When it comes to establishing a franchise, location is a crucial factor. New York, known for its vibrant atmosphere and economic opportunities, might seem like an attractive option at first glance. However, a deeper analysis of the cost of living reveals a different picture, especially for investors from Latin America. This article breaks down the economics that might make you reconsider your decision to invest in New York.
Overall Cost of Living in New York
New York ranks among the states with the highest cost of living in the U.S., which is reflected in all the basics, from food to housing. This high cost can quickly eat into the profit margins of any start-up, putting long-term sustainability at risk.
Now that we’ve seen the big picture, let’s dive into the specific costs entrepreneurs would face, starting with one of the most basic expenses: food.
1. Food prices
In New York, food prices are remarkably high. For example, the cost of a gallon of milk is more than $5, 20% more than in cities like Miami. This difference also extends to other basic products, making day-to-day life more expensive and reducing savings capacity.
Beyond the shopping basket, accommodation is another significant expense that we cannot ignore.
2. Cost of housing
Housing in New York is not only expensive, but it can be prohibitive. With average rents exceeding $1,700, housing in New York is much more expensive compared to other large cities such as Dallas or Miami. This factor is crucial, as startup and operating costs can skyrocket quickly.
With accommodation covered, it’s critical to consider how to get around the city, which brings us to transportation.
3. Transportation costs
Transportation in New York also presents a financial challenge. A monthly transit pass can cost up to $132, notably higher than in places like Orlando, where the cost is substantially lower. This increase in transportation costs can significantly affect those who rely on mobility for their businesses.
*Data as of the date of publication of this article
*Values expressed in US dollars
After exploring these costs in detail, it’s time to conclude and weigh up whether the investment in New York is really worth it.
While New York offers a dynamic business scene full of opportunities, the high costs associated with living and doing business here may not justify the investment, especially for those who come from economies with more limited purchasing power. For investors in Latin America, exploring states with a lower cost of living could represent not only financial relief, but also a greater likelihood of business success.
This analysis is not intended to deter business enthusiasts, but rather to offer a realistic perspective that allows them to make informed and strategic decisions about where and how to invest their resources. 4
If you are ready to learn about the best states to invest in and live in the United States, contact us. At Interlink FBC we are ready to accompany you in the search and analysis of a profitable franchise in a state that suits your resources and expectations.
