Labor and utility costs could be blamed for the high cost of business formation in Massachusetts, according to a recent report. The Economic Competitiveness Benchmarking Report, published by the Business Leaders of Michigan, ranked each state’s business climate in terms of obstacles and benefits. Massachusetts costs were said to be 22 percent more than the national average even though the Commonwealth scored well in the areas of education and talent.
Experts are concerned that Massachusetts has reached a saturation point in terms of how many new business it can expect to support given the high cost of owning a company. Using figures from Moody’s Analytics, experts state that Massachusetts business owners have higher costs than anywhere else in the country.
Utilities in Massachusetts are the highest in the nation at 13.7 cents per kilowatt hour. Highway diesel fuel costs for the state are the nation’s highest at $2.59 as well. The state also has a 4 percent higher union representation than the rest of the nation. However, Massachusetts continues to rank as highly prosperous, ranking second in per capital income and first in private sector income. Massachusetts also ranked first in residents with at least a four-year college degree.
Starting a business will always cost money, and living in a state with high taxes and fees can increase that cost. However, by working with a business attorney, business owners may be able to reduce or eliminate some costs and make wise decisions about how to structure their businesses to receive the most tax benefits.
Source: Go Local Worcester, “Report: MA Cost of Business 22% Above Natl. Average,” Ashley Kann, Jan. 31, 2013