These are the best five states to start a business in 2025
Starting a business from scratch is not for the faint of heart, but some states make it easier than others for founders to find success.
A recent study by Swoop Funding ranked U.S. states based on 11 metrics including Venture Capital (VC) investments, sales tax rates, health insurance costs, and the availability of coworking spaces, and found these are the top states in the country for launching a business:
"Texas is a magnet for entrepreneurs with its zero state income tax, low cost of living, and pro-business regulations," Swoop Funding CEO Andrea Reynolds told FOX Business. "Austin’s ‘Silicon Hills’ attracts top tech talent, while Houston and Dallas lead in energy, logistics, and fintech. The state’s strong startup support network and universities create an ideal launchpad for growth."
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Reynolds says Ohio is emerging as an affordable startup hub with strong investments in industries like healthcare, manufacturing, and food tech.
"Programs such as the Ohio Venture Fund and OhioXcelerate provide vital funding and mentorship, supported by top universities and accelerators, creating a diverse and collaborative environment for growth," she noted.
North Carolina has built a strong startup ecosystem fueled by top research universities and a highly skilled workforce, the Swoop Funding CEO says.
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"The state is leading in biotech, life sciences, and clean energy, with rising venture capital investment making it an attractive alternative to traditional startup hubs."
Mississippi supports startups through initiatives like CoBuilders, backed by partners like Microsoft, offering mentorship and funding.
The state’s focus on the Blue Economy and its low operational costs make it an attractive destination for innovative ventures, Reynolds explained.
With no state income tax and strong international ties, Florida offers founders great opportunities to scale.
"Florida has rapidly evolved into a major startup destination, especially in fintech and blockchain," Reynolds said. "Miami is now a global hub for digital finance, while Orlando and Tampa are thriving in gaming, tourism, and healthcare."
Reynolds says that what Swoop's study shows is that there is no single formula for startup success. Some states, like Texas and Florida, stand out for their tax advantages and pro-business environments, while others, like North Carolina and Ohio, offer cost-effective solutions and skilled workforces.
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"Entrepreneurs should look beyond just funding opportunities and consider how each state’s strengths align with their business needs," she added. "Choosing the right location can make all the difference in scaling successfully."