New study: Missouri thrives in nurturing startups
Missouri has the second-best survival rate for startups in the entire country! This announcement was just made based on a study conducted in August 2017 by GO Banking Rates. When you consider that according to Forbes, 90 percent of all startups fail and that Missouri startups tend to succeed, that begs the question: Why are Missouri startups surviving at much greater rates than the rest of the country? There are multiple reasons for this.
Missouri has the seventh-lowest cost of living in the country. That’s extremely helpful when you’re looking at overall expenses for operating a business, purchasing real estate, etc. When overhead is lower, cash flow is better.
Missouri is also ahead of the curve when it comes to entrepreneurial support. The state offers an innovation fund to support entrepreneurship efforts. In addition, according to PitchBook data, Missouri has more business incubators in its metro areas than all other Midwest states except Illinois. Incubators increase the success rate of businesses because they generally offer reduced rent; shared employees; shared space and/or equipment; access to research through universities; and easy access to support such as mentors, advisers and established business networks.
The Small Business Development Centers (SBDCs) are an essential piece of the puzzle when it comes to startups surviving. While there are SBDCs throughout the entire U.S. and its territories, the Missouri SBDC has a special designation as an SBTDC, where the T stands for technology. This is a unique certification that only a handful of SBDCs have achieved. It means that our SBTDC offers not only essential assistance with business
plans, financial analysis, finding financing, market research and more but also specific technology development and commercialization assistance by helping with intellectual property, proposal preparation, applications for research grant funds, introductions to investors and evaluation of the commercial feasibility of a new technology. The more services entrepreneurs can receive, the better prepared they are to succeed.
On March 24, 2017, U.S. senators Jim Risch and Jeanne Shaheen stated before the Senate: “SBDCs are successful because they provide the services of a large consulting firm on a locally scaled level in areas that may go unnoticed by other programs. They provide tailored, individualized attention to over 450,000 entrepreneurs a year, which resulted in $6.9 billion in new sales in 2015 … aided in the creation of over 100,000 jobs, and the small businesses they serve averaged a growth rate … nearly eight times the national average.” Missouri’s SBTDC consistently meets its national goals set by the United States Small Business Administration. With that kind of support, it’s no wonder Missouri startups are succeeding.
Ultimately, Missouri has figured out the trifecta for startup success:
1) Offer multiple support resources,
2) Offer funding opportunities for high-tech, high-growth potential startups, and
3) Keep your cost of living low.
Those efforts combined have created a formula of success and survival for Missouri startups.