Whether it’s because of low business funding and venture capital availability, limited local incentive programs, high tax rates and/or the high cost of living, the Garden State did not fare well in a new study that found that, while a record number of small businesses are opening, New Jersey is the No. 5 worst state in which to start one.
A record 10 million small businesses have opened in the last two years, with annual revenue reaching $13.3 trillion, according to the Small Business Administration. However, only 48.9% will survive five years, as owners battle inflation, recession fears and colossal shifts in how Americans work and live. In the rapidly changing landscape, some states have emerged as prime locations for entrepreneurs.
Using data from the Bureau of Labor Statistics, Census Bureau and SBA from 2016-2023, Lendio released its findings on the “Best States to Start a Small Business.”
The rankings were determined by analyzing myriad factors, including tax rates, startup survival rates, cost of living, educated worker migration, loans, funding, consumer spending and incentive programs.
Key findings in New Jersey show 49.1% of small businesses survive five years, there are 44 incentive programs, corporate tax rates are 11.5%, companies received $7.6 million in loans per 100,000 residents and 42,840 educated workers moved into the state.
The 10 best states to start a small business in 2023:
5. North Carolina
8. South Carolina
The 10 worst states to start a small business in 2023:
49. New Hampshire
47. New Jersey
46. Rhode Island
45. District of Columbia
44. New York
Complete state-by-state and national breakdowns are available here.