Entrepreneurs and business owners need look no further than the Tar Heel state to set up shop — North Carolina came out on top in a new study of the best states to start a business.
The study, conducted by Fit Small Business, cited the state’s labor market and taxes as driving an ideal environment for business owners. Fit Small Business, out of New York City, says it provides research to help small business owners make wiser decisions.
The researchers used data from the U.S. Bureau of Labor Statistics, the Kauffman Foundation and the Small Business Administration to rank states on seven categories — access to capital, startup activity, taxes, cost-of-living, labor market, quality of life and cost of starting a business.
The study took corporate, individual income, unemployment insurance, property and sales taxes into account, ranking North Carolina 11th nationally for tax rates. At 3 percent, North Carolina’s corporate tax rate is the lowest of any state levying a corporate tax, according to the Tax Foundation, and is set to be reduced to 2.5 percent beginning in 2019 after to the North Carolina General Assembly’s latest budget.
Raleigh’s educated population and its high-quality research facilities earned it the top spot among cities statewide for starting a business. More than 40 percent of Raleigh’s population over 25 held at least a four-year degree, compared to just over one-third of Americans nationally.
The state’s startup activity also ranked highly — a category that took the rate of entrepreneurs and the survivability of business into account.
But those looking for venture capital investments and small business loans may turn their attention elsewhere. The state was ranked 34th in “access to capital.”
The cost of starting a business, based on per capita income and median commercial rent per square foot per year, fared worse for North Carolina than a majority of states as well. Data from the Bureau of Economic Analysis reveals North Carolina’s 2016 per capita income of $42,002 lags behind the national average of $49,571.
In addition to North Carolina, Utah, Texas, Indiana and Montana rounded out the top five states for starting a business.