Friday, July 31, 2015

How hard is it to start a business in the US?

The Financial Times laments the fall of America, from 7th to 46th on the ease of starting a business:

One important reason for this dismal position is that in America entrepreneurs need, on average, to navigate six different legal and regulatory hurdles to start a company. In New Zealand and Canada, which top the league, there is just one procedure. The complexity faced by Americans means that it takes them on average about six days to create a start-up; in many other countries the process is much faster and cheaper.

I give credit to President Obama for flagging the issue in regards to occupational licensure,

Five decades ago, occupational licences were required only in specialist arenas such as nursing. But, in recent years they have proliferated so dramatically that a quarter of all American workers must secure one from individual states. Sometimes this is justified: airline pilots need licences. But often, as in the three years of training needed to become a security guard in Michigan or the thousands of hours required for hairdressers in Utah, the rationale is less clear.

but wish he were more aware of the many regulations he has promulgated that have the unintended effect of making it more difficult to do business.


  1. "...thousands of hours required for hairdressers in Utah, the rationale is less clear."

    And the haircuts aren't any better.

  2. It’s extremely tough to start any business like that on such a big country, but we need to be determined for it. I started doing Forex trading, it’s really great business and we don’t need to do much to start it. I am able to begin it all thanks to OctaFX broker with their 5 USD minimum, it’s perfect to start with this amount so we can gain experience and once we feel comfortable, it’s easier to increase upon the investment.

  3. Having started a few businesses in NY, there is no easy way to navigate the legal, financial and regulatory maze of requirements. Not only do new entrants have to navigate the federal requirements for taxation, reporting and registrations, they usually have to repeat the process at a state, regional and local level, burning through seed money faster than expected. Many times legal assistance is needed so the bill adds up quickly.
    Take a business that happens to use paint or other solvents or corrosive materials, OSHA, DEP, local fire departments, local and regional governments must be contacted for various requirements and registrations. If there is any emission from the business, the local and state environmental agencies also will be involved for impact analysis.
    The small time entrepreneur not only needs to be a master of their intended business but must also be an expert in regulatory and legal aspects, which is usually the furthest from their minds. Having business startup resources readily available for the new entrepreneur would give them a better picture of the complicated road they will be embarking upon.

  4. Hi! Nice post!Thanks for sharing it with us....really needed.There can be a lot of factors to Start a LLC in US but in general you'll need to choose between being tax effective (LLC) or investor friendly (C Corporation).If you'll need funding in the near future, then Start a C Corporation in US which is a good idea, otherwise register as an LLC for simpler structure and to minimize paperwork and taxes.