Starting a new business from the ground up is a challenging feat. With numerous factors contributing to the success of your start-up, there are things you should consider before choosing which state to begin. Some states are deemed a “Bad Location” to start your entrepreneurial journey.
This ranking is based on the business environment, including 24 other key metrics like an average work week, industry variety, growth in small businesses, resource access like venture investment amount per capita, college-educated population share, etc., and the cost of starting a business, like labor costs and corporate taxes.
Each metric mentioned above was then graded using a 100-point scale, with a score of 100 showcasing the most favorable conditions to start a business in. All the data being mentioned is provided courtesy of WalletHub.
We go from the best states to start a business in to the absolute worst.
1. Utah
The best state for a new venture, with a score of 61.08, Utah’s business environment is ranked at eight. It has the most abundant resources, ranking first here. Though the business costs are a bit high, earning it 29th in this category.
2. Georgia
At the 2nd position with a total score of 60.22, Georgia has the best business environment, with its historic landmarks and diverse cultural scene, securing a rank of 1. Access to resources is ranked 25th, and business costs rank it at 14.
3. Florida
With a score of 60.17, Florida is second in its business environment, ranking at 2. Access to resources presents hurdles, with Florida ranking 15th. In terms of business costs, the state navigates complexities, holding a rank of 28.
4. Idaho
Idaho has an overall score of 58.69, meaning it’s among the best states for a new business venture. Its business environment is marked at a rank of 6. Access to resources is a strength, with Idaho ranking 16th. The state ranks 11th when it comes to business costs.
5. Nevada
Securing 5th place with a score of 56.68, Nevada, known for its vibrant entertainment scene in Las Vegas, faces hurdles in its business environment, achieving a rank of 11. Access to resources is a strength, with Nevada ranking 11th. In terms of business costs, the state holds a rank of 21.
6. Arizona
Arizona has an overall score of 56.51, ranking its business environment at 3. Access to resources presents hurdles, with Arizona ranking 18th. The state has relatively high business costs, which gives it a rank of 30.
7. Colorado
Claiming the 7th position with a score of 56.44, Colorado has a business environment that earns it a rank of 5. Access to resources is a strength, with Colorado ranking 9th. In terms of business costs, the state needs to improve, with a rank of 31.
8. Texas
With a score of 56.19, Texas, due to its vast size, has a good business environment, coming in at a rank of 4. It has abundant resources, with Texas ranking 12th. In terms of business costs, the state navigates complexities, holding a rank of 34.
9. North Carolina
North Carolina, with a total score of 54.86, is among the best states for a new business. Its business environment earns it a rank of 10. Access to resources is a strength, with North Carolina ranking 20th. In terms of business costs, it holds a rank of 18.
10. Tennessee
Securing the 41st position with a score of 53.32, Tennessee ranks seventh for its business environment. Access to resources poses hurdles, with Tennessee ranking 30th. The business costs are mid-tier, with the state ranking 26.
11. Oklahoma
With a total score of 52.78, Oklahoma ranks 22 in a business environment. Access to resources presents a different story, with Oklahoma ranking 31st. The state has low business costs, earning a rank of 2.
12. South Carolina
Claiming the 12th position with a score of 51.99, South Carolina, known for its historic charm and beautiful coastline, confronts challenges in its business environment, marked at a rank of 12. Access to resources presents hurdles with a rank of 42. In terms of business costs, South Carolina manages well, holding a rank of 10.
13. California
Home to Silicon Valley, with a score of 51.88, California has one of the top ten business environments, earning it a rank of 9. Access to resources is a strength, with California ranking 2nd. It lacks in business costs, with a rank of 48, which plummets its ranking.
14. Arkansas
With a score of 51.69, Arkansas, famous for its natural beauty and Hot Springs National Park, faces hurdles in its business environment at a rank of 13. Access to resources poses another set of challenges, with Arkansas ranking 44th. Regarding business costs, the state manages relatively well, holding a rank of 6.
15. Mississippi
At the 36th position with a total score of 51.52, Mississippi, known for its rich musical heritage, faces challenges in its business environment at a rank of 24. Access to resources presents challenges, with Mississippi ranking 45th. However, it’s the state with the lowest business costs in the US.
