Best States To Start A Business

Last updated September 18, 2024

Total Score
Business Environment
Cost of Doing Business
Funding & Resource Availability
Top
Last
Business Friendliness Index Score
1.TexasTexas70.2
2.FloridaFlorida65.7
3.New MexicoNew Mexico64.0
4.OregonOregon63.9
5.North CarolinaNorth Carolina63.3
6.WyomingWyoming63.0
7.GeorgiaGeorgia62.8
8.OhioOhio61.7
9.ColoradoColorado61.3
10.IndianaIndiana61.0
11.NevadaNevada60.6
12.VirginiaVirginia60.5
13.ArizonaArizona60.5
14.IdahoIdaho60.5
15.MississippiMississippi60.5
16.WashingtonWashington60.1
17.South DakotaSouth Dakota59.9
18.OklahomaOklahoma59.8
19.South CarolinaSouth Carolina59.8
20.MichiganMichigan59.4
21.UtahUtah59.1
22.MissouriMissouri59.1
23.KentuckyKentucky58.8
24.TennesseeTennessee58.4
25.CaliforniaCalifornia57.8
26.IowaIowa57.4
27.MinnesotaMinnesota56.9
28.NebraskaNebraska56.9
29.LouisianaLouisiana56.9
30.AlabamaAlabama55.5
31.DelawareDelaware55.5
32.North DakotaNorth Dakota55.3
33.MassachusettsMassachusetts55.1
34.MontanaMontana55.1
35.KansasKansas54.4
36.PennsylvaniaPennsylvania54.2
37.WisconsinWisconsin54.0
38.ArkansasArkansas53.9
39.West VirginiaWest Virginia53.1
40.IllinoisIllinois52.6
41.New YorkNew York51.4
42.New JerseyNew Jersey51.0
43.AlaskaAlaska50.2
44.MarylandMaryland49.5
45.MaineMaine49.5
46.VermontVermont48.8
47.New HampshireNew Hampshire48.7
48.ConnecticutConnecticut48.3
49.HawaiiHawaii46.5
50.Rhode IslandRhode Island43.3

Introduction

As the United States emerges from the shadows of the COVID-19 pandemic, entrepreneurship is back in the spotlight. With a burgeoning economy and the advent of new opportunities, many are contemplating taking the plunge into the world of business ownership. However, the success of a startup hinges significantly on its geographical location. The question innately arises - which states provide the optimal environment for nurturing a new business? The 'Business Friendliness Index Score' is a comprehensive score determined by comparing the 50 US states across three key dimensions: 1) Business Environment, 2) Access to Resources, and 3) Business Costs, using 25 relevant metrics.

  • Texas takes the crown as the most accommodating state in which to launch a business, boasting the highest 'Business Friendliness Index Score' of 70.2, thanks to its robust economy, low taxes, and friendly regulatory environment.
  • Generally, states in the Southern and Western regions tend to rank higher in terms of business friendliness, with states like Texas, Florida, New Mexico, and Oregon scoring above 63.0 points.
  • Surprisingly, traditional economic powerhouses like New York and California lag behind in this ranking, with scores of 51.4 and 57.8 respectively, due to higher business operating costs and relatively stricter regulatory systems.
  • The data reveals the Northeastern states like Vermont, New Hampshire, and Connecticut, and the Island state of Hawaii, display less favorable conditions for startups due to factors such as high costs of living, complex regulation, and comparatively smaller markets.
  • Available resources and business costs hold particular importance in determining a state's favorability towards startups. Wyoming, with a score of 63.0, stands out in these sectors with its abundant natural resources and competitive business costs, making it a lucrative choice for entrepreneurs.

