Best States To Start A Business

Total Score
Business Environment
Cost of Doing Business
Funding & Resource Availability
Total 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.

By Region

Alabama

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Alabama

Metric

Value

Rank

Total Score

55.5

#30

Business Environment

26.0

#39

Cost of Doing Business

19.7

#23

Funding & Resource Availability

9.8

#22

Alaska

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Alaska

Metric

Value

Rank

Total Score

50.2

#43

Business Environment

25.1

#44

Cost of Doing Business

17.6

#36

Funding & Resource Availability

7.6

#43

Arizona

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Arizona

Metric

Value

Rank

Total Score

60.5

#13

Business Environment

29.0

#23

Cost of Doing Business

21.2

#13

Funding & Resource Availability

10.4

#18

Arkansas

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Arkansas

Metric

Value

Rank

Total Score

53.9

#38

Business Environment

24.8

#45

Cost of Doing Business

19.9

#22

Funding & Resource Availability

9.1

#29

California

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California

Metric

Value

Rank

Total Score

57.8

#25

Business Environment

35.6

#2

Cost of Doing Business

10.9

#49

Funding & Resource Availability

11.3

#10

Colorado

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Colorado

Metric

Value

Rank

Total Score

61.3

#9

Business Environment

32.2

#7

Cost of Doing Business

17.6

#35

Funding & Resource Availability

11.5

#8

Connecticut

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Connecticut

Metric

Value

Rank

Total Score

48.3

#48

Business Environment

27.2

#33

Cost of Doing Business

13.5

#47

Funding & Resource Availability

7.6

#44

Delaware

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Delaware

Metric

Value

Rank

Total Score

55.5

#31

Business Environment

28.0

#30

Cost of Doing Business

16.0

#40

Funding & Resource Availability

11.5

#9

Florida

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Florida

Metric

Value

Rank

Total Score

65.7

#2

Business Environment

33.9

#4

Cost of Doing Business

18.1

#31

Funding & Resource Availability

13.7

#2

Georgia

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Georgia

Metric

Value

Rank

Total Score

62.8

#7

Business Environment

29.6

#16

Cost of Doing Business

20.3

#19

Funding & Resource Availability

13.0

#3

Hawaii

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Hawaii

Metric

Value

Rank

Total Score

46.5

#49

Business Environment

26.1

#38

Cost of Doing Business

14.0

#44

Funding & Resource Availability

6.4

#49

Idaho

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Idaho

Metric

Value

Rank

Total Score

60.5

#14

Business Environment

30.8

#10

Cost of Doing Business

20.3

#20

Funding & Resource Availability

9.5

#24

Illinois

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Illinois

Metric

Value

Rank

Total Score

52.6

#40

Business Environment

30.0

#11

Cost of Doing Business

14.1

#43

Funding & Resource Availability

8.5

#36

Indiana

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Indiana

Metric

Value

Rank

Total Score

61.0

#10

Business Environment

28.3

#27

Cost of Doing Business

21.0

#14

Funding & Resource Availability

11.7

#6

Iowa

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Iowa

Metric

Value

Rank

Total Score

57.4

#26

Business Environment

26.5

#37

Cost of Doing Business

22.3

#8

Funding & Resource Availability

8.5

#35

Kansas

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Kansas

Metric

Value

Rank

Total Score

54.4

#35

Business Environment

24.5

#48

Cost of Doing Business

18.6

#29

Funding & Resource Availability

11.2

#12

Kentucky

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Kentucky

Metric

Value

Rank

Total Score

58.8

#23

Business Environment

28.4

#25

Cost of Doing Business

21.9

#10

Funding & Resource Availability

8.5

#34

Louisiana

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Louisiana

Metric

Value

Rank

Total Score

56.9

#29

Business Environment

28.4

#26

Cost of Doing Business

20.4

#18

Funding & Resource Availability

8.0

#40

Maine

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Maine

Metric

Value

Rank

Total Score

49.5

#45

Business Environment

24.1

#49

Cost of Doing Business

18.5

#30

Funding & Resource Availability

7.0

#47

Maryland

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Maryland

Metric

Value

Rank

Total Score

49.5

#44

Business Environment

25.7

#41

Cost of Doing Business

15.0

#42

Funding & Resource Availability

8.8

#33

Massachusetts

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Massachusetts

Metric

Value

Rank

Total Score

55.1

#33

Business Environment

31.9

#8

Cost of Doing Business

10.4

#50

Funding & Resource Availability

12.8

#4

Michigan

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Michigan

Metric

Value

Rank

Total Score

59.4

#20

Business Environment

29.4

#18

Cost of Doing Business

20.6

#17

Funding & Resource Availability

9.4

#26

Minnesota

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Minnesota

Metric

Value

Rank

Total Score

56.9

#27

Business Environment

29.9

#12

Cost of Doing Business

17.8

#33

Funding & Resource Availability

9.2

#28

Mississippi

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Mississippi

Metric

Value

Rank

Total Score

60.5

#15

Business Environment

28.3

#28

Cost of Doing Business

22.3

#7

Funding & Resource Availability

9.9

#21

Missouri

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Missouri

Metric

Value

Rank

Total Score

59.1

#22

Business Environment

25.1

#42

