In a recent study that offers a glimmer of hope for entrepreneurs, North Dakota has been identified as one of the most favorable states for small businesses in terms of survival rates. The study, conducted by business credit card group Capital on Tap, analyzed data from the U.S. Bureau of Labor Statistics spanning from 1994 to 2022. The findings reveal that small businesses in North Dakota have a robust chance of enduring the challenges that often lead to closures elsewhere.
According to the study, an impressive 79.55% of small businesses in North Dakota survive past their first year. Furthermore, 63.63% and 53.65% remain operational after three and five years, respectively. While these figures may not top the national charts, they are certainly among the best. For comparison, states like Washington and the District of Columbia report significantly lower survival rates, with only 75.12% and 76.04% of businesses making it past the first year.
Capital on Tap's Chief Legal, America, and Product Officer, Damian Brhchy, noted that despite the grim statistic that 20% of American small businesses fail within their first year, many states offer a strong environment for businesses to grow. "This research should serve as a positive sign to entrepreneurs in the top ten states who are thinking about starting a business," he said.
For those contemplating starting a business in North Dakota, the state not only offers a high rate of small business survival but also provides resources for entrepreneurs. Local news outlets like KX News have previously featured guides on starting your own small business, covering aspects from securing funding to choosing the right location.
The study serves as an encouraging indicator for the state's economic landscape, emphasizing that North Dakota's supportive environment is conducive to business longevity. As the number of small businesses in the U.S. continues to grow, contributing significantly to the economy, states like North Dakota are setting an example for fostering innovation and commercial drive.