make a lot of difference as to whether it’s a success or not. In 2012, The New York Times noted how Delaware managed to thrive as a tax haven. Since then, several other states have followed their lead, and there are many places a business could potentially set up in the US and avoid taxes. Delaware doesn’t even figure in the top three places to set up a new business in the US anymore. Where you open your business may be as important as where you open it. Each locale has several factors that affect whether they’d make for an excellent place to set up shop. Among these elements are:
- Climate: No one wants to set up in a place that has a lot of natural disasters. Climate change is a real consideration, and many locations are being affected negatively by the looming problem. Considering the climate as a factor when choosing a state to set up in is critical.
- Costs of Labor: The labor cost of a state is based on its median household income. The higher this value, the more a business is likely to pay for labor.
- Rate of New Business Formation: People open businesses in states where it’s favorable to them. If you’re looking at setting up shop in a state, you may want to know how many new businesses open up there every year.
- Consumer spending: Income is what drives and maintains a business. Setting up a company in a state that doesn’t have an excellent track record of consumer spending is a recipe for disaster.
- Tax climate: The most crucial consideration for setting up a business is the tax rate. Some companies don’t tax enterprises or business owners at all, but others levy individual taxes, self-employment taxes, etc., as a means of making up for their tax climate.
These factors have led to a handful of states standing out as the perfect environment for starting a new business in the US.
The vast rolling plains of the state are a welcoming sight, as are the incentives the state government offers for new business owners. Montana may be one of the best (if not the best) places to set up a business in the US in 2021. Montana doesn’t have a lot of risk of natural disasters and has a decent median family income, making for good labor wages. Montana’s shortfall is in corporate taxation. The corporate tax rate sits at 6.75%, with the individual tax rate topping out at 6.9%. The state has good consumer spending records, suggesting that people are interested in buying locally and supporting businesses opened there. Montana has a pretty good track record for businesses surviving, making it one of the best locations to consider for new business owners.
2. South Dakota
South Dakota has established an Office of Economic Development that deals with helping new entrepreneurs get set up in the state. The rate of new businesses within the state is relatively low compared to other regions, but the state’s tax climate may change that soon. South Dakota has no corporate or individual tax rates at the state level, making it even more attractive to business owners or those looking to operate a top medspa franchise. There’s a meager chance of a natural disaster striking the state, and the labor costs seem to be low as well. Consumer spending was decent, showing that the economy is vibrant. The economy lags behind other states, but not by too much.
New entrepreneurs to Florida have been growing exponentially in recent years. It’s no surprise – the state has some of the best weather in the country, and it has an attractive tax climate as well. Florida has zero individual taxes, and corporate tax tops out at 4.5%. A Florida business can leverage the low labor costs since the state’s median income isn’t outrageous. Many new companies are opening in Florida recently, including those offering eCommerce product photography, but the survival rate for them is relatively low. The worst part about running a business in Florida is the increasing incidence of hurricanes in the region. It’s a concern that business owners should be aware of, but the benefits may outweigh the risks.
Location Isn’t Enough
Small businesses that pick the best location ever may thrive for a bit, but if their product or service isn’t up to their competitors’ standards, they’ll lose out. The location can only do so much to turn your business into a success. The geographic location can give you an edge and even make you more profitable on a national scale. The previously mentioned states offer some of your best options for setting up a business to capitalize on their initiatives. At its heart, business is the vehicle that helps to move the American dream. These states are just facilitating the growth and expansion of the country’s economy.