Starting a business is difficult, no matter where you are trying it. However, he can help install a store in a place where costs – rent and labor costs at corporate taxes – are lower. If you are currently living on one or the other of the American ribs, this could mean going further inland, according to a recent classification Online advisor to small Simplifyllc businesses.
The cheapest American state to start a new business in 2025 is UTAH, according to Simplifyllc, which has classified each state according to the affordability for companies. The range of factors he considered included the basic costs of companies, such as corporate tax rates and companies’ deposit costs, as well as the cost and availability of workers, average costs of commercial rent and public services, as well as the overall health of commercial environment of each state.
The “hive state” has some of the lowest taxes in the United States, with a highest rate of 4.65%, as well as low public service costs and one of the lowest annual wages to just under $ 64,000, Simplifyllc said last month, citing data from the American work statistics.
These statistics helped Utah mark well in the 2024 CNBC ranking of the best states for companies, where the State Classified 13th in total.
Each of the next nine states in the western or midwest ranking. None is located on a coast.
Here are the 10 cheapest states to start a business, according to Simplifyllc:
- Utah
- South Dakota
- Colorado
- Wyoming
- Montana
- Idaho
- Nebraska
- Kansas
- Nevada
- North Dakota
In many cases, entrepreneurs need a loan to start a new business. UTAH residents received $ 15.4 million in commercial loans per 100,000 residents of the Small Business Administration, the second highest total in the country. Colorado led this category, with $ 15.7 million in loans per 100,000 residents.
The Northern Dakota ranked second on the Simplifyllc list. Its status has been reinforced by the fact that it has one of the lowest corporate tax rates in the country, between 1.4%and 4.3%, and one of the highest participation rates, to 68.8%, according to data from the Federal Reserve of Saint-Louis.
Simplifyllc calculated its classification using data from the census office, the Bureau of Labor Statistics, the Federal Reserve, the National Association of Real Estate Agents, SBA and the Tax Foundation to assess the 50 states of the country in eight categories:
- Company tax rate
- Business deposit fees
- Average annual income
- Participation rate in the active population
- Percentage of adults with at least one baccalaureate
- Average monthly commercial electricity bills
- Average rent, on foot in square feet, for commercial real estate
- Amount of loans to small businesses per capita
A Lack of money is generally the biggest obstacle Facing most potential entrepreneurs who plan to launch a new business. It is also The most common reason for which companies end up failing. This is why it is so important for entrepreneurs of make full accounting of their finances – both how much money they must spend and to what extent their funds can obtain them – before deciding when and where to start a business, Experts say.
“For entrepreneurs who have the possibility of choosing where they want to start their business, it is clear that some states will allow you to save money in various areas related to companies, which could help to propel your business to the next level,” noted Simplifyllc.
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