Is starting a business on your agenda in 2025? If you don't want to start one of the approximately 20% of businesses that fail within two years, you should consider all the factors that determine success.
And exactly where you start your business is one of the most important pieces of the puzzle.
Related: Starting a Small Business? Here are the states where the probability of survival is highest – and lowest.
According to the U.S. Bureau of Labor Statistics (BLS), business owners who strategically choose the state, city or neighborhood of their business can benefit from different taxes, zoning regulations and licensing requirements.
A new study from WalletHub compared all 50 states across 25 key indicators of startup success — factors like labor costs, availability of human capital and how many hours make up the average workweek — to find out where entrepreneurs can benefit the most.
Related: Want to Start a Small Business? Here are the best states to try (and the ones to avoid).
“It is critical to establish your business in a state that maximizes your chances of success,” says WalletHub analyst Chip Lupo. “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 |
Condition |
Total points |
Rank of the business environment |
Access to resource rank |
Rank of business costs |
|
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 |
02/39 |
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 “Overall Score,” all columns in the table above show the relative rank of that state, with a rank of 1 representing the best conditions for that metric category.