Michigan ranked as the 18th best state to start a business in the U.S., according to consumer finance website Wallethub, which on Monday released its "2019's Best & Worst States to Start a Business."
"Michigan's five-year business survival rate is just over 50 percent, placing the state among the top 20," WalletHub analyst Jill Gonzalez told The Center Square. "The business environment is very competitive across the country, and it's difficult for startups to grow and develop. Authorities in Michigan could lower corporate taxes, and introduce incentives for those who are looking to start a business in the state to increase business friendliness."
Wallethub focused on 26 metrics regarding business environment (where Michigan ranked 31st), access to resources (23rd), and business costs (6th) to find the best and worst states to start a business.
"There are many factors contributing to a healthy and strong business environment," Gonzalez said. "Michigan could climb this ranking if it had more growth in the number of small businesses, more startups per capita, and higher employment specialization. Another area where the state is lacking is growth in its working age population."
U.S. Bureau of Labor Statistics data states about a fifth of all startups typically don't survive past year one of operation, and nearly half never make it to their fifth anniversary.
Gonzalez said Michigan beat out it's neighbors, but that there's still room for improvement.
"Overall, Michigan tops its neighbors. However, there are categories where the neighboring states fare better," she said. "These include the average length of work week, the five year business survival rate, industry variety and cluster strength, financing accessibility, working age population growth, and office space affordability."
Michigan tied with West Virginia in the highest total spending incentives as a percentage of Gross Domestic Product.
The Wolverine State tied 44th with Vermont for the shortest average workweek.
Wallethub ranked Texas first, followed by Utah in second and Georgia in third. North Dakota and Oklahoma round out the top 5.
Rhode Island finished last in 50th.