16. Kentucky
Kentucky, home to the iconic Kentucky Derby, scored 51.40. It faces challenges in its business environment, securing a rank of 19. Access to resources poses hurdles, marked with a rank of 35. Regarding business costs, Kentucky manages relatively well, holding a rank of 4.
17. Montana
Holding the 17th rank with a score of 51.14, Montana grapples with challenges in its business environment, securing a rank of 16. Access to resources poses another set of challenges, with Montana ranking 40th. In terms of business costs, the state navigates complexities, holding a rank of 7.
18. Alabama
New businesses face hurdles in Alabama, which has a score of 50.53. In terms of its business environment, it has a rank of 17. Access to resources presents challenges, with Alabama ranking 47th. Finally, when we talk about its business costs, the state manages well, earning a rank of 5
19. Delaware
With a total score of 50.44, Delaware faces challenges in its business environment at a rank of 14. Access to resources is a strength, with Delaware ranking 5th. In terms of business costs, the state earned a rank of 43.
20. Indiana
Claiming the 20th position with a score of 50.27, the state of Indiana faces significant challenges in its business environment, securing a rank of 26. Access to resources presents hurdles with a rank of 29. When it comes to business costs, Indiana manages relatively well, holding a rank of 8.
21. Washington
Having an overall score of 49.48 when starting a new business, Washington faces hurdles at a rank of 20 in its business environment. Access to resources is a strength, with Washington ranking 4th since it is one of the country’s biggest lumber and plywood producers. In terms of business costs, the state has a rank of 41.
22. Illinois
With a total score of 49.03, Illinois faces challenges in its business environment, ranking 37. Access to resources presents a different story, with Illinois ranking 3rd, showcasing plenty of opportunities in this state. In terms of business costs, the state faces complexities, earning a rank of 36.
23. Wyoming
Nestled among stunning landscapes, Wyoming claims the 23rd position with a score of 48.32. The state confronts challenges in its business environment, securing a rank of 25. Wyoming faces hurdles in accessing resources, marked with a rank of 27. Regarding business costs, Wyoming navigates problems, holding a rank of 23.
24. South Dakota
Known for Mount Rushmore, South Dakota has a score of 48.21. There are several problems plaguing the state with challenges in the business environment (Rank: 42) and access to resources (Rank: 36). However, it manages its business costs well, with a rank of 3 in all of the US.
25. Michigan
Michigan has a score of 48.09 when starting a new venture here. It faces hurdles in its business environment, marked at a rank of 29. The state needs to manage resource access better, with a rank of 23. And business costs present another set of challenges, holding a rank of 19.
26. Ohio
Having an overall total score of 46.80, Ohio faces challenges in its business environment, securing a rank of 31. Access to resources poses another set of challenges, with Ohio ranking 32nd. In terms of business costs, the state earned a rank of 16.
27. Maine
Claiming the 27th position with a score of 46.00, Maine confronts problems in its business environment, securing a rank of 21. The state deals with limited resource access, ranking 46. Business costs present another layer of challenge, holding a rank of 25.
28. Wisconsin
With a score of 45.94, Wisconsin faces hurdles in its business environment at a rank of 43. Access to resources presents hurdles as well, with Wisconsin ranking 19th. In terms of business costs, the state has a rank of 27.
29. Minnesota
At the 29th position with a total score of 45.92, Minnesota faces problems in its business environment, securing a rank of 34. The state manages access to resources relatively well, with a rank of 13. However, business costs present another set of challenges, holding a rank of 33.
30. Louisiana
With a score of 45.81, Louisiana faces challenges in its business environment, at a rank of 30. Access to resources presents another challenge, with Louisiana ranking 41st. In terms of business costs, the state navigates complexities, earning a rank of 17.
31. New Mexico
Positioned at the 31st spot with a total score of 45.57, New Mexico encounters challenges in its business environment, securing a rank of 35. Furthermore, the state faces significant hurdles in accessing resources, earning a rank of 49. New Mexico is reasonably cheap with respect to business costs, with a challenging rank of 9.
