These Are The Best And Worst States To Start A Small Business

Building a small business from inception to the point where its thriving and set up for long-term success is no small feat.

According to data from the Bureau of Labor Statistics, about 1/5th of all startups don’t survive to their first birthday. And nearly half will never make it to their fifth.

But as Wallethub points out, there are different reasons why startups fail. Among them, a bad location is one of the most commonly cited. But beyond situating the business in a popular thoroughfare, choosing the right state to launch your business can also make a huge difference in its odds of success.

States that offer the right conditions for success, such as access to cash, skilled workers, affordable office space and other factors, can be critical in helping a business thrive.

In a recent study, WalletHub compared the 50 states across 26 metrics for startup success, assigning each state a number in each category, then computing which states are the most business-friendly overall.

The results are hardly surprising: High-tax, Democrat-controlled states in the northeast offer some of the worst conditions for businesses, while low-tax states, Republican-controlled states in the Sun Belt have some of the best conditions.

Source: WalletHub

See the complete ranking below:

  1. Texas 
  2. Utah   
  3. Georgia   
  4. North Dakota 
  5. Oklahoma   
  6. Florida   
  7. Arizona   
  8. California   
  9. Montana   
  10. Colorado   
  11. Idaho   
  12. Washington   
  13. Mississippi
  14. North Carolina
  15. Louisiana
  16. Kansas
  17. Minnesota
  18. Michigan
  19. Nebraska
  20. Tennessee
  21. Kentucky
  22. South Dakota
  23. Maine
  24. Indiana
  25. Nevada
  26. Oregon
  27. New Mexico
  28. Alaska
  29. Alabama
  30. Wisconsin
  31. Arkansas
  32. Missouri
  33. Wyoming
  34. Ohio
  35. Illinois
  36. Massachusetts
  37. Iowa
  38. South Carolina
  39. Virginia
  40. Maryland
  41. West Virginia
  42. New York
  43. Vermont
  44. Delaware
  45. Pennsylvania
  46. Connecticut
  47. Hawaii
  48. New Hampshire
  49. New Jersey
  50. Rhode Island