Best States To Start A Business

Region ↕Total Score↕Business Environment↕Cost of Doing Business↕Funding & Resource Availability↕
Alabama iconAlabama55.526.019.79.8
Alaska iconAlaska50.225.117.67.6
Arizona iconArizona60.529.021.210.4
Arkansas iconArkansas53.924.819.99.1
California iconCalifornia57.835.610.911.3
Colorado iconColorado61.332.217.611.5
Connecticut iconConnecticut48.327.213.57.6
Delaware iconDelaware55.528.016.011.5
Florida iconFlorida65.733.918.113.7
Georgia iconGeorgia62.829.620.313.0
Hawaii iconHawaii46.526.114.06.4
Idaho iconIdaho60.530.820.39.5
Illinois iconIllinois52.630.014.18.5
Indiana iconIndiana61.028.321.011.7
Iowa iconIowa57.426.522.38.5
Kansas iconKansas54.424.518.611.2
Kentucky iconKentucky58.828.421.98.5
Louisiana iconLouisiana56.928.420.48.0
Maine iconMaine49.524.118.57.0
Maryland iconMaryland49.525.715.08.8
Massachusetts iconMassachusetts55.131.910.412.8
Michigan iconMichigan59.429.420.69.4
Minnesota iconMinnesota56.929.917.89.2
Mississippi iconMississippi60.528.322.39.9
Missouri iconMissouri59.125.123.110.8
Montana iconMontana55.129.917.37.9
Nebraska iconNebraska56.925.720.910.3
Nevada iconNevada60.629.223.28.2
New Hampshire iconNew Hampshire48.726.713.68.4
New Jersey iconNew Jersey51.029.013.58.5
New Mexico iconNew Mexico64.033.723.17.2
New York iconNew York51.428.212.510.7
North Carolina iconNorth Carolina63.330.922.79.7
North Dakota iconNorth Dakota55.324.719.611.1
Ohio iconOhio61.727.624.010.2
Oklahoma iconOklahoma59.829.621.09.3
Oregon iconOregon63.938.018.87.1
Pennsylvania iconPennsylvania54.229.316.08.8
Rhode Island iconRhode Island43.320.316.36.6
South Carolina iconSouth Carolina59.827.021.811.0
South Dakota iconSouth Dakota59.926.722.211.1
Tennessee iconTennessee58.429.218.111.2
Texas iconTexas70.233.123.014.1
Utah iconUtah59.129.717.711.7
Vermont iconVermont48.824.816.18.0
Virginia iconVirginia60.529.019.012.5
Washington iconWashington60.129.721.78.8
West Virginia iconWest Virginia53.127.319.56.3
Wisconsin iconWisconsin54.025.119.59.5
Wyoming iconWyoming63.034.120.08.8

By Region

Alabama

See Less

Ranked in U.S.

#30

Business Environment

26.0

Ranked in U.S.

#39

Cost of Doing Business

19.7

Ranked in U.S.

#23

Funding & Resource Availability

9.8

Ranked in U.S.

#22

Alaska

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Ranked in U.S.

#43

Business Environment

25.1

Ranked in U.S.

#44

Cost of Doing Business

17.6

Ranked in U.S.

#36

Funding & Resource Availability

7.6

Ranked in U.S.

#43

Arizona

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Ranked in U.S.

#13

Business Environment

29.0

Ranked in U.S.

#23

Cost of Doing Business

21.2

Ranked in U.S.

#13

Funding & Resource Availability

10.4

Ranked in U.S.

#18

Arkansas

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Ranked in U.S.

#38

Business Environment

24.8

Ranked in U.S.

#45

Cost of Doing Business

19.9

Ranked in U.S.

#22

Funding & Resource Availability

9.1

Ranked in U.S.

#29

California

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Ranked in U.S.

#25

Business Environment

35.6

Ranked in U.S.

#2

Cost of Doing Business

10.9

Ranked in U.S.

#49

Funding & Resource Availability

11.3

Ranked in U.S.

#10

Colorado

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Ranked in U.S.

#9

Business Environment

32.2

Ranked in U.S.

#7

Cost of Doing Business

17.6

Ranked in U.S.

#35

Funding & Resource Availability

11.5

Ranked in U.S.

#8

Connecticut

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Ranked in U.S.

#48

Business Environment

27.2

Ranked in U.S.

#33

Cost of Doing Business

13.5

Ranked in U.S.

#47

Funding & Resource Availability

7.6

Ranked in U.S.

#44

Delaware

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Ranked in U.S.

#31

Business Environment

28.0

Ranked in U.S.

#30

Cost of Doing Business

16.0

Ranked in U.S.

#40

Funding & Resource Availability

11.5

Ranked in U.S.

#9

Florida

See More

Ranked in U.S.

#2

Business Environment

33.9

Ranked in U.S.

#4

Cost of Doing Business

18.1

Ranked in U.S.

#31

Funding & Resource Availability

13.7

Ranked in U.S.

#2

Georgia

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Ranked in U.S.

#7

Business Environment

29.6

Ranked in U.S.

#16

Cost of Doing Business

20.3

Ranked in U.S.

#19

Funding & Resource Availability

13.0

Ranked in U.S.

#3

Hawaii

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Ranked in U.S.

#49

Business Environment

26.1

Ranked in U.S.

#38

Cost of Doing Business

14.0

Ranked in U.S.

#44

Funding & Resource Availability

6.4

Ranked in U.S.

#49

Idaho

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Ranked in U.S.

#14

Business Environment

30.8

Ranked in U.S.

#10

Cost of Doing Business

20.3

Ranked in U.S.

#20

Funding & Resource Availability

9.5

Ranked in U.S.

#24

Illinois

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Ranked in U.S.