Cost of Doing Business

23.1

#4

Funding & Resource Availability

10.8

#16

Montana

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Montana

Metric

Value

Rank

Total Score

55.1

#34

Business Environment

29.9

#13

Cost of Doing Business

17.3

#37

Funding & Resource Availability

7.9

#42

Nebraska

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Nebraska

Metric

Value

Rank

Total Score

56.9

#28

Business Environment

25.7

#40

Cost of Doing Business

20.9

#16

Funding & Resource Availability

10.3

#19

Nevada

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Nevada

Metric

Value

Rank

Total Score

60.6

#11

Business Environment

29.2

#20

Cost of Doing Business

23.2

#2

Funding & Resource Availability

8.2

#39

New Hampshire

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New Hampshire

Metric

Value

Rank

Total Score

48.7

#47

Business Environment

26.7

#36

Cost of Doing Business

13.6

#45

Funding & Resource Availability

8.4

#38

New Jersey

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New Jersey

Metric

Value

Rank

Total Score

51.0

#42

Business Environment

29.0

#24

Cost of Doing Business

13.5

#46

Funding & Resource Availability

8.5

#37

New Mexico

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New Mexico

Metric

Value

Rank

Total Score

64.0

#3

Business Environment

33.7

#5

Cost of Doing Business

23.1

#3

Funding & Resource Availability

7.2

#45

New York

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New York

Metric

Value

Rank

Total Score

51.4

#41

Business Environment

28.2

#29

Cost of Doing Business

12.5

#48

Funding & Resource Availability

10.7

#17

North Carolina

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North Carolina

Metric

Value

Rank

Total Score

63.3

#5

Business Environment

30.9

#9

Cost of Doing Business

22.7

#6

Funding & Resource Availability

9.7

#23

North Dakota

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North Dakota

Metric

Value

Rank

Total Score

55.3

#32

Business Environment

24.7

#47

Cost of Doing Business

19.6

#24

Funding & Resource Availability

11.1

#14

Ohio

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Ohio

Metric

Value

Rank

Total Score

61.7

#8

Business Environment

27.6

#31

Cost of Doing Business

24.0

#1

Funding & Resource Availability

10.2

#20

Oklahoma

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Oklahoma

Metric

Value

Rank

Total Score

59.8

#18

Business Environment

29.6

#17

Cost of Doing Business

21.0

#15

Funding & Resource Availability

9.3

#27

Oregon

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Oregon

Metric

Value

Rank

Total Score

63.9

#4

Business Environment

38.0

#1

Cost of Doing Business

18.8

#28

Funding & Resource Availability

7.1

#46

Pennsylvania

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Pennsylvania

Metric

Value

Rank

Total Score

54.2

#36

Business Environment

29.3

#19

Cost of Doing Business

16.0

#41

Funding & Resource Availability

8.8

#32

Rhode Island

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Rhode Island

Metric

Value

Rank

Total Score

43.3

#50

Business Environment

20.3

#50

Cost of Doing Business

16.3

#38

Funding & Resource Availability

6.6

#48

South Carolina

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South Carolina

Metric

Value

Rank

Total Score

59.8

#19

Business Environment

27.0

#34

Cost of Doing Business

21.8

#11

Funding & Resource Availability

11.0

#15

South Dakota

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South Dakota

Metric

Value

Rank

Total Score

59.9

#17

Business Environment

26.7

#35

Cost of Doing Business

22.2

#9

Funding & Resource Availability

11.1

#13

Tennessee

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Tennessee

Metric

Value

Rank

Total Score

58.4

#24

Business Environment

29.2

#21

Cost of Doing Business

18.1

#32

Funding & Resource Availability

11.2

#11

Texas

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Texas

Metric

Value

Rank

Total Score

70.2

#1

Business Environment

33.1

#6

Cost of Doing Business

23.0

#5

Funding & Resource Availability

14.1

#1

Utah

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Utah

Metric

Value

Rank

Total Score

59.1

#21

Business Environment

29.7

#15

Cost of Doing Business

17.7

#34

Funding & Resource Availability

11.7

#7

Vermont

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Vermont

Metric

Value

Rank

Total Score

48.8

#46

Business Environment

24.8

#46

Cost of Doing Business

16.1

#39

Funding & Resource Availability

8.0

#41

Virginia

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Virginia

Metric

Value

Rank

Total Score

60.5

#12

Business Environment

29.0

#22

Cost of Doing Business

19.0

#27

Funding & Resource Availability

12.5

#5

Washington

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Washington

Metric

Value

Rank

Total Score

60.1

#16

Business Environment

29.7

#14

Cost of Doing Business

21.7

#12

Funding & Resource Availability

8.8

#31

West Virginia

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West Virginia

Metric

Value

Rank

Total Score

53.1

#39

Business Environment

27.3

#32

Cost of Doing Business

19.5

#26

Funding & Resource Availability

6.3

#50

Wisconsin

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Wisconsin

Metric

Value

Rank

Total Score

54.0

#37

Business Environment

25.1

#43

Cost of Doing Business

19.5

#25

Funding & Resource Availability

9.5

#25

Wyoming

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Wyoming

Metric

Value

Rank

Total Score

63.0

#6

Business Environment

34.1

#3

Cost of Doing Business

20.0

#21

Funding & Resource Availability

8.8

#30