During the pandemic, the eCommerce retail market more than doubled in the US. The market continues to grow and attract entrepreneurs and small business owners worldwide. With improved access to digital business tools and virtual workplaces, anyone can quickly launch successful eCommerce operations. Though there is ample opportunity within this market, business owners must remember that their physical location impacts their success too. Each US state has its own tax policy, infrastructure, funding, and growth opportunities that entrepreneurs can take advantage of. A recent study by Nexcess analyzed the states most beneficial for eCommerce businesses; here’s why Florida was ranked number one.
- Corporate Tax Ranks
- Individual Tax Ranks
- Sales Tax Rank
- Unemployment Insurance Rank
Florida ranked a perfect 10/10 for its tax climate score. Florida no longer has an individual income tax and was ranked second-best in unemployment insurance tax rates. The Tax Climate Index was used to determine this score. The Tax Climate Index allowed entrepreneurs to quickly compare key tax rates across all states to determine which location is most beneficial for them. A more generous tax rate can mean more revenue to reinvest in your company and a more significant opportunity to scale. States with beneficial tax systems may also show higher levels of economic growth and job creation.
- Job Growth
- Five-year New Business Survival Rate
- Small Business Policy Index (SBPI) Rank
The economic outlook score is essential for gauging the entrepreneurial climate and opportunity for growth within a state. Nexcess reports, Florida “scored the third-lowest on the Small Business Policy Index (SBPI)- the lower the index number, the lighter the governmental burdens, and the better the environment for entrepreneurship- out of all 50 states in 209, just behind Texas and Nevada.” The SBPI considers the policy climate features that drive economic growth, such as taxes, regulations, government spending, debts, and the effectiveness of plans for future initiatives.
- Internet Access
- Power Grid Reliability
- Road Quality
- Bridge Quality
Florida continued to rank highly for its infrastructure. The infrastructure of a state is essential for operating a successful eCommerce company. The quality of bridges and roads can impact shipping and ordering, while access to high-speed internet is always necessary for keeping your store open. Florida ranked in the top twenty for internet accessibility and the top six for power grid reliability and bridge quality. Florida has many cities that are hubs for commerce and business and ports and other destinations for processing and shipping products to the rest of the country. The physical infrastructure of a state can offer insight into the challenges of operating an eCommerce business out of that location.
- Venture Capital Ranks
- SBA Loan Availability
The opportunities for small business funding in any given state are essential for successfully launching any startup. Florida ranked in the top fifteen states for SBA loan availability and venture capital financing. This metric offers entrepreneurs insight into the opportunities for funding and growth within a state. The better opportunities for venture capital, the greater the diversity of new businesses and employment opportunities within a state.
There is a ton of market potential for anyone considering opening an eCommerce store. Before launching your company, however, consider the state policy factors that will impact your business’s scalability, profitability, and operations. Entrepreneurs searching for an innovative community and lucrative resources should consider launching their eCommerce businesses in the Sunshine State.