All entrepreneurs know a few certain truths when it comes to small business. Always incorporate or form an LLC to protect your assets, conduct a search and register for a trademark to keep original work from being plagiarized, and if you’re seeking a tax friendly haven, head to Delaware or Nevada.
For all the attention Delaware and Nevada receive, it can be easy to focus solely on them and not know what other states offer small businesses. GOBankingRates recently shared some of the nation’s best and worst states to start a business in and we scoped out 8 underrated states that are worth looking into to incorporate in, based on everything from startup activity to tax climate.
From the Midwest to the Pacific Northwest, you might be surprised at which locations offer entrepreneurs the most bang for their business’s buck!
While the Golden State has a reputation of being one of the most expensive ones to incorporate in, it’s also incredibly populous and small business friendly. From Northern to Southern California, lots of potential employees and customers means a strong business survival rate—the highest out of any state.
While it might be pricey to rent and do business, entrepreneurs on a budget can rest easy knowing that California offers the fifth-highest rate in the country for securing small business loans.
With no personal income or state tax, the Sunshine State is unique for having one of the lowest tax burdens in the United States.
It also basks in many other strong small business stats, including having the second-highest density of startups in the country and passed Benefit Corporation legislation in 2014, joining 30 other states in the movement.
The Show Me State is full of surprises, including its quiet but fast growth of new startups. In 2014, Missouri welcomed over 4,800 new businesses to the city of Saint Louis.
In addition to providing a lower cost of living, Missouri offers entrepreneurs an investment fund, the Missouri Technology Corporation, to invest in their businesses. The group also works alongside a private investment group for extra financing assistance.
A longtime favorite with entrepreneurs, Oregon offers startups plenty of support by way of low taxes, educated and available employees, and a higher-than-average GDP per capita, which ensures the local economy is going strong.
How’s the funding situation looking up? In the Beaver State, the future for startups is so bright you’ll need shades—the ratio for entrepreneurial funding stands at 80.2 loans per 1,000 small business employees.
Everything’s bigger in Texas… Even the small business scene! Tying for the fourth-highest density of startup businesses in the country, the Lone Star State has no personal income taxes for residents and offers access to more loans with lower business taxes than most states.
The incentives for small business just keep rolling in, as Texas boasts a large population and ninth-highest GDP in the nation of $61,136 per-capita.
With a nickname like the Beehive State, how could Utah not be full of small business buzz? Utah has an A+ grade when it comes to friendliness, tax code, regulations, and ease of starting a business.
The state also offers the ability to incorporate as a Benefit Corporation and has the third-highest density of startups in the United States, with 93.5 startup businesses per 1,000 firm population.
The Old Dominion State is poised for major growth in 2016 and beyond as its startup economy continues to expand. Matching Utah with A grades in ease of starting a business, friendliness, and ease of hiring, and being one of the first states to immediately embrace Benefit Corporations, Virginia takes pride in its thriving business survival rate.
As reported on GOBankingRates, the state has the highest ratio of business creations to closures, with double the amount of establishments created than closed.
Holding the number one spot is none other than the Cowboy State. What Wyoming lacks in a huge population it more than makes up for with its small business friendly tax climate—a climate that might even outshine Delaware or Nevada soon enough. Wyoming has a 0% income individual tax, corporate income tax, and gross receipts tax with a 4% sales tax, allowing entrepreneurs to keep more of their earnings.
Small businesses survive and thrive in Wyoming, especially because they employ 23% of the state’s population. Time to giddy up and incorporate in Wyoming? We think all signs point to yes!
If you’re curious about the other 42 states, check out this interactive map to learn about business financing across the U.S.
Also, don’t miss these city-by-city breakdowns of New York, California, and New Jersey.
Did we leave an underrated state to incorporate in off our list? Leave us a comment and let us know!
Good to know -- thanks, Deborah!