One of the biggest steps in a new business' financial plan should be figuring out where to set up shop. It may not be as simple though as looking for a vacant storefront; you might want to consider first the different speed bumps state and federal governments could throw in your way.
Recently the Small Business and Entrepreneurship Council took a look at tax rates for both companies and individuals for all 50 states accounting for a variety of different taxes imposed. Most states with favorable ratings were located in the southern or midwestern portions of the U.S. with states on the east and west coasts getting the worst reviews. The figures appeared consistent on everything from corporate taxes to personal income, gasoline purchases to wireless access, and especially in property taxes.
Building on that data, Thumbtack.com presented a Small Business Friendliness study, showing the same states with the lowest taxes were more likely to have fewer laws hindering business startup and hiring processes. States were assessed by median income, minimum wage, unemployment rates and even population density to determine which could prove the smartest part of a new business' financial plan. They were also graded on which had the worst economic health, a figure reached by directly asking business owners how they felt their companies were faring in their current locations.
"Although Texas and Idaho clearly come out on top as the nation's friendliest states towards small business, entrepreneurs value a lot more than just low tax rates," said Thumbtack's co-founder Sander Daniels. "Easy-to-understand licensing regulations and well-publicized training programs are critical tools necessary to support small businesses."
If you want to go in a completely alternative direction and conduct business from the same place you do your online banking, the internet is still an appealing option for some business owners. As long as you never establish a physical storefront, sales tax will be left to the consumer to handle according to Inc magazine. Determining whether you qualify as a physical entity in a state can be tricky, but organizations like the Sales Tax Institute offer information online to help you determine where you fall.
Regardless of where and how you decide to set up shop, making sure you get sound financial tips and keep track of your business banking will help ensure your business stays friendly in a business-friendly state.