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The Top States to Start a New Business In

Posted by : Premraj | Posted on : Friday, December 18, 2020

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The location you choose to set up shop can make or break your business. Should you launch your brand in population-dense cities, or is it better to start in a state with fewer entrepreneurs? Unfortunately, more people doesn’t necessarily mean you’ll get more customers, and neither does less competition mean your business will appeal to the masses. There are a lot of aspects that need to work for a company to succeed. Financial factors such as filing fees, tax rates, and utility costs also affect how long you can keep your business open. Here are the states that are financially friendly to new brands:

Oklahoma

Oklahoma has a high rate of new entrepreneurs and a high survival rate for startups, with most new companies surviving their first year. The Oklahoma Secretary of State gives a step-by-step guide on starting a business in the state such as which documents can be filed online and which need to be filed through the mail. Fees for filing your business range from at least $50 for corporations and $100 for domestic LLCs.

Utility costs can reach $17.95 for water, but Oklahoma enjoys one of the lowest rates for gas and electricity, the latter being 7.31 cents per kilowatt hour. Tax rates differ depending on the business type. The largest corporations are taxed at 6%. LLCs are “pass-through entities”, meaning the individual owners are taxed rather than the business, enjoying rates between 2 and 5.75%. The minimum wage for Oklahoma is the regular $7.25 an hour.

Texas

The economy in this state is the second largest in the United States, with most of the money being made from the oil and gas industry. That might make starting a business in Texas seem difficult, especially with a flat fee of $300 for filing any business. However, Texas is relatively affordable in terms of property prices. .

As with Oklahoma, the minimum wage is $7.25 an hour. However, the working age population in Texas is rising, so there is a lot of talent to go around. It would also be good to know that state businesses reporting more than $10 million in income are only subjected to a 1% tax rate.

Virginia

Starting a business in Virginia can be a very straightforward process, with businesses only being required to register and file their business with the corresponding state and local agencies. Fees for these generally only cost $10, but if you’re forming an LLC in Virginia, you would owe an additional $100 for filing your Articles of Organization with the Virginia State Corporation Commission (SCC) Clerk by mail or online. There’s also a small annual fee of $50 for businesses in the state.

The minimum wage in Virginia is also at $7.25 an hour as of now, but it is set to increase about a dollar every year. Still, business owners can find highly educated potential employees in Virginia, so they should be prepared to pay the corresponding wages.

Wyoming

New businesses in Wyoming have a very high chance of surviving their first year, while existing businesses have a less than 2% chance of closing down. Starting a business in Wyoming requires a filing fee of $25 for nonprofit entities and usually $100 for other types of businesses. Organizations are required to file annual reports to stay in legal standing.

As with the aforementioned states, the minimum wage for Wyoming is $7.25 an hour. Unfortunately, the work-age population is declining in the state. But it makes up for this by having a high rate of entrepreneurs, with almost 50% of the population owning some part of a business. You should also be aware that Wyoming does not collect corporate tax, individual income tax, or gross receipts tax, making it friendly to new business owners.

Already established your business but are wondering if you’ve made the right choices? Check out our recommended methods for measuring the success of your business to see how your brand is faring.

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