Forbes said Oklahoma was a bottom 10 state to start a business. I believe they missed it.
In my view, Oklahoma should receive a ‘better grade’ than Forbes gave us relative to starting, owning and operating a business. Per their posted study (listing state-by-state business-related opportunities), Forbes stated “Oklahoma is 42nd in "Best States to Start a Business in 2023.”
Forbes based its ranking off of “18 key metrics across five categories” to determine which states are best, or worst using five broad categories: business costs, business climate, financial accessibility, economy and workforce.
While Oklahoma actually scored the median level (three out of five rating) among all US states (specifically in business costs, business climate and economy), poor ratings in financial accessibility and a below-median workforce score pulled the state down.
Oklahoma is better than OK!
While I certainly respect the Forbes brand, my criteria (correctly validating the Oklahoma City Metro was the perfect place to headquarter all Express businesses) tells a different story. If I were to select key factors to confirm Oklahoma is a GREAT location for starting, owning and operating a business, they would include Low Cost of Living, Access to Labor, Low Taxes and Simple Regulation, Access to Capital, Energy-centric economy and the Friendliest People.
Low cost of living
Probably the most cited benefit of doing business in Oklahoma is the low cost of living. Overhead expenses are dramatically reduced, and employee compensation is extremely affordable, particularly because of the low housing costs. According to Sperling's Best Places, the average cost of living in Oklahoma is 84 percent that of the national average, with housing as the largest contributor to its low cost. On Sperling's list, national averages are equal to 100, and Oklahoma's housing costs ranked 63.
"Our associates enjoy the low cost of living and affordable real estate costs," Dusty Jackson, co-founder of Reinsurance Specialties said. "The American dollar goes a long way in housing, transportation, recreation and entertainment."
In fact, a study published by Moving.com states Oklahoma is the fourth cheapest state and is exceptionally affordable (i.e., super low home prices), and is also a great place to live. The state’s healthy economy, the abundance of job opportunities and friendly residents are reasons to move to Oklahoma. The study points out the state also offers a wide range of cities to live in whether it’s big-city living (e.g., Oklahoma City, Tulsa) or smaller-town life (e.g., Guthrie, Enid, Bartlesville, Ardmore, Durant).
Access to labor
Oklahoma boasts a relatively low unemployment rate which typically ranges from 3.5 to 5 percent (the high is notoriously linked to layoffs in the oil and gas industry). However, many entrepreneurs benefit from these layoffs as freed up labor comes with impressive skill sets, great work ethic and affordable talent. These elements make hiring easier.
"In recent years, Oklahoma has had one of the lowest unemployment rates in the country," Roy Williams, President & CEO of the Greater OKC Chamber, said. "The labor market moves toward a flatter representation and healthy equilibrium when our state experiences layoffs in the oil and gas market."
Low taxes and simple regulations
Another benefit of operating in Oklahoma is the straightforward regulations. Entrepreneurs in the Sooner State report easy-to-navigate regulations that made setting up a new business or expanding an existing one a simple process.
"Our managers seek to proactively grow the business and reach collective goals versus deals with paperwork and unnecessary regulations," Jake Fisher, President of BridgeRev. "Our state effectively and impressively ‘gets out of the way’ of pro-business entrepreneurs."
In addition to the friendly regulatory framework, Oklahomans enjoy modest tax rates. The state's corporate income tax stands at six percent, while the sales tax is 4.5 percent of a business's gross receipts. The personal income tax rate in Oklahoma has a top marginal rate of 5.25 percent, and there is no capital gains tax. All in all, Oklahoma's tax policy is not particularly burdensome for most small business owners.
"We work to create a thriving and robust work environment in Oklahoma City and the rest of the state. We are proud of our progress relative to pro-business policies and accessible opportunities to help companies hire, grow and succeed," Williams said.
Express Employment Professionals of Oklahoma (or Oklahoma Temporary Services) is the second largest employer in the state behind the State of Oklahoma
Access to capital
Small businesses in Oklahoma used to have difficulty to finding, attaining capital compared with larger and more active markets. But many niche companies and visionary leaders are having success securing financing – and with less red tape and high-hurdle terms than creditors, equity partners in New York City, Los Angeles and Silicon Valley. "One may think access to capital is difficult in Oklahoma due to the lack of sophisticated investment networks;" Williams added. "However, if a business shows promise, capital is available, and many Oklahomans venture capitalists and home offices are approachable to creative business plans with new ideas.”
"Venture capital is certainly available in Oklahoma," Fisher added. "But entrepreneurs need to leverage relationships and expand their network to garner an audience, make a pitch and secure debt or equity financing." Energy-centric economy
The oil and gas industry represents roughly 10 percent of Oklahoma's annual gross domestic product in Oklahoma and this is still a great state to launch an energy-related enterprise. However, the state is having success in totally different sectors ranging from Real Estate to Technology to Aviation to Tourism. Case in Point: The beautiful parks near Broken Bow, Oklahoma are receiving more than a million visitors annually (those looking for a brief pilgrimage into tranquil mountains and escape the stress of life in Dallas, Fort Worth and other metropolitan centers). And Oklahoma’s Aerospace industry (in OKC alone) produces $11.6 billion annually. OKC’s new aerospace study estimates there are 291 public and private sector firms employing 43,250 workers in the region. Mighty friendly people
I am not sure you can place a dollar amount on friendliness, manners, polite people and ‘smiles’…but it goes a long way in recruiting and retaining associates appreciating a friendly environment and a hometown culture.
It has been said Oklahoma is widely known for two things: friendliest people and the worst roads.
The Funk family and Funk companies finds that friendly, approachable and values-based individuals represent the kind of folk you want to partner with in building and growing successful companies (see my recent blog about ‘creating a great culture’).
Bonus: Successful entrepreneurs and business leaders in Oklahoma are VERY generous and have impressive philanthropic histories. Consider the many and impactful contributions made by families like Hamm, Bennett, Kaiser, Love, Meinders, McLaughlin, Nichols and more.
"One of the comments we hear from our international investors is ‘we are always impressed with the entrepreneurial spirit coming out of Oklahoma,” states Joshua Fahrenbruck, Vice President of Humphreys Capital. “Oklahoma’s leaders are driven by good business practices while also planning for philanthropic activities benefiting local communities and charitable recipients”.
I am sure Forbes was fair and equitable in their evaluation; however, I don’t believe you can go wrong placing your business stakes in the Oklahoma soil. Low cost of living, access to talent, access to capital, low taxation, lots of smiling and skilled people go a long way in creating a tangible pro-business environment.