Launching a new business is becoming more popular than ever before. In 2021, a surge of people quitting their jobs was dubbed “The Great Resignation.” In August alone, 4.3 million Americans quit their jobs — that’s almost 3% of the entire workforce. Many experts believe that entrepreneurship is a major driving force behind this employment trend. After all, working for yourself gives you greater flexibility in work hours, which has certainly become more important as Americans juggle ever-changing schedules for in-person work for themselves and schooling for their children.
We looked at the 50 most-populated American cities to find out which areas are the most entrepreneur-friendly, whether you’re a solopreneur starting a side hustle or a start-up founder hoping to become the next big thing. Our research focused on four data points in two areas: small business funding and taxes.
- Venture capital funding: Some areas definitely see more venture capital investment than others.
- SBA 7(a) loan funding (by congressional district): SBA funds are originated by private lenders; this data shows which cities are approving the most loans.
- State income tax rate: The less you pay in taxes, the better chance you have of succeeding in your business. We ranked states by the highest bracket’s tax rate.
- Corporate income tax rate: Corporate taxes also eat away from your business’s cash flow. Again, we pulled the highest tax rate in each state. It should be noted that a few states charge tax on gross receipts rather than net income (after deductions) and at a much lower rate. Many tax experts state that this causes a higher burden on businesses. But for a new entrepreneur with minimal start-up costs, this could still be more beneficial, and so we’ve weighted this data for all states equally.
Find out which states offer the friendliest conditions for becoming an entrepreneur, both in terms of finding funding and minimizing your tax burden.