If you’re thinking about starting a small business, you’ll want to do everything you can to give it the best shot at thriving. However, many factors contribute to the success or failure of your endeavor.
As you consider where to locate your new company, it can sometimes be smart to look to successful entrepreneurs who have come before you. Here are five elements to think about as you decide on the best place to start your startup.
1. Most popular
Built-in networking opportunities and a sense of community can be vital to an overworked entrepreneur, so you might want to choose a location that’s popular for startups.
According to The Kauffman Index, California has the highest “startup density,” the greatest number of startups per 1,000 companies. Nevada boasts the highest startup density overall, with 108.4 startups for every 1,000 firms in the state. In fact, many smaller Midwest cities are known for their entrepreneurial spirit.
2. Lowest cost of running a business
Starting a small business can be easier in a city or metropolitan area. There you will have the built-in resources, talent pool, and potential clients to pull from. But cities can be expensive places to live, and even more expensive places to establish a company. There’s the cost of office space, utilities, legal costs, and filing fees to take into account.
SmartAsset created a list of the cities with the lowest and highest startup costs. California may be the most popular state for startups, but San Jose and San Francisco are the two most expensive places to set up shop. If overhead costs are a concern, you might want to consider a city in Chattanooga, Tennessee, or Wichita, Kansas, numbers one and two on the list.
3. Highest revenue
While it’s important to take into consideration the cost of running your business, generating revenue is also important. According to Fundera’s analysis of the startups featured on the latest Entrepreneur 360 List, Boston; Scottsdale, Arizona; and Austin, Texas were the home cities of the startups that generated the highest average annual revenue.
4. Most lenient government policies
For small business owners, red tape can be a major distraction and drain on finances and resources. That said, selecting a location that is friendly to small businesses will make it easier to obtain licenses, hire employees, understand tax codes, and navigate building permits.
According to Thumbtack’s assessment of regulations in some of the largest American cities, Austin and Atlanta are very small-business friendly, Boston and Minneapolis are fairly friendly, while San Francisco is challenging.
5. Highest survival rates
If you’re looking to give your small business the best chance at long-term survival, you may want to consider a city that has a history of housing startups that make it to the five-year mark. The Kauffman Index has looked at trends in metropolitan areas and analyzed the survival rate of companies.
According to the research, Pittsburgh and the Boston Metro area have the best track record for startup survival. More than 53% of companies that have been founded in those areas have gone on to celebrate their five-year anniversaries.
As an entrepreneur, your number one priority is creating a business that you’re passionate about and that has a real shot at long-term growth. Taking these five factors into consideration can help you find a location that’s business-friendly and cost-effective.
Call Williams & Kunkel CPA today in Flower Mound at 972-446-1040 to have a chat about your business.
Source: All Business