The Best (And Worst) States To Start A Business

Starting a business is one of the hardest things to do and it is even harder to maintain. Where you start your business can be vital to your business’ ability to survive and thrive. WalletHub looked into many factors that could contribute to the rise and fall of businesses in every state. Then, they put together a ranking to see which states are the best and the worst to start a business. To conduct this study, they looked at three major factors:

• Business Environment

• Access to Resources

• Business Costs

The numbers looked at for business environment are:

• Average Length of Work Week (in Hours)

• Share of Engaged Workers

• Growth in Number of Small Businesses

• Startups per Capita

• Growth of Average Business Revenues

• Five-Year Business Survival Rate

• Industry Variety

• Industry-Cluster Strength

• Entrepreneurship Index

• Share of Fast-Growing Firms

• “Digital States” Survey Grade

• Job Growth (2017 vs. 2013)

• GDP Growth (2018 vs. 2017)

The numbers looked at for the access to resources are:

• Financing Accessibility

• Human-Capital Availability

• Higher-Education Assets

• Share of College-Educated Population

• Working-Age Population Growth

The numbers looked at for the business costs are:

• Office-Space Affordability

• Labor Costs

• Average Annual Single Insurance Premium per Enrolled Employee

• Corporate Taxes

• Total Effective State & Local Tax Rates on Mature Corporate Headquarters

• Total Spending on Incentives as Share of GDP

• Cost of Living

So without further adieu, here are the best states to start a business

1. Texas

2. Utah

3. Georgia

4. North Dakota

5. Oklahoma

6. Florida

7. Arizona

8. California

9. Montana

10. Colorado

And… here are the worst states to start a business 

1. Rhode Island

2. New Jersey

3. New Hampshire

4. Hawaii

5. Connecticut

6. Pennsylvania

7. Delaware

8. Vermont

9. New York

10. West Virginia 

Want to know more? Here’s a few more interesting breakdowns, again, complements of WalletHub. 

Best Business Environment Rank 

1. Texas

2. North Dakota

3. California

4. Florida

5. Georgia

6. Colorado

7. Utah

8. Oklahoma

9. Arizona

10. Alaska

Worst Business Environment Rank

1. Rhode Island

2. West Virginia 

3. Connecticut

4. Pennsylvania

5. New Hampshire

6. Vermont

7. New Jersey

8. Illinois

9. Ohio

10. South Carolina

Most Access to Resources Rank

1. Washington

2. Utah

3. California

4. Connecticut

5. Minnesota

6. New York

7. Massachusetts

8. Illinois

9. Maryland

10. North Carolina

Least Access to Resources Rank

1. Vermont

2. Hawaii

3. South Carolina

4. Nevada

5. New Hampshire

6. Maine

7. Idaho

8. Arkansas

9. Tennessee

10. West Virginia

Best Business Cost Rank

1. Oklahoma

2. Mississippi

3. West Virginia 

4. South Dakota

5. Kentucky

6. Michigan

7. Idaho

8. Montana

9. Nebraska

10. Alabama

Highest Average Growth in Number of Small Businesses 

1. North Dakota

2. Utah

3. Florida

4. Texas

5. Nevada

Lowest Average Growth in Number of Small Businesses

1. West Virginia

2. Vermont

3. New Mexico

4. Mississippi

5. Ohio

Highest Labor Costs

1. Maryland

2. New Jersey

3. Alaska

4. Hawaii

5. Massachusetts

Lowest Labor Costs

1. Mississippi

2. Arkansas

3. West Virginia

4. Alabama

5. Kentucky

Highest Availability of Human Capital

1. Alaska

2. West Virginia

3. Mississippi

4. Washington

5. California

Lowest Availability of Human Capital

1. Vermont

2. New Hampshire

3. Massachusetts

4. Virginia

5. Colorado

Longest Average Work Week (in Hours)

1. Alaska

2. North Dakota

3. Wyoming

4. Texas

5. Louisiana

Shortest Average Work Week (in Hours)

1. Utah

2. Rhode Island

3. Oregon

4. Massachusetts

    5. Vermont 

Most Expensive Office Spaces

1. New York

2. Alaska

3. California

4. Maryland

5. New Jersey

Least Expensive Office Spaces

1. Iowa

2. Maine

3. South Dakota

4. Montana

5. Minnesota

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