Is starting a business on your agenda in 2025? If you don’t want to launch one of the roughly 20% of businesses that fail within two years, you should consider all of the factors that make or break success.
And exactly where you start your business is one of the most essential pieces of the puzzle.
Related: Starting a Small Business? Here Are the States Where It’s Most Likely to Survive — and the Least.
Entrepreneurs who strategically choose their business’s state, city or neighborhood can benefit from different taxes, zoning regulations and licensing requirements, according to the U.S. Bureau of Labor Statistics (BLS).
A new study from WalletHub compared all 50 states across 25 key indicators of startup success — factors like labor costs, the availability of human capital and how many hours make up the average work week — to find out where entrepreneurs stand to gain the most.
Related: Want to Start a Small Business? Here Are the Best States to Try (and the Ones to Avoid).
“It’s crucial to establish your business in a state that will maximize your chances of success,” WalletHub analyst Chip Lupo says. “The best states have low corporate tax rates, strong economies, an abundance of reliable workers, easy access to financing and affordable real estate.”
Check out WalletHub’s full ranking of the best and worst states to start a business in 2025 below:
Overall Rank
State
Total Score
Business Environment Rank
Access to Resources Rank
Business Costs Rank
1
Florida
59.66
1
14
28
2
Georgia
58.62
2
27
16
3
Utah
57.84
11
2
29
4
Texas
56.28
3
12
34
5
Idaho
56.02
8
16
11
6
Oklahoma
55.17
16
28
2
7
Nevada
54.03
13
11
21
8
Colorado
53.98
5
10
31
9
Arizona
53.46
4
36
30
10
Kentucky
53.36
20
22
4
11
Arkansas
53.29
15
26
6
12
Tennessee
53.23
6
30
27
13
South Carolina
53.15
10
35
10
14
Mississippi
52.59
26
37
1
15
North Carolina
52.32
9
32
20
16
Montana
52.08
12
41
8
17
Alabama
52.07
18
39
5
18
California
51.42
7
1
49
19
Indiana
50.22
30
21
7
20
Louisiana
48.76
25
31
17
21
Illinois
48.17
39
3
35
22
Michigan
48.10
33
18
18
23
Maine
48.04
14
44
25
24
Nebraska
47.70
32
19
24
25
Washington
47.59
22
6
41
26
Ohio
47.47
36
23
15
27
New Mexico
47.36
34
38
9
28
South Dakota
47.13
37
47
3
29
Minnesota
46.88
35
9
32
30
Kansas
46.73
41
25
12
31
Wyoming
46.60
21
46
23
32
North Dakota
45.74
23
43
22
33
Massachusetts
45.55
29
4
44
34
Missouri
45.17
46
20
19
35
Wisconsin
45.01
47
15
26
36
Iowa
44.98
45
29
14
37
Delaware
44.78
27
7
43
38
Virginia
43.05
24
34
37
39
Oregon
41.52
31
24
39
40
New York
41.25
40
5
48
41
West Virginia
40.43
48
50
13
42
Vermont
39.91
42
42
33
43
Pennsylvania
39.29
44
33
38
44
Hawaii
39.20
19
49
42
45
New Hampshire
39.02
38
45
36
46
Maryland
38.93
28
17
47
47
Alaska
38.37
17
48
45
48
New Jersey
37.36
43
8
50
49
Connecticut
34.63
49
13
46
50
Rhode Island
33.51
50
40
40
Note: With the exception of “Total Score,” all of the columns in the table above depict the relative rank of that state, where a rank of 1 represents the best conditions for that metric category.
