Starting a Business? Here’s the Best State To Do It, Study Says
The United States is regarded as the land of opportunity, but trying to make it here as a startup business can be extremely challenging.
Statistics indicate as many as 90% of startups eventually fail, with at least one in five flaming out in their first year. There are a number of reasons for this low success rate, with location playing a major role.
“Around half of all new businesses don’t survive five years, so the idea of becoming a business owner can be daunting, especially with the current high cost of living," said analyst Chip Lupo of the personal finance company WalletHub. "That’s why it’s crucial to establish your business in a state that will maximize your chances of success.
"The best states have low corporate tax rates, strong economies, an abundance of reliable workers, easy access to financing and affordable real estate. On top of that, you’ll need to make sure you start in a place with an engaged customer base, if you’re operating locally.”
WalletHub released a study analyzing all 50 states across 25 different factors to determine which ones are the best places to start a business. A state filled with sunshine and warm weather tops the list.
The five best states to start a business, per WalletHub
- Florida - 56.30 total score
- Utah - 55.24
- Texas - 54.07
- Oklahoma - 53.22
- Idaho - 52.49
Why Florida?
The Sunshine State isn't cheap, ranking 27th nationally in business costs, but its has the 12th-best access to resources and the No. 2 business environment in the country.
Additionally, Florida ranks fifth in the average growth of number of small businesses, while possessing the third-most startups per capita and the highest percentage of adults who engage in entrepreneurship.
"The number of small businesses in the state grew by nearly 16% between 2017 and 2023, the fifth-highest percentage in the country," WalletHub writes.
Florida also has the 15th-lowest corporate tax rate and has seen an uptick in working age population (16-64) in recent years.
Other tidbits from the study
- Texas has the best business environment in the country and is No. 11 in access to resources.
- While Mississippi is just 41st in access to resources, it has the lowest cost of business in the U.S.
- California is expensive (No. 49 in business costs) but is No. 1 in resources and No. 3 in business environment.
You can access the entire study right here.