Starting a new business abroad? Best U.S. states for greater success revealed

As 61% of Brits express a strong interest in owning their own business under ideal conditions, the U.S. stands out as an enticing option for launching a new venture. More than 20,000 Britons relocate to America annually, drawn by the country’s dynamic and supportive entrepreneurial landscape, underscored by a recent record of 19 million new business applications.1,2,3

With this in mind, back office admin experts Vera have identified which U.S. territories have the highest and lowest business survival rates, as well as sharing expert advice on how businesses can increase their chances of success.

Key findings:

• New Jersey, New York, and Pennsylvania have the highest first-year survival rate for new businesses at 78.60%, and are the only states to see an increase over the past decade

• The Pacific division (Alaska, California, Hawaii, Oregon and Washington) saw the largest drop in survival rates from 2012-2022 at 4.80%

• The East South Central division experienced the smallest decrease in survival rates the past years at just 0.40%

• New businesses in the Mountain division face the lowest first-year survival chances at 74.40%

The results: One-year survival rates for new businesses by U.S. territory

*The above table is ranked by “Change (%)”. 

**The full data set containing survival percentages for every year can be found here.

The Middle Atlantic region offers the best one-year business survival rates

The Middle Atlantic division, comprising New Jersey, New York, and Pennsylvania, has the highest new business survival rate among U.S. territories. In 2022, businesses in this region had a one year survival rate of 78.60%, a slight increase from 77.9% in 2012 This is the only region in the country to experience an increase over the past decade, reflecting a 0.7% gain. This stability highlights a resilient business environment bolstered by a diversified economy, robust infrastructure, and substantial financial and human resources, all of which support new ventures through their critical first year.

In contrast, the East South Central division, which includes Alabama, Kentucky, Mississippi, and Tennessee, ranks second having experienced a slight decrease of 0.4% over the past decade. In 2022, new businesses in this region had a one-year survival rate of 77.6%, down from 78% in 2012.

Meanwhile, the South Atlantic division—comprising Delaware, Florida, Georgia, Virginia and other neighboring states— ranks third, experiencing a more significant decline in business survival rates. In 2022, the survival rate stood at 76.1%, representing a 1.4% drop from 77.5% in 2012. Despite this past decade decrease, the region remains competitive due to its strong population growth, business-friendly policies, and diverse industries.4

The West South Central division, encompassing Arkansas, Louisiana, Oklahoma, and Texas, ranks fourth in new business survival rates, with a one year survival rate of 77.80% for businesses established in 2022. Despite a 2% decline since 2012, the region’s vibrant energy sector, significant agricultural output, and expanding technology industries contribute to a favorable environment for new businesses to thrive.

The Pacific division had the largest drop in first-year survival rate 

At the bottom of the list, the Pacific division — which includes California, Oregon, and Washington — experienced the largest decline in new business survival rates over the past decade. By 2022, the region's one-year survival rate had fallen to 77.1%, a significant 4.8% decrease from 81.9% in 2012. The high cost of living, increasing competition, and stringent regulatory burdens have contributed to the difficulties businesses face in these states.5

Similarly, the Mountain division (Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming) also faced a notable decline, with new businesses seeing a one-year survival rate of just 74.4% in 2022, down from 77.9% in 2012—a drop of 3.5%.The Mountain division's decline may be attributed to economic volatility, lower population density, and less access to capital and resources6, making it harder for new businesses to sustain their first year.

Tips on how to increase your business's first-year survival chances

Regardless of the regional challenges different states may experience, back office admin experts, Vera, recommend the following strategies to enhance your business’ chances of first-year survival and success:

1. Develop a business plan: Create a comprehensive plan with clear objectives, market analysis, financial projections, and strategies to address challenges. Regular updates will help you stay adaptable and focused on both market trends and customer needs.

2. Secure funding and manage finances: Ensure you have enough capital for start-up costs and unexpected expenses. Explore funding options and maintain a financial cushion to navigate early challenges. Invest in tools to manage finances efficiently and stay proactive with regulatory compliance, including taxes, permits, and insurance.

3. Adapt to market changes: Stay flexible and ready to adjust your business model based on market or economic shifts. Adaptability can help you seize new opportunities and overcome challenges.

4. Build a strong network and seek expert advice: Network with industry experts and mentors for valuable insights and support. Use tools like Vera to connect with advisors, manage tasks, and access current information.

5. Innovate with AI for back-office support: AI services, like Vera, can speed up admin time wastage, and help small business owners to efficiently handle regulatory requirements, manage renewals, and ensure compliance. This helps avoid missed deadlines and reduces administrative burdens.-

Article prepared by https://www.hirevera.com/

[1] - SME Magazine | 61% of Brits aspire to be their own boss

[2] - The Telegraph | Moving to the USA from the UK

[3] - SBA | Small Dollar Lending and Lending to Underserved Entrepreneurs Continues to Rise as a Record 19 Million New Business Applications Filed Under Biden-Harris Administration

[4] - Economic Innovation Group | Economic prosperity is shifting toward the Mountain West and Southeast

[5] - U.S. News | Why Is California So Expensive?

[6] -  S&P Global | ESG U.S. Public Finance Report Card: Mountain States

[7] - U.S. Bureau of Labor Statistics | 1-year survival rates for new business establishments by year and location

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