A recent study by Lendio, a company specializing in small business loans, has ranked Ohio as the sixth best state in the United States to launch a small business in 2024. This positioning marks a slight decline from Ohio’s third-place ranking in 2023, but still solidifies its status as a top destination for entrepreneurs.
The research conducted by Lendio evaluated ten crucial metrics that contribute to the success of small business owners. These factors included the availability of small business lending, overall cost of living, real estate data, migration patterns of educated workers, corporate tax rates, and state-level incentives for business proprietors.
Ohio’s favorable standing in the rankings can be attributed to several key factors. The state boasts a low tax environment, despite having a gross receipt tax. Notably, Ohio does not impose a corporate income tax, making it an attractive option for businesses. The study also highlighted Ohio’s strong performance in small business loan approvals per capita, affordable housing costs, and robust local incentive programs designed to support businesses.
Lendio’s assessment characterizes Ohio as “a good place for small businesses to settle,” underscoring its appeal to entrepreneurs and small business owners.
In the national rankings, Ohio secured its position behind South Carolina but ahead of Georgia. The top five states for starting a small business, according to the study, are Florida, Texas, North Carolina, Colorado, and South Carolina, with Ohio following closely in sixth place.
The complete top ten list for 2024 reveals some changes from the previous year’s rankings. Florida has climbed from second to first place, while Texas, previously at the top, now occupies the second spot. North Carolina has moved up to third from fifth, and Colorado has advanced to fourth from sixth. South Carolina has made significant progress, jumping from eighth to fifth place.
Following Ohio at sixth are Georgia, Massachusetts, Utah, and Oklahoma, rounding out the top ten. It’s worth noting that
Massachusetts has slipped from fourth to eighth place, while Oklahoma has dropped from seventh to tenth.
To ensure the accuracy and comprehensiveness of their study, Lendio utilized data from various federal government agencies and nonprofit organizations. Their methodology incorporated information from the National Science Foundation, Bureau of Labor Statistics, Small Business Administration, Council for Community and Economic Research, Tax Foundation, Census Bureau, National Association of Realtors, and Bureau of Economic Analysis.
The metrics analyzed in the study covered a wide range of factors critical to small business success. These included venture capital distribution, five-year startup survival rates, small business loan data, financing offers through Lendio’s marketplace, state-level business incentives, corporate income tax rates, educated worker mobility, relocation trends, personal consumption expenditures, and median housing values.
This comprehensive approach to data collection and analysis provides a well-rounded view of the small business landscape across different states, offering valuable insights for entrepreneurs considering where to establish their ventures.
Ohio’s strong showing in this study reinforces its reputation as a business-friendly state with a supportive ecosystem for small enterprises. The combination of favorable tax policies, accessible financing options, affordable living costs, and supportive local initiatives creates an environment where small businesses can thrive and grow.
As the landscape for small businesses continues to evolve, studies like this one from Lendio offer crucial guidance to entrepreneurs and policymakers alike. They highlight the strengths of different states and provide a roadmap for areas of potential improvement, fostering a competitive and dynamic small business sector across the nation.