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Best States To Start A Business

Best States To Start A Business
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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.

10 Best States to Start a Business

Full Data Set

Frequently Asked Questions

Methodology