32. Iowa
Iowa, claiming the 32nd position with a score of 45.39, confronts challenges in its business environment with a rank of 46. Access to resources stands at 28, while business costs hold a rank of 15, adding layers to the state’s business dynamics.
33. Kansas
In the heart of the Midwest, Kansas grapples with challenges with a score of 45.36. Its business environment ranking is 41, while access to resources presents another challenge with a rank of 38. Business costs stand at 12, showcasing a complex business landscape.
34. Virginia
With historical significance and modern influence, Virginia scored 45.01, contending challenges in its business environment with a rank of 23. Access to resources stands at 17. In contrast, business costs present a formidable rank of 37.
35. Nebraska
With the largest mammoth fossil in the world, Nebraska secures the 35th place with a score of 44.69. The state faces hurdles in its business environment, marked at 39, while access to resources ranks 34. Business costs present a challenge with a rank of 24.
36. Massachusetts
In the heart of innovation, Massachusetts, claiming the 36th position with a score of 44.10, grapples with challenges in its business environment, securing a rank of 33. Access to resources stands at eight, while navigating business costs proves demanding, with a rank of 44.
37. Oregon
Home to Crater Lake, Oregon, with a score of 43.97, faces significant challenges in terms of business costs with a rank of 39. Apart from this, its business environment ranking is 18, and its access to resources rank is 26.
38. New York
With an overall score of 43.76, the state of New York, a lively American metropolis, faces challenges in the business environment with a rank of 28, access to resources with a rank of 6, and business costs with a rank of 49.
39. Vermont
Securing the 39th position with a score of 43.36, Vermont faces hurdles in business environment, resource access, and business costs, with respective ranks of 45, 14, and 32.
40. North Dakota
North Dakota navigates challenges in a business environment (Rank: 32), access to resources (Rank: 48), and business costs (Rank: 22). With a score of 43.06 overall, it is not ideal to start a new venture here.
41. Missouri
Positioned 41st with a total score of 43.06, Missouri faces obstacles in the business environment, ranking 47; challenges accessing resources, ranking 39; and navigates issues related to business costs with a rank of 20. Despite these hurdles, the state offers opportunities for improvement.
42. Hawaii
Securing the 42nd position with a score of 41.88, Hawaii grapples with challenges in the business environment (Rank: 15), access to resources (Rank: 43), and business costs (Rank: 42).
43. Pennsylvania
Pennsylvania has an overall score of 40.55 since it confronts challenges in the business environment, with a rank of 44. Regarding resource access, it ranks 22nd, and business costs rank 38.
44. New Jersey
With an overall score of 40.54, New Jersey stands as one of the worst places to start a business confronting challenges in the business environment, with a rank of 38. Though there’s a lot of access to resources, ranking 7, regarding business costs, it’s the worst state with a rank of 50.
45. New Hampshire
New Hampshire has an overall score of 40.46 in the US. This is due to its overall poor rank in the business environment (Rank: 40), access to resources (Rank: 37), and business costs (Rank: 35).
46. West Virginia
Claiming the fourty sixth spot with a score of 38.25, West Virginia has lower business costs with a rank of thirteen. However, its ranking dropped due to being the worst regarding resources, with a rank of fifty. The business environment ranking is also very low at 48, making it a wrong choice for a startup.
47. Maryland
At the 47th position with a total score of 38.03, Maryland is not an ideal place for starting a new business as it contends with challenges in a business environment (Rank: 27), access to resources (Rank: 24), and business costs (Rank: 47).
48. Alaska
Alaska holds the 48th rank with a score of 36.52. Alaska navigates difficulties in its business environment, which has a rank of 36, access to resources with a rank of 33, and business costs with a rank of 45.
49. Connecticut
With a score of 35.61, Connecticut claims the second-worst spot. Its business environment rank is 49, access to resources rank is 10, and business costs rank is 46. While resources seem abundant, they have high costs and a poor business environment that supersedes them.
50. Rhode Island
Rhode Island is the worst state to start a new business in, with a total score of 35.55. Rhode Island faces considerable challenges in its business environment (Rank: 50), access to resources (Rank: 21), and business costs (Rank: 40).