#40

Business Environment

30.0

Ranked in U.S.

#11

Cost of Doing Business

14.1

Ranked in U.S.

#43

Funding & Resource Availability

8.5

Ranked in U.S.

#36

Indiana

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Ranked in U.S.

#10

Business Environment

28.3

Ranked in U.S.

#27

Cost of Doing Business

21.0

Ranked in U.S.

#14

Funding & Resource Availability

11.7

Ranked in U.S.

#6

Iowa

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Ranked in U.S.

#26

Business Environment

26.5

Ranked in U.S.

#37

Cost of Doing Business

22.3

Ranked in U.S.

#8

Funding & Resource Availability

8.5

Ranked in U.S.

#35

Kansas

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Ranked in U.S.

#35

Business Environment

24.5

Ranked in U.S.

#48

Cost of Doing Business

18.6

Ranked in U.S.

#29

Funding & Resource Availability

11.2

Ranked in U.S.

#12

Kentucky

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Ranked in U.S.

#23

Business Environment

28.4

Ranked in U.S.

#25

Cost of Doing Business

21.9

Ranked in U.S.

#10

Funding & Resource Availability

8.5

Ranked in U.S.

#34

Louisiana

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Ranked in U.S.

#29

Business Environment

28.4

Ranked in U.S.

#26

Cost of Doing Business

20.4

Ranked in U.S.

#18

Funding & Resource Availability

8.0

Ranked in U.S.

#40

Maine

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Ranked in U.S.

#45

Business Environment

24.1

Ranked in U.S.

#49

Cost of Doing Business

18.5

Ranked in U.S.

#30

Funding & Resource Availability

7.0

Ranked in U.S.

#47

Maryland

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Ranked in U.S.

#44

Business Environment

25.7

Ranked in U.S.

#41

Cost of Doing Business

15.0

Ranked in U.S.

#42

Funding & Resource Availability

8.8

Ranked in U.S.

#33

Massachusetts

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Ranked in U.S.

#33

Business Environment

31.9

Ranked in U.S.

#8

Cost of Doing Business

10.4

Ranked in U.S.

#50

Funding & Resource Availability

12.8

Ranked in U.S.

#4

Michigan

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Ranked in U.S.

#20

Business Environment

29.4

Ranked in U.S.

#18

Cost of Doing Business

20.6

Ranked in U.S.

#17

Funding & Resource Availability

9.4

Ranked in U.S.

#26

Minnesota

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Ranked in U.S.

#27

Business Environment

29.9

Ranked in U.S.

#12

Cost of Doing Business

17.8

Ranked in U.S.

#33

Funding & Resource Availability

9.2

Ranked in U.S.

#28

Mississippi

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Ranked in U.S.

#15

Business Environment

28.3

Ranked in U.S.

#28

Cost of Doing Business

22.3

Ranked in U.S.

#7

Funding & Resource Availability

9.9

Ranked in U.S.

#21

Missouri

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Ranked in U.S.

#22

Business Environment

25.1

Ranked in U.S.

#42

Cost of Doing Business

23.1

Ranked in U.S.

#4

Funding & Resource Availability

10.8

Ranked in U.S.

#16

Montana

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Ranked in U.S.

#34

Business Environment

29.9

Ranked in U.S.

#13

Cost of Doing Business

17.3

Ranked in U.S.

#37

Funding & Resource Availability

7.9

Ranked in U.S.

#42

Nebraska

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Ranked in U.S.

#28

Business Environment

25.7

Ranked in U.S.

#40

Cost of Doing Business

20.9

Ranked in U.S.

#16

Funding & Resource Availability

10.3

Ranked in U.S.

#19

Nevada

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Ranked in U.S.

#11

Business Environment

29.2

Ranked in U.S.

#20

Cost of Doing Business

23.2

Ranked in U.S.

#2

Funding & Resource Availability

8.2

Ranked in U.S.

#39

New Hampshire

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Ranked in U.S.

#47

Business Environment

26.7

Ranked in U.S.

#36

Cost of Doing Business

13.6

Ranked in U.S.

#45

Funding & Resource Availability

8.4

Ranked in U.S.

#38

New Jersey

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Ranked in U.S.

#42

Business Environment

29.0

Ranked in U.S.

#24

Cost of Doing Business

13.5

Ranked in U.S.

#46

Funding & Resource Availability

8.5

Ranked in U.S.

#37

New Mexico

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Ranked in U.S.

#3

Business Environment

33.7

Ranked in U.S.

#5

Cost of Doing Business

23.1

Ranked in U.S.

#3

Funding & Resource Availability

7.2

Ranked in U.S.

#45

New York

See More

Ranked in U.S.

