Study: Vermont seventh worst for entrepreneurs

Vermont Business Magazine As two in five working Americans want to own their own business, leading personal finance website GOBankingRates conducted a study, released Monday, to find out which USstates offer the best conditions for Americans wanting to start a business. Vermont was seventh worst, according to the study.The study found that whileWashington,WyomingandCaliforniaare the best states for entrepreneurs,West Virginia,HawaiiandSouth Carolinaare the least-friendly states for new business.

The report states that entrepreneurs hoping to start a business in Vermont should expect to contend with high costs. This state has the fourth-worst business tax climate score in the country (tied with Minnesota and Rhode Island), as well as a cost of living that’s 20.5 percent higher than the national average. Business founders hoping to cover those costs with a loan are out of luck; Vermont has the fourth-lowest rate of small business loans in the nation, just 41.3 per 1,000 small business employees.

Vermont businesses are also held back by the state’s low GDP per capita and employee availability, the report states,as well as a higher-than-average rate of business failures. Even though the state also has the highest density of small businesses and employees of small businesses, it still ranks among the worst states for entrepreneurs.

To see how well each state fosters new business, GOBankingRates' investigated the startup opportunities and existing small businesses in each state, along with how startup-friendly each state's business climate and economy is to determine the best and worst states for entrepreneurs for 2015.

"Any entrepreneur who has the flexibility to set up shop where he or she chooses should certainly consider doing so in one of the 10 states we found that help small businesses thrive," saidCameron Huddleston, GOBankingRates' Life + Money columnist. "There are plenty of factors in each of these states that boost the chances of success."

Additional insights include:

• High Costs of Living:No. 2 worst state for entrepreneurs,Hawaii, has the highest cost of living in the nation and is burdened by high business taxes, making it difficult for new business owners to thrive.
• Local Business Climate:Wyomingranked as the No. 2 best state for entrepreneurs due to the its high per-capita GDP, availability of employees, and state small business loans, which all contribute to a healthy climate for new businesses.
• Higher Education:California,MassachusettsandDelaware, all of which rank on the "best" list for entrepreneurs, boast higher college education metrics with greater percentages of students graduating from university.

Full List of the Best and Worst States for Entrepreneurs

This study surveyed data on entrepreneurship and small business from all 50 states to rank them from best to worst. Here are the full rankings of all 50 states, from the overall best for entrepreneurs at No.1 to the worst at No. 50.

Methodology:GOBankingRates considered nine factors to rank all 50 states on the strength of existing small businesses and startups, as well as how favorable the state's business climate is to entrepreneurs. All data was sourced on Oct. 15, 2015.

To measure existing businesses and startups, GOBankingRates looked at three factors: (1) the startup opportunity of the state, (2) the number of existing small businesses per capita, (3) and the survival rate of small businesses. Startup opportunity data (1) was sourced fromThe 2015 Kauffman Index: Startup Activity Report on State Trendsand measured the rate of new entrepreneurs in the state, the portion of new entrepreneurs who were employed before starting a business, and the density of startups in the state. Data on existing small businesses (2) was sourced from the2015 Small Business Profiles for the States and Territories from the U.S. Small Business Administrationand ranked states based on the number of small businesses and small business employees in the state per capita. Lastly, the survival rate of small businesses (3) for each state sourced data from the Bureau of Labor Statistics' Business Employment Dynamics by State reports and was calculated by measuring the ratio of business creations to business deaths in 2013, the most recent year for which there is complete data.

GOBankingRates also measured how favorable a state's business climate is to new entrepreneurs by measuring (4) productivity in the state, (5) availability of employees, (6) education level of potential employees, (7) taxes on businesses, (8) lending to small businesses, and (9) costs in the state. Productivity (4) was measured by the state's per capita GDP in 2014, sourced from theU.S. Bureau of Economic Analysis. Employee availability (5) was calculated using data fromDirectEmployers on State-by-State Job Openingsand represents the portion of the population that is unemployed less the number of available jobs. Level of education (6) was calculated based on2015 college graduation rates from the U.S. Department of Educationand 2014 enrollment rates in each statesourced from the National Student Clearinghouse Research Center. This score was given half the weight of all other scores.GOBankingRates used the U.S. Chamber of Commerce's States Innovate study to source state data on business taxes (7), small business lending (8) and cost of living (9).

Several of these factors were normalized for the population of each state using themost recent population estimates from the Census Bureau.

About GOBankingRates

GOBankingRates.com is a leading portal for personal finance and consumer banking information, offering visitors the latest on everything from finding a good interest rate to strategies for saving money, investing for retirement and getting a loan. Its editors are regularly featured on top-tier media outlets, including U.S. News & World Report, Forbes, Business Insider, Daily Finance, Huffington Post and more. It specializes in connecting consumers with the best financial institutions and banking products nationwide.

Entrepreneurs hoping to start a business in Vermont should expect to contend with high costs. This state has the fourth-worst business tax climate score in the country (tied with Minnesota and Rhode Island), as well as a cost of living that’s 20.5 percent higher than the national average. Business founders hoping to cover those costs with a loan are out of luck; Vermont has the fourth-lowest rate of small business loans in the nation, just 41.3 per 1,000 small business employees.

Vermont businesses are also held back by the state’s low GDP per capita and employee availability, as well as a higher-than-average rate of business failures. Even though the state also has the highest density of small businesses and employees of small businesses, it still ranks among the worst states for entrepreneurs.

LOS ANGELES,Nov. 2, 2015/PRNewswire/ --​www.gobankingrates.com/personal-finance/10-best-worst-states-entrepreneurs/