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The website wallethub.com just published its list of the top 10 states for launching a startup. California makes the list coming in at number eight, and Texas was number one. See here. California would have ranked higher, but California came in 47th out of 50 in the category of “business costs,” which is not surprising to those of us living in California.
If you are thinking of launching a startup here in San Diego, call San Diego Corporate Law. We can help set up your corporation or limited liability company, review your business contracts, commercial leases, and provide all the legal services needed to help your new business succeed. Every business needs an excellent and trusted corporate attorney.
Here is a quick rundown of the wallethub.com methodology and findings. The website identifies 25 factors that they judge to be important to the financial success of a startup business. Being aware of these factors can be helpful in considering tactics and strategies for business success. Information is power, as the saying goes.
San Diego Corporate Law: 25 Keys to Success
In conducting their survey, wallethub.com identified 25 keys to the financial success of startup businesses. Wallethub.com then grouped these factors/metrics into three broad categories. The first is the state’s “business environment” ranking which includes these types of metrics:
- Percentage of “engaged workers” — workers who report that they are involved in, enthusiastic about, and committed to their work and workplace
- Growth in number of small businesses
- Number of startups per capita
- Growth of business revenues
- Five-year business survival rate
- Industry variety
- Industry-cluster strength — despite the idea that businesses are in fierce competition, businesses and industries that are “clustered” geographically are shown to be more successful; this concept has long been known in retail, for example
- Job growth
- And more
A better term here might be “business ecology.” These metrics address the question of whether the state or region of the country provides a fertile and nutrient-rich grounding for startups. If startups are succeeding generally, then that increases the chances of your startup succeeding.
The second broad category is what wallethub.com calls “access to resources.” This category includes:
- Financing density — total annual value of small-business loans divided by the total number of small businesses
- Venture investment amount per capita
- Labor availability/unemployment Rate
- Educated worker scale/percentage of college-educated population
The final category is “business costs.” This is a business version of a “cost-of-living” analysis that takes into account factors including commercial office and leasing space availability, costs per square footage, taxes, permit and licensing costs, wage and benefit costs, insurance prices, etc. This is where California did poorly based on Wallethub.com’s analysis.
Contact San Diego Corporate Law
The foregoing highlights the importance of well-thought-out business plans and strategies and the importance of having a good corporate attorney. For more information, contact attorney Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard provides a full panoply of legal services for San Diego and California businesses. Mr. Leonard has been named a “Rising Star” three years running by SuperLawyers.com and “Best of the Bar” by the San Diego Business Journal. Mr. Leonard can be reached at (858) 483-9200 or via email.