The Best US States for Startups in 2021

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Dec 17, 2020

Starting a business is hard, and making it thrive in the ever-competitive market is even harder. There are millions of businesses in the United States, and new ones are launched every day. Sadly though up to 75% of startups fail. With such a high rate for failure, entrepreneurs must ensure that every step in the process of starting their business is well thought out, and that includes their place of business. Selecting the right place in which to launch a business or grow an existing one is no easy feat. So, if you’re an aspiring entrepreneur looking to try your hand at launching your own business, these are the best states to look into:

Texas

The Lone State, which has the second-biggest economy in the United States, is a great place to launch your business because of several factors. The state has a business-friendly climate, with a regulatory environment that is conducive to successful business operations. Texas state laws are straightforward and easy to comply with, making it easy for entrepreneurs to start or expand their business in the state. It also has a wide variety of non-profit and government-backed funding opportunities for small businesses. Lastly, Texas attracts a lot of entrepreneurs due to the fact that it does not have an individual income tax or corporate income tax. As such, it’s no wonder that the state has continually ranked as the best state for business, according to Business Facilities.

Utah

There are many benefits to launching a sole proprietorship or starting your own LLC in Utah. From free one-on-one management consulting from Utah’s Small Business Development Center to a cost of doing business that’s 2% below the national average. Utah also ranked third in Forbes’s list of Best States for Business in 2019, as it’s one of the fastest-growing economies in the country. The state also offers cheap real estate, a supportive regulatory environment, and an abundance of talented people, from engineers to people in marketing and sales. Lastly, it has a fast-growing technology sector and is considered to be a successor to Silicon Valley, often named among the cities that will follow in Silicon Valley’s footsteps of creating highly successful tech businesses.

Florida

Another great state to launch your startup in is Florida, one of the United States’ economic powerhouses, as it has the fourth-largest economy in the nation. The Sunshine state is a promising and cost-effective location for startups, as it’s home to several startup hubs that offer ready access to capital. It also offers a talented and diverse workforce, so it can easily provide your business’ demand for skilled employees. And just like Texas, it does not have a personal income tax, making it a highly attractive state for pass-through entities, such as LLCs. In addition, Florida has one of the world’s most extensive multi-modal transportation systems, featuring international airports, deepwater shipping ports, extensive highway, and rail networks, and multiple hubs.

Colorado

Rounding up our list is the Centennial State, Colorado. The state has a robust economy and an appealing outdoor lifestyle that has attracted a lot of young workers, so much so that LinkedIns Workforce Report shows that it is the second-most moved-to by 20- and 30-somethings (according to its members). And with budding startup communities in Boulder and Denver, Colorado’s startup scene has been steadily growing. Adding to this growth is the help from local companies, who have been raising billions in venture capital and seeing large exits. The state’s active community of entrepreneurs also gives Colorado businesses a supportive environment, making it easier to operate and network in the area. All these make Colorado a great place for you to kick off your business venture.