Last updated on June 15, 2022
A small business is an establishment that usually has less than 500 employees. According to the Small Business Association’s (SBA) most recent statistics, there are approximately 32.5 million small businesses in the US. These small businesses account for 99.9% of all business in the US.
Challenges New Companies Might Face
Unfortunately, the Covid-19 pandemic has hit the small business industry hard and the latest research shows that nearly a third of all small businesses are currently not operational. Nearly 50% of all businesses fail within the first five years (Bureau of Labor Statistics, 2021), so starting a business will take a lot of planning.
Many factors such as insurance costs, tax climate and potential economic growth, to name but a few, have to be taken into consideration.
Insurance Requirements
All businesses, regardless of the type will face a certain amount of risk and a moving company insurance is the best way to prepare for those risks ahead. General liability insurance can protect your company from the financial pitfalls of not being insured.
It is not a legal requirement to have general liability insurance, but it does protect a business in cases of:
- Bodily Injury
- Property damage
- Medical costs
- Legal fees
- Advertising or personal injury
The cost of insurance will depend on the type of policy and the amount of coverage required. A business owner’s policy (BOP) may be more cost-effective than a stand-alone policy and is a more comprehensive insurance solution for businesses.
Other forms of insurance that might be required are:
- Auto Insurance – A moving company needs trucks and by law each of these vehicles will need to have commercial auto insurance.
- Commercial Property Insurance – The company might have an office or warehouse and this type of insurance will cover the buildings/property in cases of damage.
- Workers Compensation Insurance – A new business will have employees and with a moving company comes the risk of injury when carrying heavy loads. Workers Compensation Insurance will cover medical costs and wages for workers injured on the job.
A Friendly Tax Climate and Economic Growth
The states listed below are great options for starting a new moving business.
1. Montana
Labor costs are fairly reasonable with an average yearly income of $57,153.
There is currently no state sale tax and Montana has a corporate tax rate of 6.65% which could be better. However, trends show that consumer spending is on the rise with just over a 9% increase in spending from 2017 to 2019 and still going upward.
2. South Dakota
South Dakota is one of the most tax friendly states for new businesses with no corporate or individual tax.
Affordable labor should be easy to come by and more than half of businesses that started in 2015 are still around.
Consumer spending has increased by almost 4% since 2018, but it remains low.
3. Florida
In any given month around 0.42% of non-business owner adults start their own business, but unfortunately only around 49.5% of those businesses will survive beyond five years.
The state remains a popular choice for entrepreneurs due to its attractive tax climate. The Tax Institute rates Florida at #1 for individual income tax as no personal tax is assessed and it ranks at #4 for corporate tax with a tax rate of 4.5%.
The average annual income is just under $60,000 which makes it a good environment to find affordable labor.
4. Texas
Texan entrepreneurs are starting around 410 new businesses daily. The good news is that more than half of those businesses survive beyond the first five years, making Texas one of the preferred states for entrepreneurs.
Although the state does not have any corporate or individual income tax, sales tax is quite high at 8.19%. Consumer spending is on the rise, however it is still slower than some other states on the list.
5. Idaho
If you don’t mind cold winters, Idaho might be the ideal state to start a business. It has a decent entrepreneurial rate of 0.38%, with just over 50% survival rate for businesses in the first five years.
The tax climate is not as friendly as some of the other states topping out at 6.93% for corporate and individual income tax.
Personal spending is fairly average with just over 4% increase from 2018 to 2019.
The Verdict
The above states are not the only places where a new business can succeed and thrive, but they do offer a great chance of success. Starting a new moving company can be exciting and rewarding provided the risks are mitigated and the planning is thorough. Also check the New York International Movers
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