Starting a business can be very challenging. According to the U.S. Small Business Administration, about half of all new businesses fail within their first five years. There are countless factors that can undermine a company’s chances for success and ultimately doom it. While most of these factors — such as those related to product quality, pricing, and planning — can be blamed on poor management, a business’s chances for success can also depend on outside factors.
Across the United States, the environment in which businesses operate can vary considerably. Factors like regional policy, tax codes, infrastructure reliability, availability of skilled workers, and operation costs, among others, differ from one state to the next.
24/7 Wall St. created a weighted index of 42 measures to identify the best and worst states for business. These measures fall into one of eight categories: economic conditions, business costs, state infrastructure, the availability and skill level of the workforce, quality of life, regulations, technology and innovation, and cost of living. Data sources include the Bureau of Economic Analysis, the Bureau of Labor Statistics, and the Tax Foundation, a tax policy research organization.
While some states rank better than others for their overall business climate, every state has room for improvement, and usually states that share strengths in certain parts of our index also tend to also have weaknesses in other aspects of our index. For example, while a state like Massachusetts may have a skilled talent pool as measured by educational attainment, it also has a high cost of living that can force employers to pay more for that talent. These are America’s most and least educated states.
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