Starting a business is an exciting journey, but choosing the right location can make all the difference in the organization’s success. While some states have processes and qualities that make it easy to start a business, others may present more hurdles and challenges when founding a new company. That doesn’t mean businesses can’t operate there; it just means doing a bit more due diligence. You may even notice that some of these states are very popular and economically prosperous locations. Luckily, in addition to compiling the basics of starting an entity in all 50 states, we’ve highlighted the five states to which to pay particular attention.
California is one of the most dynamic business states but has significant advantages and challenges. It is the most populous state, ensuring a large and diverse consumer base. California also has major industries like technology (Silicon Valley), entertainment (Hollywood), agriculture, and tourism. Conversely, California has exceptionally high real estate, labor, and operational costs compared to other states. Stringent employment laws, environmental regulations, and zoning requirements add business compliance burdens.
Review all the basics when starting a business in California via our Startup Costs tool; a summary of basic business costs by entity for all states mentioned in this article can be found at the bottom.
New York is an international icon for people and businesses alike. It’s home to one of the world’s largest metropolitan areas, creating opportunities for diverse companies. Thriving industries include finance (Wall Street), technology (Silicon Alley), fashion (NYFW), and healthcare. However, NY has some of the highest taxes in the country. Similar to California, the real estate and labor costs in New York are significantly higher than in other states. For businesses that can overcome these challenges, the state offers a thriving environment for growth and innovation.
Review all the basics when starting a business in New York via our Startup Costs tool; a summary of basic business costs by entity for all states mentioned in this article can be found at the bottom.
Hawai’i’s natural beauty and laid-back lifestyle can appeal to business owners and employees alike, making it another popular choice for setting up a business. The state's thriving tourism industry provides opportunities, especially for companies catering to visitors, like hospitality, food services, and retail. However, its remote location and distance from the continental United States mean increased costs and access to a smaller consumer base (although not mentioned in the most challenging list, honorable mention Alaska will also face similar challenges).
Review all the basics when starting a business in Hawaii via our Startup Costs tool; a summary of basic business costs by entity for all states mentioned in this article can be found at the bottom.
Pennsylvania provides a balanced business environment with access to diverse industries and strategic location advantages. The state’s central location on the East Coast makes it ideal for businesses requiring easy access to major markets like New York City, Washington, D.C., and Philadelphia. Compared to neighboring states like New York and New Jersey, Pennsylvania also offers more affordable commercial and residential real estate options. However, it also comes with challenges like complex tax structures and complicated compliance requirements.
Review all the basics when starting a business in Pennsylvania via our Startup Costs tool; a summary of basic business costs by entity for all states mentioned in this article can be found at the bottom.
New Jersey’s proximity to other major metropolitan areas, skilled workforce, and robust infrastructure makes it an appealing place to start a business. Thriving sectors include pharmaceuticals, manufacturing, logistics, technology, and finance. Its connection to the Atlantic Ocean makes it home to Port Newark-Elizabeth, one of the busiest container ports in the U.S. However, high costs and a complex tax environment can pose challenges, especially for small and medium businesses.
Review all the basics when starting a business in New Jersey via our Startup Costs tool; a summary of basic business costs by entity for all states mentioned in this article can be found below.
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