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STATEWIDE— A new study from the personal finance website Wallethub says Indiana is the 20th best state to start a business.
The U.S. Bureau of Labor Statistics says about one-fifth of all startups typically don’t survive past the first year of operation. Wallethub ranked Utah as the best state to start a business while Rhode Island came in last in the study.
“Starting a business is a difficult and risky process, but where you live can highly influence your chances of success. 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,” said Wallethub Financial Analyst Cassandra Happe.
Indiana ranked 8th in business costs, but 29th in access to resources, and 26th in business environment. The factors that went into business environment were things such as average length of work week and growth in small businesses. Access to resources involve things like financial accessibility venture investment amount per capita. Business costs include office-space affordability and labor costs along with cost of living.
Wallethub determined each state’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank-order our sample.
Happe says outside of the currently difficult economic conditions, there are plenty of other reasons that startups fail, with a “bad location” being among the most common.
1. Thoroughly Research Your Market:
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Before diving in, conduct thorough market research to understand your industry, target audience, and competitors. Identify gaps in the market and ensure there’s a demand for your product or service. A strong understanding of your market will guide your business decisions and set you up for success.
2. Create A Solid Business Plan
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Outline your business goals, target market, competition, and financial projections in a comprehensive business plan. This document serves as a roadmap for your business and is essential for securing funding from investors or lenders. Regularly revisit and update your business plan as your company evolves.
3. Focus on a Unique Value Proposition:
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Differentiate your business from others by offering things that stand out. Clearly communicate what sets your product or service apart from the competition and why customers should choose you. A compelling value proposition helps attract customers and build a strong brand identity.
4. Choose a State Or Location That Fits Your Needs Well
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You should establish your business in a state that has a strong market in your particular niche, with easy access to relevant suppliers. For example, Jeff Bezos started Amazon in Washington in part because of the tech hub around Seattle and the fact that the state’s small population would minimize how much state sales tax they had to collect. Other business-friendly things to look for in a state include low business taxes, a large working-age population and a strong overall economy.
5. Manage Finances Wisely
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Keep a close eye on your finances from the start. Develop a realistic budget, monitor expenses, and set aside funds for unexpected costs. Hire an accountant or use accounting software to ensure accurate financial records. Effective financial management is key to the long-term sustainability of your business. Don’t cut corners when it comes to things like licenses and insurance, and don’t put all of your personal income into a business venture.
