If you’re currently IN business, the hunker-down, set-up-the-bunker mentality may make sense for the moment; but if you’re an entrepreneur contemplating the startup of a new business, you’ve got a big decision to make that you probably didn’t put high on your list, but you should have. And that question is, does it really make sense anymore to start your business in the place where you currently live? Are you giving your business the best possible chance for survival, not to mention success? This is important. It used to be that you could make a go of it almost anywhere they had  the type of workforce you needed. Today, you have to consider much more than that. You have to consider whether the state you start your business in is a business friendly state. 

 

CNBC recently came out with its study on the “Top States for Business 2010.” In ranking the states, it used the following criteria: 1) cost of doing business (taxes, gas, utility costs, wages, rents, workers compensation); 2) workforce (skill level and education of workers); 3) quality of life (crime rate, health care, air and water quality, and perceived livability; 4) economy (access to industry players and major corporations); 5) transportation and infrastructure (means to get your products to market and business travel); 6) technology and innovation (nurtures innovation); 7) education (K-12 test score, spending, number of universities); 8) access to capital (venture capital, angel networks); and 9) cost of living.

 

And the winner is (no surprise) the great state of Texas. It was a strange coincidence that on the day I'm writing this, I received an email from a former student who said he’s leaving California for Plano, Texas to take a great new position with a technology firm there. And he’s not the only one I know who has found opportunity in the Texas. Many are saying that Texas will lead the nation out of the recession. someone better.  But,  continuing with the CNBC  findings... Texas was followed by Virginia, Colorado, North Carolina, Massachusetts, Iowa and South Dakota. Those last two might surprise you, but I’ve spent a lot of time in those two states with my non-profit institute (www.n2tec.org) and they really haven’t participated in the recession the way everyone else has. They are also very business friendly; they will do everything they can to help you succeed.  California, on the other hand, where Peter and I live, came in at #32 on the list of best places for business, tied with Arkansas! (I bet Arnold loved that!) According to CNBC, we’re really great at innovation and access to capital, but when it comes to cost of business, business friendliness, and cost of living, we’re right there at the bottom of the list. 

 

Now if you don’t want to believe CNBC’s study, try the Small Business and Entrepreneurship Council, which has posted a map of the rankings of the states on Small Business Survival for 2009. Their study ranks South Dakota #1 followed by Nevada, Texas, Wyoming, and Washington. So, they have a little different point of view, but not when it comes to California, which they rank #49 (New Jersey is #50).

 

The bottom line is, contrary to popular opinion, the best places for entrepreneurs starting businesses are probably not in states like California or New York (#48) where their policies clearly favor the public sector (government) over the private sector, but in the states where they open their arms and invite you to get out of the recession and starting doing some real business for a change. You might want to think about it.