Starting a business is never easy, according officials at the U.S. Bureau of Labor Statistics. Close to a fifth of all startups don’t survive more than one year of operation, and nearly half never make it to their fifth anniversary. But Utah’s economic climate is better than most states in the U.S.
Utah ranks number two in the nation for best states to start a business according to WalletHub, a personal finance website. Jill Gonzalez, an analyst at WalletHub said three main categories put Utah close to the top of the list.
“The first was the business environment,” Gozalez said. “What does start up activity look like? How are other businesses doing there? What is the five-year survival rate?”
The second was access to resources like financing and mentorships.
“And finally we looked at business costs,” Gonzalez said. “What do state and local tax rates look like? What are labor costs? How affordable is office space?”
Gonzalez said states like Washington and California are getting too competitive and startups don’t last.
“A lot of people have been looking at Utah as kind of the new frontier in terms of tech startups, in terms of getting out there and using resources that migrated from farther west,” Gonzalez said. “A place like Utah sees about 70 times more accessible financing than say California, Oregon and Arizona – nearby places that can’t even compete with that. I think that really sets Utah apart.”
Access to resources has allowed Utah to see its second highest growth in its number of small businesses. Gonzalez said that’s just in the past year.
Nathan Ruben invented baby monitor technology and started his own company called Phtorithm. He said Utah-based resources like the Small Business Development Center and USTAR were important to his startup business.
“It takes significant resources to get from proof of concept to a technology readiness level that’s acceptable by the market,” Ruben said. “That’s what USTAR did for us. They’ve been a tremendous help and a great resource ever since. They invited me to conferences, they have workshops every month.”
Ruban said mentors in Utah were also readily available.
“If I didn’t find some mentors like I did in Provo, this ship would have been sunk a long time ago,” Ruben said.
Areas like Utah County are almost a little too full of startup businesses according to Ruban, but he said the entrepreneur spirit in Utah is fun to work with.