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Posts Tagged ‘best states for small business’


The Best (and Worst) States for Entrepreneurship

August 30th, 2011 ::

By Karen Axelton

Are you considering moving your business to a new location, or just want to see how your state stacks up in comparison to others? The University of Nebraska-Lincoln’s Bureau of Business Research and Department of Economics recently released its State Entrepreneurship Index (SEI). This nationwide analysis and ranking system compares how states measure up in terms of business formation and innovation.

Developed by economists at the University, the SEI measures more than just raw business starts. It combines five key components: a state’s percentage growth in business establishments; its per capita growth in business establishments; its business formation rate; the number of patents per thousand residents and the gross receipts of sole proprietorships and partnerships per capita.

Each state is assigned a state index for each component based on how much each state’s performance is above or below the average of all state data, which has a value of 1.0. A state’s overall SEI number is the average of the five index values.

What are the best entrepreneurial states? Nationally, New York kept the top spot from the last SEI in 2008, with an index score of 2.34. Close behind were Washington (2.17), Massachusetts (2.04), New Jersey and Oregon (both at 1.93) to fill out the top five.

How about the worst states? South Carolina, with an index of 0.07, was No. 50. Arizona (0.11) was No. 49, behind Mississippi (0.32), Nevada (0.33) and Alabama (0.41).

As for the biggest movers on the list, the big winner was Oregon, which rose 40 spots (to number 5) compared to its ranking of 45 in 2008. Biggest loser? Nevada dropped 40 spots to number 47 compared to its rank of number 7 in 2008.

The SEI combines detailed data from the Bureau of Labor Statistics, the Internal Revenue Service Statistics of Income Bulletin, the U.S. Census Bureau and the U.S. Statistical Abstract.

Of course, moving your business shouldn’t be a decision based on one ranking, but indexes like the SEI can give you insights into what states are thriving—or struggling—in today’s economy.

Image by Flickr user Sue Clark (Creative Commons)

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Posted in Small Business, small business, Uncategorized | 1 Comment »

Where Are the Best States to Do Business?

May 24th, 2011 ::

By Rieva Lesonsky

Are you considering moving your business to a new location, or expanding outside your home state? Maybe you’re thinking about launching a second business, but you’re not crazy about the economic climate where you’re currently located. If any of these applies to you, you’ll want to take a look at CNBC’s special report on the best states for doing business. CNBC releases these results every year; the 2011 results will be out in late June, but in the meantime, I thought it was worthwhile to examine the 2010 results.

CNBC uses public data to score all 50 states on 40 measures of competitiveness, then separates those metrics into 10 broad categories (below), using input from business groups. Here are the 10 categories:

  1. Cost of doing business looked at the tax burden in each state, including individual income and property taxes, business taxes and other taxes, as well as utility costs, average wages, state workers’ compensation insurance and the cost of office and industrial space.
  2. Workforce measured the state’s average education level, the numbers of available workers and presence of union membership, as well as the relative success of each state’s worker training programs.
  3. Quality of life included local attractions, the crime rate and health care.
  4. Economy included the basic indicators of economic health and growth, economic diversity, and the number of major corporations located in the state.
  5. Transportation and infrastructure can be important to any business. The study assessed the value of goods shipped by air, land and water, the availability of air travel in each state, and the quality of the roads.
  6. Technology and innovation evaluated the states on their support for innovation, the number of patents issued to their residents, and the deployment of broadband services.
  7. Education is important both in providing a good workforce and in attracting employees seeking good schools for their children. The study looked at traditional measures of K-12 education including test scores, class size and spending, as well as the number of higher education institutions in each state.
  8. Business friendliness ranked states based on the perceived “business-friendliness” of their laws and regulations.
  9. Access to capital focused on the availability of venture capital in the state.
  10. Cost of living included housing, food and energy costs.

Based on those categories, here are the overall Top 10 for 2010:

  1. Texas
  2. Virginia
  3. Colorado
  4. North Carolina
  5. Massachusetts
  6. Iowa
  7. South Dakota
  8. Minnesota (tied with Utah for 8th)
  9. Utah
  10. Georgia

CNBC says that the 2011 rankings will take states’ financial health into greater account, since state budget crises are having a major effect on business.  To find out where your state fell in 2010 and to view rankings for each of the 10 categories, see the full survey results here. And be sure to get the scoop on the 2011 rankings.

Image by Flickr user Link 576 (Creative Commons)

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Posted in Small Business | 2 Comments »