It will undoubtedly come as no surprise to those who live here that a”¯new study”¯has found New York is the second most expensive state to start a business.”¯
Simplify LLC”¯has released a study on the”¯Most and Least Expensive States to Start a Business,”¯using the most recent data from the U.S. Bureau of Labor Statistics, Small Business Administration and Census Bureau.
The study analyzed many factors, including the cost of labor, corporate tax rates, available commercial real estate, commercial electric bills and the health of the business environment in all 50 states and Washington, D.C.
Among the key findings were:
New York is the second most expensive state to start a business behind Minnesota.”¯Business owners in New York pay workers $62,026 on average annually, have a 6.88% corporate tax rate and an average monthly commercial electric bill of $806.07. Connecticut ranked as the 20th most expensive state. The Nutmeg State actually has a lower average annual wage than the Empire State, $60,936, and a higher monthly commercial electric bill, $1,030.34. But Connecticut is a far more generous lender to small businesses, lending $41.6 million per 100,000 people to New York”™s $29.2 million. Connecticut also has more commercial space available than New York (135.9 per 100,000 people as opposed to 104.4) and thus a higher net rate of businesses born in 2021 ”“ 1.45, compared to 0.94 in New York.
Nevada is the least expensive state for start-ups.”¯Business owners pay workers $51,885 on average annually and have a 0% corporate tax rate and an average monthly commercial electric bill of $463.41.
The West is the best region for savings, the Northeast, the worst.
”¯Inflation and rising interest rates have many business owners closely watching their expenses and cutting costs. Despite the economic uncertainty, the Census Bureau reported an”¯unprecedented number”¯of businesses have formed in recent years ”“ including 429,800 in February 2023. To be one of the few entrepreneurs who survive long term, it is critical, the study said, that you factor in the cost of doing business in each state before deciding where to operate your enterprise.”¯
