Florida's business environment, access to resources and business costs landed it at No. 4 in a ranking of best states for starting a business.
About 20% of all startups typically don’t survive past the first year, and nearly 50% never make it five years, according to the WalletHub study, referencing the U.S. Bureau of Labor Statistics.
“That’s without considering the economic damage done by the Covid-19 pandemic, which resulted in 200,000 more permanent business closures than usual within a year of the pandemic’s start,” the study said.
Outside of the pandemic, the most common reason that startups fail is “bad location.” This means choosing the right state to start a business is crucial, according to the study.
Florida ranked behind only Texas, Georgia and California in the study, with Idaho coming in fifth to round out the top five.
WalletHub determined the ranking by comparing the 50 states across three metrics: business environment, access to resources and business costs.
Florida’s best category was business environment, where it ranked No. 5 in the country. WalletHub evaluated this category using weighted metrics, like average length of work week, startups per capita, industry variety, and five-year business survival rate.
The state ranked No. 15 in access to resources and No. 22 in business costs, for an overall fourth-place finish.
It also had the fourth-highest average growth in the number of small businesses, behind Idaho, Utah and Nevada.
“A state that provides the ideal conditions for business creation – access to cash, skilled workers and affordable office space, for instance – can help new ventures not only take off but also thrive,” the study said.
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