Now more than ever, aspiring entrepreneurs are pursuing their passions and looking for ways to start a business. One of the key considerations when starting a business is keeping costs low and profits high. Choosing the right place in which to open up shop can make a significant impact on the bottom line.
If you’ve been considering opening a business in the USA, some states will be more profitable than others. Here are the most affordable states in which to start your business.
Before you learn which states are the best for entrepreneurs, you need to understand the elements that play a role in affordability. Some implications affect the business itself, while others have an indirect influence by affecting the business owner.
Some key considerations include:
- Taxation – some states have higher taxes than others. Choosing a state with lower taxation means you keep more of the money you’ve earned.
- Entrepreneurial environment – is the area in a state of economic growth? These are essential components of market research when choosing a home state.
- Funding opportunities – what are the startup costs in this area when compared to funding opportunities? Some states promote entrepreneurship by offering grants and loans.
- Labor market – depending on your business venture, you may require specialized or highly-educated workers, which are more affluent in some states.
- Cost and quality of living – will you be able to afford to live in the state you work when you consider housing, groceries, and utilities? Also, the safety of the area, school options, and more.
By weighing these factors, you’ll be able to determine which state is best for your business. Keeping these concerns in mind, here are some of the most affordable states in which to start a business.
Texas is at the top of the list for affordability when considering a new business. First and foremost, cities in Texas– Houston and Austin, to name a few– have been booming in recent years. This influx of people and skilled workers has created ample opportunity for aspiring entrepreneurs.
Texas encourages entrepreneurs to open up shop in the Lonestar State with grants and funding options to support their endeavors. This is backed further by free resources, like the Texas Entrepreneur Networks, which helps business owners find investors.
Finally, utilities are affordable in Texas. The electricity plans for Texas are deregulated, creating an open market situation resulting in savings for the end-user. As Texas is such a great place to live and work, it’s the number one state for opening a new business.
Utah is another state in which to give serious consideration to opening a business. It’s one of the best states in terms of resources for business owners and offers some of the most accessible financing options. Grants and loans are abundant in Utah, and it boasts a higher economic growth rate for small businesses than Texas.
As far as the cost of living goes in Utah, it’s perfectly average in comparison to the rest of the states, ranking 27th overall. While things like groceries, utilities, and transportation are slightly lower than the national average, housing is the tipping point. The median home cost in Utah is slightly over $100,000 more than the national average.
Fortunately, Utah is also one of the best states to rent in. The average rent in Utah is about $200 less per month than the national average. Between the financing options and rent affordability, Utah is a worthy contender for the most affordable and profitable state in which to start a business.
Colorado is an entrepreneur’s dream. With low taxation and startup costs, it’s no wonder why so many Millennials are immigrating to Colorado to pursue their business goals. This state boasts a burgeoning labor force, with over fifty percent of residents holding a bachelor’s degree at minimum. In fact, Colorado is one of the most educated states in the country.
The cost of living in Colorado is slightly higher than the national average. This is primarily due to the prices in Denver and some of the more affluent areas. However, as it is a highly educated area, the average income is slightly higher than the national average, as well.
Due to the startup culture in Colorado, there are a lot of incredible resources for entrepreneurs. Denver Startup Week takes place every September and is both an educational and networking opportunity that can open doors for entrepreneurs and investors. The education tracks address everything from business growth, to being a founder, to specific industry concerns.
Make Your Move
While these are the top three affordable states for starting a business, there are many other options. Choosing the right place to start your business builds a strong foundation for growth and success.