It is the cheapest state to run a business – 24/7 Wall St.
Most businesses are classified as established and start-ups. Start-ups have a significant failure rate of up to 90% in the first year and 70% in the first five years. But, established businesses and start-ups have several things in common. These include the cost of labor, the cost of online access, utilities, taxes, and whether state laws are business-friendly.
Approve.com has released a new study on the cheapest states to run a business. It looked at the average annual wages in 2020, energy costs as of May 2021 in cents per kilowatt hour, the average internet price per megabit, and the corporate tax rate paid by companies in the top tax bracket. . Although the methodology may be incomplete, it is a pretty good approximation.
The study’s authors explained why they published it:
No one has said that running a business is cheap, with business owners having to balance a number of payment and procurement, onboarding and cost processes, such as staff salaries, cost of an internet connection, utility bills and taxes.
States were rated on a scale of 1 to 10, with 10 being the best number.
The state with the highest score was Texas, with a total of 8.43. The average cost of workers was quite low at $ 39,640 per person and the state has no corporate tax, which gives it a huge advantage.
Second, on the list is nearby Oklahoma with a rating of 8.16, with a relatively low labor cost of $ 37,110. Electricity was also low at $ 2.37 per kilowatt hour.
Oklahoma was followed by Kentucky (grade 7.93), Nevada (7.92), Georgia (7.84) and North Carolina (7.82).
The state that did the worst was California with a score of 5.08. Labor costs were exceptionally high at $ 47,290 and the corporate tax rate was 8.84%. New Jersey was second worst with a score of 5.14. Its cost per employee was $ 48,130. He also had an extraordinarily high top tax rate of 11.50%
Click here to read the best and worst states for business