Starting a business is never easy. According to U.S. Bureau of Labor Statistics data, about a fifth of all startups typically don’t survive past year one of operation, and nearly half never make it to their fifth anniversary.
But startups fail for different reasons, a “bad location” among the most common. Choosing the right state for a business is therefore crucial to its success. A state that provides the ideal conditions for business creation — access to cash, human capital and affordable office space, for instance — can help new ventures not only take off but also thrive.
In this study, WalletHub’s analysts compared the 50 states across 20 key indicators of startup success to determine the most fertile grounds in which to launch and grow an enterprise. Read on for our findings, business insight from a panel of experts and a full description of our methodology.
Starting a business is never easy. According to U.S. Bureau of Labor Statistics data, about a fifth of all startups typically don’t survive past year one of operation, and nearly half never make it to their fifth anniversary.
But startups fail for different reasons, a “bad location” among the most common. Choosing the right state for a business is therefore crucial to its success. A state that provides the ideal conditions for business creation — access to cash, human capital and affordable office space, for instance — can help new ventures not only take off but also thrive.
In this study, WalletHub’s analysts compared the 50 states across 20 key indicators of startup success to determine the most fertile grounds in which to launch and grow an enterprise. Read on for our findings, business insight from a panel of experts and a full description of our methodology.
Best & Worst States to Start a Business
| Overall Rank (1=Best) |
State | Total Score | ‘Business Environment’ Rank | ‘Access to Resources’ Rank | ‘Business Costs’ Rank |
|---|---|---|---|---|---|
| 1 | North Dakota | 69.38 | 1 | 5 | 30 |
| 2 | Texas | 59.33 | 3 | 10 | 25 |
| 3 | Utah | 57.32 | 11 | 1 | 29 |
| 4 | Oklahoma | 56.80 | 6 | 28 | 1 |
| 5 | Nebraska | 54.34 | 5 | 23 | 8 |
| 6 | Florida | 52.68 | 9 | 22 | 15 |
| 7 | Colorado | 52.55 | 7 | 9 | 32 |
| 8 | Georgia | 52.32 | 13 | 14 | 10 |
| 9 | Missouri | 51.74 | 10 | 33 | 16 |
| 10 | South Dakota | 51.72 | 15 | 17 | 7 |
| 11 | Montana | 51.65 | 4 | 49 | 14 |
| 12 | North Carolina | 50.01 | 27 | 16 | 6 |
| 13 | Alaska | 49.92 | 2 | 35 | 44 |
| 14 | Wyoming | 49.64 | 12 | 24 | 23 |
| 15 | California | 48.25 | 8 | 3 | 48 |
| 16 | Michigan | 48.24 | 20 | 50 | 3 |
| 17 | Virginia | 47.34 | 17 | 13 | 33 |
| 18 | Massachusetts | 47.31 | 14 | 2 | 45 |
| 19 | Kentucky | 47.09 | 31 | 42 | 5 |
| 20 | Vermont | 46.83 | 28 | 21 | 27 |
| 21 | Louisiana | 46.55 | 30 | 32 | 17 |
| 22 | West Virginia | 45.79 | 44 | 39 | 2 |
| 23 | Iowa | 45.62 | 19 | 18 | 36 |
| 24 | Wisconsin | 45.36 | 18 | 46 | 28 |
| 25 | Illinois | 45.35 | 21 | 15 | 37 |
| 26 | Washington | 45.26 | 24 | 4 | 41 |
| 27 | Tennessee | 45.26 | 35 | 40 | 13 |
| 28 | Mississippi | 45.25 | 46 | 36 | 4 |
| 29 | Ohio | 45.23 | 22 | 45 | 22 |
| 30 | Minnesota | 44.66 | 16 | 12 | 39 |
| 31 | Indiana | 44.34 | 33 | 44 | 19 |
| 32 | Idaho | 43.99 | 36 | 47 | 11 |
| 33 | Oregon | 43.91 | 25 | 30 | 34 |
| 34 | Kansas | 43.85 | 38 | 25 | 26 |
| 35 | Nevada | 43.79 | 29 | 37 | 31 |
| 36 | Arizona | 43.76 | 37 | 38 | 21 |
| 37 | Maine | 43.65 | 26 | 48 | 24 |
| 38 | South Carolina | 43.42 | 42 | 41 | 12 |
| 39 | New York | 42.64 | 23 | 6 | 47 |
| 40 | New Mexico | 42.11 | 48 | 26 | 20 |
| 41 | Arkansas | 41.43 | 45 | 43 | 18 |
| 42 | Alabama | 40.92 | 50 | 31 | 9 |
| 43 | Delaware | 40.64 | 41 | 7 | 40 |
| 44 | Connecticut | 39.95 | 34 | 8 | 49 |
| 45 | Pennsylvania | 39.74 | 43 | 19 | 38 |
| 46 | Hawaii | 38.51 | 32 | 34 | 43 |
| 47 | Rhode Island | 38.41 | 47 | 29 | 35 |
| 48 | Maryland | 37.86 | 40 | 11 | 46 |
| 49 | New Hampshire | 34.68 | 49 | 27 | 42 |
| 50 | New Jersey | 34.54 | 39 | 20 | 50 |
Starting a business is never easy. According to U.S. Bureau of Labor Statistics data, about a fifth of all startups typically don’t survive past year one of operation, and nearly half never make it to their fifth anniversary.
But startups fail for different reasons, a “bad location” among the most common. Choosing the right state for a business is therefore crucial to its success. A state that provides the ideal conditions for business creation — access to cash, human capital and affordable office space, for instance — can help new ventures not only take off but also thrive.
In this study, WalletHub’s analysts compared the 50 states across 20 key indicators of startup success to determine the most fertile grounds in which to launch and grow an enterprise. Read on for our findings, business insight from a panel of experts and a full description of our methodology.
