---
title: "Study Compares Most and Least Expensive States to Open a Business"
url: https://burnaze.com/article/bc9fc4fd-9c35-4258-96dc-0b5027cbba3a
source: "Franchising.com"
original_url: https://www.franchising.com/articles/study_compares_most_and_least_expensive_states_to_open_a_business.html
author: "Kerry Pipes"
category: "Real Estate"
topics: ["Development & multi-unit"]
published: 2023-04-11T09:00:00.000Z
modified: 2026-10-31T20:34:54.924Z
image: https://imgs.franchising.com/art/articles/7539_plate.jpg
---

# Study Compares Most and Least Expensive States to Open a Business

**TL;DR:** A study by Simplify LLC identified the most and least expensive states to start a business, with Nevada being the least expensive and Minnesota being the most expensive. The study analyzed factors such as labor costs, corporate tax rates, and commercial real estate availability.

*By Kerry Pipes, originally published in Franchising.com on 2023-04-11. [Read the original](https://www.franchising.com/articles/study_compares_most_and_least_expensive_states_to_open_a_business.html).*

## Story

About one in five businesses fails in the first two years, according to the U.S. Bureau of Labor Statistics.

Geography certainly plays a role in that, since some states make it more affordable to set up shop than others. Entrepreneurs looking to grow need to know the costs of doing business in other states. So a new study from Simplify LLC has identified the Most and Least Expensive States to Start a Business drawing on recent data from Bureau of Labor Statistics, Small Business Administration, and Census Bureau.

Researchers analyzed the cost of labor, corporate tax rates, available commercial real estate, commercial electric bills, and the health of the business environment in all 50 states and D.C. Culled from their research, here are the most expensive and least expensive places to operate a business: **-5 Least Expensive States to Operate a Business:** Nevada, Colorado, Arkansas, Montana, and North Carolina.

**-5 Most Expensive States to Operate a Business:** Minnesota, New York, Louisiana, Alabama, and Alaska. **-Nevada is the Least Expensive State to Operate a Business:** Business owners pay workers $51,885 on average annually, pay 0% corporate tax rate, and the average monthly commercial electric bill of $463.41.

**-Minnesota is the Most Expensive to Operate a Business:** Business owners pay workers $60,958 on average annually, pay 9.8% corporate tax rate, and pay an average monthly commercial electric bill of $673.61.

## Entities

- Franchising.com (publication)
- General (sector)
- new york (location)
- north carolina (location)
- Kerry Pipes (person)
- Colorado (location)
- Alabama (location)
- Nevada (location)
- louisiana (location)
- Minnesota (location)
- Arkansas (location)
- labor costs (topic)

---
Originally reported by Kerry Pipes, Franchising.com (https://www.franchising.com/articles/study_compares_most_and_least_expensive_states_to_open_a_business.html). Summarized by Burnaze (https://burnaze.com/article/bc9fc4fd-9c35-4258-96dc-0b5027cbba3a).