What makes Utah the top state to start a business in?

Around 4.4 million businesses are started in the United States every year, according to the Commerce Institute. If the 9-to-5 simply isn’t cutting it anymore, maybe 2024 is actually the year to open up that business you’ve always dreamed of starting. The entrepreneurial spirit provides opportunity by creating more jobs and economic growth, experts say, allowing the American dream to live on, whether through side hustles or full-scale businesses. That doesn’t mean it will be easy or successful; “approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years,” per Investopedia. “Only 25% of new businesses make it to 15 years or more.” But, not all hope is lost.

Where are the best states to open a business?

Where you live can improve your chances of creating a successful company, according to a WalletHub study that examined the success rates of new businesses in all 50 states. “Starting a business is a difficult and risky process, but where you live can highly influence your chances of success,” said WalletHub analyst Cassandra Happe. “Before establishing a business in any location, make sure to do research to ensure it’s an ideal place for your customer base, has enough labor and supplier availability, and suits your needs when it comes to financing.”

Top 5 best states for new businesses:

1. Utah.

2. Georgia.

3. Florida.

4. Idaho.

5. Nevada.

Top 5 worst states for new businesses:

1. Rhode Island.

2. Connecticut.

3. Alaska.

4. Maryland.

5. West Virginia.

It may not come as much of a shock that Utah is at the top of the list for new business success following its ranking by U.S. News & World Report as the state with the best economy in 2023. Utah was dubbed No. 1 by WalletHub for a few key reasons, per the report:

• An easy state for getting business-loan financing.
• Has a 2.5% year-over-year employment growth, making it the largest in the country.
• Beneficial and affordable employee benefits.
• Companies incorporate new technology into business models to improve efficiency.

Whether in Utah or Rhode Island, opening a business is always a gamble, especially when considering supply and demand, competition and overall market conditions. However, rates for inflation are expected to decrease, “(The) average consumer price inflation should be 3.2% in 2024, compared to 4.06% in 2023 and 9.59% in 2022,” per the Federal Planning Bureau. According to Neighborly Franchising, “2024 presents itself as a promising chapter for those with a dream of starting their own business. From the growth of remote work to an increase in the need for ‘side gigs’ and ‘home-based hustles,’ there has never been a more opportune moment to take the leap.” Here are a few reasons as to why now is a good time to get started on a new business venture:

• Side hustle success: As many as 50% of Americans have a side hustle as a way to make extra income, per Yahoo Finance. “The cost of living across America has risen drastically, and it has become necessary for many households to seek additional sources of income whether this be in the form of a side hustle or a fully-fledged small business,” a spokesperson for the Small Business Blog told the Deseret News in an email.
• Improving work-life balance: As the owner of a company, you have the luxury to set your own hours. “Achieving a better work-life balance increases productivity, reduces stress and improves overall physical and mental health, per Forbes. “When business owners take regular breaks and find time for activities outside of work, it leads to more creativity and innovation, which is beneficial for the business and its success.”
• Skills shortages: As a generation begins to retire, openings in the job market allow for more demand for business opportunities. “In fact, starting a business that caters to the needs of industries with shortages can lead to a steady customer base and potential growth,” according to Neighborly Franchising.