If You Could Start A Solution Provider Business Today ...

Top Criteria For Starting A New Solution Provider Business

We rarely get do-overs in life. But a CRN survey of 221 solution provider executives asked if they had the opportunity to start a new solution provider business today in any state within the U.S., which factors would influence their decision?

The results offer insights into the factors that solution provider owners and managers consider to be important to their success. The given percentage represents the number of solution providers that ranked the criteria first or second most important.

Growth Prospects

Eighteen percent of survey respondents said a state's growth prospects was their first or second consideration in choosing a state in which to launch a solution provider business.

In this year's "Best States In Which To Start A Solution Provider Business" analysis, California was ranked the No. 1 state for innovation and growth, based on its high scores for gross state product (2.0 percent growth in 2013) and entrepreneurial activity.

Competitive Saturation

Fourteen percent of survey respondents said the number of potential solution provider competitors was their first or second consideration in choosing a state in which to launch a solution provider business.

Virginia, the top ranked state in this year's "Best States" analysis, is already home to 46 solution providers from CRN's 2014 Solution Provider 500 list. Talk about competitive saturation. Perhaps the better prospects are states that ranked high in business potential, but have comparatively fewer solution providers, including Utah (just one solution provider on the CRN 2014 Solution Provider 500), Colorado (15) and Texas (22).

Availability Of Technical Professionals With Advanced Certifications

Fourteen percent of survey respondents said the number of technical professionals with advanced certifications available for potential hire was their first or second consideration in choosing a state in which to launch a solution provider business.

Massachusetts was ranked No. 1 in workforce education, according to the Information Technology and Innovation Foundation (ITIF), followed by Colorado, Maryland, Connecticut and Vermont.

Labor Costs

Eleven percent of survey respondents said the cost of labor was their first or second consideration in choosing a state in which to launch a solution provider business.

If low labor and employment costs are what you're looking for, Arkansas is the state to go to, according to the CRN analysis. Arkansas was followed by Louisiana, Oklahoma, Nebraska and Mississippi in having the lowest labor and employment expenses.

Number Of Small And Midsize Businesses

SMBs make up a big part of many solution providers' customer bases. So it's not surprising that 10 percent of survey respondents said the number of small, fast-growing companies was their first or second consideration in choosing a state in which to launch a solution provider business.

California has the largest number of SMBs, according to the CRN analysis, followed by New York, Florida, Texas and Illinois.

Tax Incentives

Ten percent of survey respondents said the availability of tax incentives was their first or second consideration in choosing a state in which to launch a solution provider business.

Most states offer tax incentives for businesses including job creation, research and development, and investment credits, according to the Tax Foundation. (Most of the few that don't have such incentives have no corporate income tax.)

Corporate Tax Rate

Nine percent of survey respondents said a state's corporate tax rate (or lack of a corporate income tax) was their first or second consideration in choosing a state in which to launch a solution provider business.

Some states, including Nevada, South Dakota and Wyoming, have no corporate income taxes. At the other end of the spectrum are such states as Illinois (9.5 percent corporate income tax rate), Minnesota (9.8 percent) and Pennsylvania (9.99 percent), according to the Tax Foundation (as of Jan. 1, 2014).

Broadband Access

Nine percent of survey respondents said access to broadband telecommunications services was their first or second consideration in choosing a state in which to launch a solution provider business.

Massachusetts has the greatest percentage of its population that has access to broadband telecommunications services, according to the ITIF. Massachusetts was followed by New Hampshire, Washington, Connecticut and Utah in resident broadband access.

Experienced Labor Force And Years in Information Technology

Nine percent of survey respondents said the experience level and years in information technology of a state's labor force was their first or second consideration in choosing a state in which to launch a solution provider business.

Massachusetts was ranked No. 1 by the ITIF for managerial, professional and technical jobs, followed by Maryland, Virginia, Connecticut and Washington.

Pick A State, Any State

Surveyed solution providers were asked in which state they would start a solution provider business if given the opportunity today?

14% Texas

13% California

9% Florida

4% Arizona

4% Tennessee