You’re an up-and-comer. You’ve got a promising business idea and the gusto to get the word out there, but should you set up shop in Utah, or look for more fertile grounds? Although the University of Utah boasts one of the highest rates of student entrepreneurship, Utah itself might not be the best place to get your business started. It comes down to two things: a limited market and population.
Make no mistake, you get a lot of write-offs for starting up in Utah, and do enjoy some of the most lenient regulations in the States, but you also get a logistical anomaly. If what you intend to sell is physical or service-based, then Utah’s location will immediately become a problem. Simply put, when it comes to shipping your product out of the state you’ll have to ship it a long way to get to the more lucrative markets like California or the East Coast. In addition, your shipping options are limited. There’s basically ground freight and nothing else. This means slower shipping times and a higher price as you send things thousands of miles away. You can’t exactly charter a ship out of Utah, and the costs for air freight are too expensive for a startup unless you plan on handing down that cost to your customers.
But what if you don’t plan to branch out and instead keep it a local business? Not a bad idea per se, but Utah is one of the least populated states in the nation. When it comes to maintaining a bottom line and keeping out of the red, you want to avoid any hindrances that you can. Utah’s limited population and marketplace will quickly become a drawback. If it is true that Utah is one of the most entrepreneur-friendly states in the country, that only compounds the issue. As more big businesses move in to take advantage of the state’s lax laws and plentiful land, and as more startups crowd the market, it becomes that much easier for your business to get lost in a sea of noise or worse, driven out of the market altogether.
There’s also the ethical questions to consider. While Utah might be a ‘growing’ state there is a host of problems that come with that growth and one of them is overpopulation. Utah may be one of the least populated states in the US, but already there are signs that it’s becoming overpopulated for what it can sustain environmentally. The Great Salt Lake is shrinking, Salt Lake City has some of the worst air pollution in the country, and clean water availability has become a concern forcing lawmakers to think about ways to dam up the Bear River just to meet demand.
If your business would benefit from a large market, Utah isn’t necessarily set to give that to you. If your business contributes to the pollution problem, don’t expect to curry favor with the locals. If your business wants to expand, Utah presents an interesting logistical challenge for that growth. I mean, there are a few business models that won’t suffer from any of these problems. Software is a good example, where the upfront costs are low and the logistics simple. However, if your idea is retail or food or some type of service-based business then there are probably better places to look.