Location, location, location – you know the old adage. And in small business it warrants your consideration.
I blog regularly about small business best practices such as regulatory compliance, employment law, taxation, and to how to grow your business. But it’s worth stepping back and taking a look at a business fundamental that is often overlooked – geography.
Whether you are looking to relocate your small business, expand operations into a new state, or are hoping to realize your entrepreneurship dream and start-up in a new town, be sure to do your research. Every state has different rules (taxes, employee benefits, etc). Determining which state to establish your small business in is a big, and sometimes complicated, decision to make.
Here are a few resources you can reference to help guide your decision.
State-by-State Small Business Guide
For a state-by-state guide into starting and operating a business, bookmark this handy portal on Business.gov. It links you to small business information by state, such as resources available that support small business in that state, FAQs, “how-to” guides, and more.
Alternatively, you can use Business.gov’s search tool, which improves on other search engines by allowing you to search by very specific criteria directly aligned with doing business in a specific geographic area. Try it out at www.business.gov (above the top navigation bar) and type in “business license, YOUR CITY, USA” and see what comes up.
Independent State Ranking Reports
You often hear about great cities to live in, raise kids in, or retire to. But there are also a variety of statistics published annually about the best states for small businesses to thrive in.
The Small Business & Entrepreneurship Council (SBEC) recently released its 2008 Small Business Survival rankings based on a variety of factors including taxes, regulatory costs, health care, and energy costs, among others. You can read more about how the states ranked here.
U.S.News.com has a slightly different take on the state rankings and combines the SBEC report with the 2008 New State Economy Index, by the Kauffman Foundation and the Information Technology and Innovation Foundation. You can read more about U.S.News.com’s “7 Best States to Start a Business” here.
Deciding Which State to Incorporate In
If you’re still on the fence about whether or not to incorporate your business, you can read more about the pros and cons of small business incorporation in my post – Should I Incorporate My Small Business?
If you do choose to go down the path of incorporating, be aware: a common misconception is that businesses must incorporate in their state of operation. You can, in fact, incorporate in any one of the 50 states and the District of Columbia regardless of where your business currently operates – although it can get complicated.
Typically, if you only operate in one state, you should incorporate in that state. If you operate in multiple states, you should determine which state is the friendliest to corporations and incorporate in that state.