Is Your State One of the Best for Starting a Business?

If you’re planning on starting or expanding a business, there will be obstacles to overcome in those first few years. One obstacle you may not have considered—but should—is location. Some states have better environments for starting up and, most importantly, sustaining a business.

WalletHub analyzed all 50 states across 20 different metrics and ranked which states have the best (and the worst) conditions for launching a business with a potential to flourish. Where does your state stand on the list?

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In this study, WalletHub considered three categories to compare every state: Business Environment, Access to Resources, and Business Costs. Business Environment took into account factors like the average growth in number of small businesses, startups per capita, and the five-year business survival rate. Access to Resources included factors such as the state’s human-capital availability and the share of the college-educated population. And Business Costs evaluated elements like corporate taxes, cost of living, and office-space affordability. 

Here’s how some states fared when considering these metrics:

Which states have the highest average growth in number of small businesses?

1. North Dakota
2. Texas
3. Utah
4. Florida
5. Nevada

 

Which states have the lowest average growth in number of small businesses?

1. West Virginia
2. New Mexico
3. Alabama
4. Vermont
5. Ohio 

 

Where can you find the lowest labor costs?

1. Mississippi
2. Arkansas
3. West Virginia
4. Alabama
5. Kentucky

 

Where can you find the highest labor costs?

1. Maryland
2. Alaska
3. New Jersey
4. Connecticut
5. Hawaii 

 

Which states have the highest availability of human capital?

1. New Mexico
2. Alaska
3. Louisiana
4. West Virginia
5. Georgia

 

Which states have the lowest availability of human capital?

1. Colorado
2. New Hampshire
3. Indiana
4. Montana
5. North Dakota

 

After matching up these metrics and many more, here’s how states compared overall:

Which states overall ranked as the best to start a business?

1. North Dakota
2. Texas
3. Utah
4. Oklahoma
5. Nebraska

 

Which states overall ranked as the worst to start a business?

1. New Jersey
2. New Hampshire
3. Maryland
4. Rhode Island
5. Hawaii 

 

Find more specific information about your state here.

RELATED:

NFIB’S Small Business Startup Checklist

Small Business Tips