Map shows best and worst states to start a business
A new report from the personal finance website WalletHub has ranked the top U.S. states in which to start a business.
Why It Matters
The ranking highlights where founders may find a more supportive launchpad—including states with stronger startup activity, easier access to financing, growing workforces and lower corporate taxes.
What To Know
According to WalletHub, these are the top five states for starting a business:
- Florida
- Utah
- Texas
- Oklahoma
- Idaho
Florida claimed the top spot, driven by strong entrepreneurial activity and rapid small‑business expansion. WalletHub noted that the state had the third‑highest number of startups per capita and the largest share of adults involved in entrepreneurship. Small businesses grew by almost 16 percent from 2017 to 2023—the fifth‑fastest rate nationally.
The report cited several advantages behind Florida’s surge, including relatively low corporate taxes and a workforce that is expanding despite the state’s sizable retiree population. Florida’s working‑age population is growing faster than in all but five other states, and its workers rank among the most engaged in the country, according to WalletHub’s research.
Utah placed second, with WalletHub reporting that it was the second‑easiest state for securing business loans and had recorded one of the nation’s highest year‑over‑year employment gains at more than 3 percent. Lower‑than‑average health insurance premiums also help reduce operating costs for employers.
Utah’s high ranking was further supported by recognition on the Center for Digital Government’s “Digital States Survey,” which evaluates how effectively states use technology to improve efficiency. “Tech-savvy Utahans should be able to capitalize on their skillset and access to good technology to help their businesses thrive,” WalletHub said in its report.
Texas ranked third, with WalletHub noting that the state had the 10th‑highest entrepreneurship rate and the 11th‑largest share of fast‑expanding firms.
More than half of Texas businesses belong to “strong clusters”—networks of companies specializing in the same sector—which can provide easier access to suppliers and established customer bases, the report said. It also highlighted Texas’ fast‑rising working‑age population, strong employment growth and a workforce that ranks among the most engaged nationally.
In WalletHub’s report, New Jersey, Connecticut, Hawaii, Maryland and Rhode Island—ranked 45 to 50—were the worst states for starting a business.
How It Was Calculated
WalletHub ranked all 50 states by scoring them across three areas—business environment, access to resources and business costs—using 25 weighted metrics. Each metric was graded on a 100‑point scale, and the states’ weighted averages were used to determine their overall scores and final ranking.
What People Are Saying
WalletHub analyst Chip Lupo said in the report: “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. 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.”
What Happens Next
WalletHub releases its “Best and Worst States to Start a Business” report annually.
