Starting a new business is risky. About 20% of new businesses last only two years. Companies with fewer than 100 workers employ a third of the U.S. workforce, according to the Census Bureau.
Of course, many entrepreneurs believe that they can create companies like those which have been the most successful in the past several decades. Google was started in 1998. Tesla was founded in 2003. Facebook launched in 2004. The founders of each of these companies are now billionaires and have made some of their employees millions of dollars.
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CardConnnect set out to determine the states where entrepreneurs are most likely to start businesses. The methodology for its “The Entrepreneur Capital of the USA” study includes the use of Census Bureau data and Google Trends.
The researchers found that the best metric was new business applications per person in each state. The period measured was between September 2020 and August 2021.
The methodology leaves out a number of factors typically used in similar studies. It does not take into account tax breaks for start-ups, quality of the workforce (which usually includes education), the quality of life for workers and whether a business is near a large population area. Perhaps the most critical data left out are those on business regulations.
The study does show how large the number of people who want to start a new business is. The authors pointed out:
[A]ccording to a study conducted by FreshBooks in 2019, a staggering 24 million Americans wanted to leave their jobs and work for themselves by 2021. That’s more than the entire population of Florida.
Wyoming is at the top of the list because about one in 20 people made a new business application over the measured period. There is no concentration of states by this category. Wyoming was followed by Delaware and Georgia.
These are the 20 most entrepreneurial states:
- Wyoming (1 in 20)
- Delaware (1 in 25)
- Georgia (1 in 30)
- Florida (1 in 35)
- District of Columbia (1 in 40)
- Mississippi (1 in 45)
- Nevada (1 in 45)
- Louisiana (1 in 45)
- Utah (1 in 50)
- Maryland (1 in 50)
- Colorado (1 in 50)
- South Carolina (1 in 55)
- New Jersey (1 in 55)
- Montana (1 in 60)
- Texas (1 in 60)
- North Carolina (1 in 60)
- Illinois (1 in 65)
- New York (1 in 65)
- Alabama (1 in 65)
- Michigan (1 in 66)
Click here to read see which is the best state to start a business.
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