#41

Business Environment

28.2

Ranked in U.S.

#29

Cost of Doing Business

12.5

Ranked in U.S.

#48

Funding & Resource Availability

10.7

Ranked in U.S.

#17

North Carolina

See More

Ranked in U.S.

#5

Business Environment

30.9

Ranked in U.S.

#9

Cost of Doing Business

22.7

Ranked in U.S.

#6

Funding & Resource Availability

9.7

Ranked in U.S.

#23

North Dakota

See More

Ranked in U.S.

#32

Business Environment

24.7

Ranked in U.S.

#47

Cost of Doing Business

19.6

Ranked in U.S.

#24

Funding & Resource Availability

11.1

Ranked in U.S.

#14

Ohio

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Ranked in U.S.

#8

Business Environment

27.6

Ranked in U.S.

#31

Cost of Doing Business

24.0

Ranked in U.S.

#1

Funding & Resource Availability

10.2

Ranked in U.S.

#20

Oklahoma

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Ranked in U.S.

#18

Business Environment

29.6

Ranked in U.S.

#17

Cost of Doing Business

21.0

Ranked in U.S.

#15

Funding & Resource Availability

9.3

Ranked in U.S.

#27

Oregon

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Ranked in U.S.

#4

Business Environment

38.0

Ranked in U.S.

#1

Cost of Doing Business

18.8

Ranked in U.S.

#28

Funding & Resource Availability

7.1

Ranked in U.S.

#46

Pennsylvania

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Ranked in U.S.

#36

Business Environment

29.3

Ranked in U.S.

#19

Cost of Doing Business

16.0

Ranked in U.S.

#41

Funding & Resource Availability

8.8

Ranked in U.S.

#32

Rhode Island

See More

Ranked in U.S.

#50

Business Environment

20.3

Ranked in U.S.

#50

Cost of Doing Business

16.3

Ranked in U.S.

#38

Funding & Resource Availability

6.6

Ranked in U.S.

#48

South Carolina

See More

Ranked in U.S.

#19

Business Environment

27.0

Ranked in U.S.

#34

Cost of Doing Business

21.8

Ranked in U.S.

#11

Funding & Resource Availability

11.0

Ranked in U.S.

#15

South Dakota

See More

Ranked in U.S.

#17

Business Environment

26.7

Ranked in U.S.

#35

Cost of Doing Business

22.2

Ranked in U.S.

#9

Funding & Resource Availability

11.1

Ranked in U.S.

#13

Tennessee

See More

Ranked in U.S.

#24

Business Environment

29.2

Ranked in U.S.

#21

Cost of Doing Business

18.1

Ranked in U.S.

#32

Funding & Resource Availability

11.2

Ranked in U.S.

#11

Texas

See More

Ranked in U.S.

#1

Business Environment

33.1

Ranked in U.S.

#6

Cost of Doing Business

23.0

Ranked in U.S.

#5

Funding & Resource Availability

14.1

Ranked in U.S.

#1

Utah

See More

Ranked in U.S.

#21

Business Environment

29.7

Ranked in U.S.

#15

Cost of Doing Business

17.7

Ranked in U.S.

#34

Funding & Resource Availability

11.7

Ranked in U.S.

#7

Vermont

See More

Ranked in U.S.

#46

Business Environment

24.8

Ranked in U.S.

#46

Cost of Doing Business

16.1

Ranked in U.S.

#39

Funding & Resource Availability

8.0

Ranked in U.S.

#41

Virginia

See More

Ranked in U.S.

#12

Business Environment

29.0

Ranked in U.S.

#22

Cost of Doing Business

19.0

Ranked in U.S.

#27

Funding & Resource Availability

12.5

Ranked in U.S.

#5

Washington

See More

Ranked in U.S.

#16

Business Environment

29.7

Ranked in U.S.

#14

Cost of Doing Business

21.7

Ranked in U.S.

#12

Funding & Resource Availability

8.8

Ranked in U.S.

#31

West Virginia

See More

Ranked in U.S.

#39

Business Environment

27.3

Ranked in U.S.

#32

Cost of Doing Business

19.5

Ranked in U.S.

#26

Funding & Resource Availability

6.3

Ranked in U.S.

#50

Wisconsin

See More

Ranked in U.S.

#37

Business Environment

25.1

Ranked in U.S.

#43

Cost of Doing Business

19.5

Ranked in U.S.

#25

Funding & Resource Availability

9.5

Ranked in U.S.

#25

Wyoming

See More

Ranked in U.S.

#6

Business Environment

34.1

Ranked in U.S.

#3

Cost of Doing Business

20.0

Ranked in U.S.

#21

Funding & Resource Availability

8.8

Ranked in U.S.

#30

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