Bob & LBF in the Morning

Bob & LBF in the Morning

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Worst States For Startups

Don’t Start A Business in These 3 New England States, According to New Report

Thinking of starting a business? Well, location can make or break you.

Worst States For Startups

About one-fifth of all startups typically don’t survive past year one of operation, according to the U.S. Bureau of Labor Statistics. Nearly half never make it to their fifth anniversary.

There are plenty of other reasons that startups fail, with a “bad location” being among the most common.

“Starting a business is a difficult and risky process, but where you live can highly influence your chances of success. Before establishing a business in any location, make sure to do research to ensure it’s an ideal place for your customer base, has enough labor and supplier availability, and suits your needs when it comes to financing,” said Cassandra Happe, a Wallet Hub analyst. “Utah is the best state for starting a business because businesses have greater access to loans than in any other state. Utah has the largest annual employment growth in the country, at nearly 2.5%. Having ready access to capital and being in a state where business is booming can mean the difference between a startup thriving and dying during its first few years.”

Choosing the right state for a business is crucial to its success.

So what does a state need? Access to cash, skilled workers and affordable office space, to name a few. These attributes can help new ventures not only take off but also thrive.

WalletHub.com did a recent study to find out the best and worst states in which to start a business.

In order to determine the best and worst states to start a business, WalletHub compared the 50 states across three key dimensions: 1) Business Environment, 2) Access to Resources and 3) Business Costs.

It didn’t turn out well for New England.

In fact, three New England states landed in the bottom 10.

  • #45 New Hampshire

    Between March 2019 and March 2020, 5,254 New Hampshire establishments opened and 4,837 closed, for a net increase of 417. Employment expanded at 10,780 and contracted at 10,677. Small businesses accounted for 5,233 openings and 4,817 closings, according to the US Small Business Administration Office of Advocacy.

  • #49 Connecticut

    According to Lending Tree, Connecticut ranked 16th in the category of businesses failing within the one year mark. Connecticut ranked 11th in the 5 year and 10 year rank, as well. The information industry — which includes processes like producing and distributing information and cultural products and processing data — has the highest percentage of businesses that fail in the first year (26.4%), according to Lending Tree.

  • #50 Rhode Island

    New businesses in Rhode Island face the second-highest closure rate in the U.S., according Lending Tree. In 2022, private sector businesses in the Ocean State experienced a 27.2% closure rate in their first year, compared to the national average of 20.8% – an increase from the previous year’s report, when 18.4% of businesses throughgout the U.S. closed in their first year.

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