See where New Mexico ranks for small business success
A recent Bankrate study ranked New Mexico 45th among the least friendly states for small businesses. The study analyzed various factors, such as access to capital, labor availability, infrastructure, and policy environments, to determine how conducive each state is for small business growth. Unfortunately, New Mexico’s poor performance across multiple metrics highlights significant barriers for entrepreneurs in the state.
Access to Capital
New Mexico ranks 30th in access to capital, indicating that small business owners face challenges securing funding. While states like Washington and Utah excel in providing robust financial resources through programs like SBA 7(a) loans, New Mexico lacks comparable opportunities. This gap disadvantages local entrepreneurs, limiting their ability to start or expand businesses.
Small Business Activity
Ranked 24th for small business activity, New Mexico performs moderately regarding business openings and closures but lags far behind leaders like Washington and Nevada. The state’s limited industrial base hampered its overall economic dynamism, which prevented it from climbing higher in this category.
Labor Availability and Quality
One of the most significant challenges for New Mexico is its labor force. The state ranks a low 46th for the availability and quality of labor. This reflects a shortage of workers and a less educated workforce compared to top states. For example, Washington benefits from a highly skilled labor pool, ranking 3rd in this category, whereas New Mexico struggles to meet the demands of small businesses hiring qualified employees.
Infrastructure
Infrastructure is another weak point, with New Mexico ranking 39th. Poor road and bridge conditions, coupled with inconsistent internet and utility services, make it harder for businesses to operate efficiently. This ranking contrasts sharply with top states like Nevada, which boasts the best infrastructure for small businesses.
Business Costs and Policy Environment
While New Mexico ranks 18th in business costs, indicating relatively affordable labor and operational expenses, it scores a middling 25th in policy and regulation. Tax policies and regulatory frameworks are not as burdensome as in some states, but they lack the pro-business incentives that help states like Wyoming and Florida excel.
What It Means for Entrepreneurs
New Mexico’s low ranking underscores the uphill battle small business owners face. While the state offers some affordability in operational costs, its lack of capital access, weak labor market, and poor infrastructure present significant challenges. If New Mexico hopes to improve its small business environment, targeted investments in workforce development, infrastructure, and financial resources will be critical.
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