Vermont ranked low as place to start a business

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Vermont ranked low as place to start a business

Mon, 07/08/2019 - 12:09pm -- tim

Vermont Business Magazine The personal-finance website WalletHub today released its report on 2019’s Best & Worst States to Start a Business. Vermont ranked 43rd, as the Northeast in general and New England in particular ranked low compared to states South and West. Vermont also ranked low in the sub-categories of growth in new startups, length of work week and was dead last in workforce availability. Vermont ranked high in state incentives.
 
To determine the most fertile grounds for planting and growing new ventures, WalletHub compared the 50 US states across 26 key indicators of startup success. The data set ranges from financing accessibility to availability of human capital to office-space affordability.

Starting a Business in Vermont (1=Best; 25=Avg.):

  • 49th – Avg. Growth in Number of Small Businesses
  • 16th – Office-Space Affordability
  • 31st – Labor Costs
  • 50th – Availability of Human Capital
  • 44th – Avg. Length of Work Week (in Hours)
  • 41st – Cost of Living
  • 38th – Industry Variety

WalletHub compared the 50 states across 26 key indicators of startup success to determine the most fertile grounds in which to launch and grow an enterprise.

Source: WalletHub

Best States to Start a Business

Overall Rank
(1=Best)

State

Total Score

‘Business Environment’ Rank

‘Access to Resources’ Rank

‘Business Costs’ Rank

1 Texas 61.05 1 11 30
2 Utah 60.95 7 2 26
3 Georgia 58.12 5 17 13
4 North Dakota 57.68 2 19 32
5 Oklahoma 57.58 8 36 1
6 Florida 56.75 4 20 21
7 Arizona 54.39 9 12 29
8 California 54.30 3 3 46
9 Montana 53.71 11 30 8
10 Colorado 52.67 6 18 34
11 Idaho 52.10 12 44 7
12 Washington 52.00 13 1 43
13 Mississippi 51.39 28 26 2
14 North Carolina 50.86 24 10 22
15 Louisiana 50.36 15 37 17
16 Kansas 50.33 17 27 20
17 Minnesota 50.32 21 5 35
18 Michigan 50.19 31 23 6
19 Nebraska 50.09 25 21 9
20 Tennessee 49.11 16 42 19
21 Kentucky 49.00 26 40 5
22 South Dakota 48.57 38 33 4
23 Maine 48.56 18 45 14
24 Indiana 48.48 33 29 11
25 Nevada 47.85 14 47 28
26 Oregon 47.80 19 13 33
27 New Mexico 47.69 34 28 18
28 Alaska 47.06 10 16 45
29 Alabama 46.82 36 38 10
30 Wisconsin 46.61 29 31 24
31 Arkansas 46.60 32 43 12
32 Missouri 46.46 35 25 25
33 Wyoming 46.22 20 39 31
34 Ohio 46.05 42 35 16
35 Illinois 45.33 43 8 40
36 Massachusetts 45.11 27 7 42
37 Iowa 44.86 39 32 27
38 South Carolina 44.85 41 48 15
39 Virginia 43.51 22 34 38
40 Maryland 43.42 23 9 47
41 West Virginia 43.36 49 41 3
42 New York 42.25 37 6 49
43 Vermont 41.35 45 50 23
44 Delaware 40.66 40 14 44
45 Pennsylvania 40.18 47 22 37
46 Connecticut 39.31 48 4 48
47 Hawaii 38.05 30 49 41
48 New Hampshire 37.94 46 46 39
49 New Jersey 36.42 44 15 50
50 Rhode Island 35.29 50 24 36

 

Methodology

In order to determine the best and worst states to start a business, WalletHub compared the 50 states across three key dimensions: 1) Business Environment, 2) Access to Resources and 3) Business Costs.

We evaluated those dimensions using 26 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the most favorable conditions for new-business creation.

Finally, we determined each state’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank-order our sample.

Business Environment – Total Points: 50

  • Average Length of Work Week (in Hours): Double Weight (~5.88 Points)
  • Share of Engaged Workers: Double Weight (~5.88 Points)
    Note: This metric is based on Gallup’s “State of the American Workplace” report. Gallup defines engaged employees as those who are involved in, enthusiastic about and committed to their work and workplace.
  • Growth in Number of Small Businesses: Full Weight (~2.94 Points)
  • Startups per Capita: Full Weight (~2.94 Points)
  • Growth of Average Business Revenues: Double Weight (~5.88 Points)
  • Five-Year Business Survival Rate: Full Weight (~2.94 Points)
  • Industry Variety: Full Weight (~2.94 Points)
  • Industry-Cluster Strength: Full Weight (~2.94 Points)
    Note: This metric is based on data from the U.S. Cluster Mapping Project. “Industry-Cluster Strength” refers to the level of high employment specialization of a cluster, which is defined by the U.S. Cluster Mapping Project as a “regional concentration of related industries in a particular location.”
  • Entrepreneurship Index: Double Weight (~5.88 Points)
  • Share of Fast-Growing Firms: Full Weight (~2.94 Points)
    Note: This metric measures the number of firms in each state that are included on the “Technology Fast 500” list (Deloitte report) as a share of total firms in each state.
  • “Digital States” Survey Grade: Full Weight (~2.94 Points)
  • Job Growth (2017 vs. 2013): Full Weight (~2.94 Points)
  • GDP Growth (2018 vs. 2017): Full Weight (~2.94 Points)

Access to Resources – Total Points: 25

  • Financing Accessibility: Full Weight (~3.57 Points)
    Note: This metric was calculated as follows: Total Annual Value of Small-Business Loans / Total Number of Small Businesses.
  • Venture Investment Amount per Capita: Full Weight (~3.57 Points)
  • Human-Capital Availability: Double Weight (~7.14 Points)
    Note: This metric was calculated as follows: Number of Job Openings per Number of Civilians in Labor Force – Unemployment Rate.
  • Higher-Education Assets: Full Weight (~3.57 Points)
    Note: This is based on WalletHub’s “Best Universities Ranking” report.
  • Share of College-Educated Population: Full Weight (~3.57 Points)
    Note: This metric measures the share of population aged 25 years and older with a bachelor’s degree or higher.
  • Working-Age Population Growth: Full Weight (~3.57 Points)
    Note: “Working-Age Population” includes individuals aged 16 to 64 years.

Business Costs – Total Points: 25

  • Office-Space Affordability: Double Weight (~5.56 Points)
    Note: This metric measures the per-square-foot cost of commercial office space.
  • Labor Costs: Double Weight (~5.56 Points)
    Note: This metric measures the median annual income of the state.
  • Average Annual Single Insurance Premium per Enrolled Employee: Full Weight (~2.78 Points)
    Note: This metric refers to employer-based health insurance.
  • Corporate Taxes: Full Weight (~2.78 Points)
  • Total Effective State & Local Tax Rates on Mature Corporate Headquarters: Full Weight (~2.78 Points)
  • Total Spending on Incentives as Share of GDP: Full Weight (~2.78 Points)
  • Cost of Living: Full Weight (~2.78 Points)

Sources: Data used to create this ranking were collected from the U.S. Census Bureau, Bureau of Labor Statistics, Ewing Marion Kauffman Foundation, Center for Digital Government, National Venture Capital Association, Indeed.com, Tax Foundation, U.S. Cluster Mapping Project, Deloitte, The New York Times, Gallup, U.S. Bureau of Economic Analysis, Council for Community and Economic Research, LoopNet, Federal Deposit Insurance Corporation, Kaiser Family Foundation and WalletHub research.

For the full report, visit: wallethub.com/edu/best-states-to-start-a-business/36934/