Nobody ever said starting a business was easy. Balancing the books, staying ahead of the competition, and keeping up with consumers are just three of many things any budding entrepreneur must master to survive those crucial early years.
But did you know just how much your location alone can affect your chances of start-up success?
Weighing up such factors as population, average cost of living, and business survival rates, we highlighted the 15 best cities to start a business in the UK in 2019 earlier this year, with Sheffield beating close competition from the likes of Nottingham and Sunderland to take the coveted top spot.
This time, we’ve gone global, using a series of metrics to find the best countries to start a business. Some of them, you never would have guessed.
Top 27 countries in the world to start a business
The United States is officially the world’s best place to start a business. Surprise entry Belgium lands in second place thanks in part to its excellent 64.41% business survival rate and relatively low cost of living, but it was still no match for the USA. America’s mix of healthy employment rates, excellent average annual salary, and high business survival rate helped keep it head and shoulders above the competition.
The United Kingdom barely makes the top 15, landing at an unlucky 13 despite a respectable employment rate of 74.51% and a five-year enterprise survival rate of 43.64%.
The UK has a long way to go if it’s to outdo Ireland when it comes to surviving those crucial first five years of trading. Ireland takes third place with an impressive company survival rate of 80.48%, proving the luck of the Irish is anything but a myth.
Starting a business in the US: All 50 states ranked
As a result of America’s impressive performance, we decided to dig deeper to discover which of the 50 states offers budding entrepreneurs the best chance of business success. Once again, poring over data for population, average income, average personal expenditure, and five-year business survival rate, we ranked each state based on a score out of 10.
The United States of start-ups: The top 3
The top US states for business start-up success may not be a surprise to many, but each state within the top three has more than earned its ranking.
3. New York
Home to arguably the world’s most iconic city, the state of New York needs little introduction. But the home of Wall Street and the two largest stock exchanges on the planet has so much more than finance up its perfectly tailored sleeve. With enormous companies such as NBCUniversal, Pfizer, JPMorgan Chase all located in the Big Apple, and not to mention a tourist industry worth in excess of $100bn per annum, the city of New York seemingly has the Midas touch.
Texas may well be a state built on oil and agriculture, but its chameleon-like quality has enabled it to remain ahead of the game and diversify into many other industries too. Other such areas that tomorrow’s entrepreneurs may want to consider cracking in Texas include aerospace, computing, and biomedical sciences.
Boasting a huge population of 39.5m, high rates of employment, and a 52.8% chance of business survival, it’s no wonder so many go to Silicon Valley and wider California seeking the all-American dream. And, while there are no guarantees your start-up idea is going to reach the heights of Apple, you may as well give it a go. Failure isn’t frowned upon in California among its the ambitious business community.
Minnesota: Highest five-year enterprise survival rate
Notable entries include Minnesota, which ranks at 11 thanks in part to its exceptional enterprise survival rate of 54.4% after five years, the highest of all the US states. The upper Midwest state was once best known for its agriculture and natural resource extraction but has retained a healthy economy thanks to its ability to diversify and excel in areas such as the financial services sector.
Connecticut: Highest personal income per capita
Another state with a strong grip on finance is Connecticut. The New England region has long been an over-achiever when it comes to both hedge funds and insurance, which may have helped them land at seven on our chart. Connecticut boasts the highest per capita personal income on the list with $71,823. That’s $4,000 more than nearby rival Massachusetts, which steps into number four.
Payment technology is key
When devising that all-important five-year business plan, paying close attention to the demographics of a location can be key to success, whether offering a local service or a global online store. Whatever industry a firm is in, using a payment system that runs without a hitch is essential.
Our card machines and card readers are fast and easy to set up and designed to make taking card and contactless payments a breeze. For those doing business online, the Paymentsense payment gateway system makes it easy for customers to pay for goods and services online or by phone.
The methodology behind our stats
Our list of best places for business start-ups was compiled by analysing the economic climates of the world’s most populated countries and US states. This included the population of each country, the employment rate, average annual salary, average cost of living, and five-year enterprise survival rate.
The employment rate and the population has been used together to calculate an estimated number of adults employed. The Employment Score is a score between 0 and 1, where a country with a score of 1 has the highest number of adults estimated to be employed.
The ratio between the cost of living and the yearly pay is calculated by country. Each country has a normalised score between 0 and 1, based on the ratio score. A country with the highest score of 1 would have the highest ratio between the cost of living and the average wage, indicating a worker can spend a smaller proportion of their income on living.
A score is calculated based on the normalised survival rate where the country with the highest survival rate of the list has a score of 1, and 0 for the lowest.
Each of the scores is added up to make an overall index score.
For the USA, New Zealand, and Canada, the following additional sources were used:
USA: Bureau of Labor Statistics (BLS), accessed 14th March 2019
New Zealand: Stats New Zealand, accessed 14th March 2019
Canada: Government of Canada, accessed 14th March 2019