Best and Worst States to start a business

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Scott Evans

Running your own business can have many benefits including financial independence, control over your schedule, and for some can even create a lasting legacy. But starting a business is difficult and according to the U.S. Bureau of Labor Statistics, 48% of businesses fail in the first 5 years.

With that in mind, Self Storage company Pink Storage compared all 50 states across 17 key metrics to determine the best and worst States in America to start a business. Our data ranges from Corporate Tax rates, business funding available, and sales lost due to shoplifting.

Main Findings

All columns in the table reflect the relative rank of that state, a rank of 100 represents the best state for that category. For example, Minnesota scoring 100 in business survival rates meant that businesses had the highest chance of surviving over 10 years in Minnesota compared to anywhere else.

States with the most expensive filling fees

  • Massachusetts ($500)
  • Tennessee ($300), Texas ($300)
  • Alaska ($250)
  • Alabama ($225)
  • New York ($200), Washington ($200)

States with the most affordable filling fees.

  • Connecticut ($12)
  • Montana ($35)
  • Kentucky ($40)
  • Arkansas ($45)
  • Arizona, Colorado, Hawaii, Iowa, Michigan, Mississippi, Missouri, New Mexico ($50)

States with the highest sales lost to shoplifting (per capita)

  • Hawaii ($2,373.80)
  • New Hampshire ($405.51)
  • Wyoming ($403.64)
  • Vermont ($383.39)
  • South Dakota ($380.97)

States with the lowest sales lost to shoplifting (per capita)

  • North Carolina ($215.74)
  • Arizona ($260.01)
  • Texas ($253.55)
  • Utah ($266.94)
  • South Carolina ($270.45)

States with the most available lending for businesses under $1m in revenue.

  • California ($11.7 Billion)
  • Texas ($9.5 Billion)
  • Florida ($7.1 Billion)
  • New York ($5.1 Billion)
  • Illinois ($4.3 Billion)

States with the least available lending for businesses under $1m in revenue.

  • Vermont ($188 Million)
  • Wyoming ($227.4 Million)
  • Alaska ($228.7 Million)
  • Delaware ($301.6 Million)
  • Rhode Island ($356.6 Million)

States with the fastest broadband speeds (median download speed)

  • Illinois (138.89 Mbps)
  • North Dakota (129.73 Mbps)
  • Rhode Island (129.5 Mbps)
  • Minnesota (128.22 Mbps)
  • Nevada (125.54 Mbps)

States with the slowest broadband speeds (median download speed)

  • Vermont (42.29 Mbps)
  • Maine (44.11 Mbps)
  • Alaska (45.08 Mbps)
  • Wyoming (48.65 Mbps)
  • Mississippi (49.21 Mbps)

States with the highest business survival rates (10-year period)

  • Minnesota (44.1%)
  • Iowa (43.1%)
  • Massachusetts (42%)
  • Alaska, Indiana (41.9%)
  • South Dakota (40.8%)

States with the lowest business survival rates (10-year period)

  • Virginia (32.3%)
  • Nebraska (33.3%)
  • Missouri (34%)
  • Connecticut (34.4%)
  • New Mexico (34.6%)

States that worked the most hours (per week)

  • Louisiana (44.3)
  • Texas (43.6)
  • Tennessee (42.3)
  • Michigan (42.1)
  • Arizona (42)

States that worked the least hours (per week)

  • Alaska (31.3)
  • New Mexico (35.9)
  • Montana (36.8)
  • New Hampshire (37.2)
  • Vermont (37.6)

States with the highest high school graduation rates

  • Massachusetts (96.10%)
  • Pennsylvania (95.89%)
  • Vermont (94.55%)
  • Maine (94.53%)
  • New Hampshire (94.44%)

States with the lowest high school graduation rates

  • California (84.45%)
  • Texas (85.39%)
  • Mississippi (86.49%)
  • Louisiana (86.68%)
  • Nevada (87.16%)

Scott Evans Owner of Pink Storage comments on the findings:

"Building and running a business is hard especially long term, knowing the best and worst States to start a business may give entrepreneurs more information that can be used to make informed decisions."

"This study has identified regions within the U.S. with favourable economic conditions and access to essential resources. By looking at these factors, entrepreneurs can choose a State that enhances their chances for success. On the other hand, being aware of States with less favourable conditions can help businesses anticipate potential challenges that lay ahead."

Methodology

To determine the best and worst states in America, Pink Storage compared the 50 states across three different categories: 1) Business Costs, 2) Business Climate, and 3) Workforce.

We evaluated the 3 categories using 17 key metrics that were equally weighted. These metrics included: Corporate tax rates, national minimum wage, filling fees, annual filling fees, cost of shoplifting, return fraud, business finance available, broadband speeds, 10-year business survival rates, small business growth, startups per capita, cost of living, average commute times, average hours worked, childcare costs, unemployment rate and high school graduation rates.

Finally, we determined each state's weighted average across all metrics to calculate its overall score and used these scores to rank-order our sample.

Data used to create this ranking were collected from the U.S. Census Bureau, Bureau of Labor Statistics, Tax Foundation, U.S. Department of Labour, U.S. Small Business Administration Office of Advocacy, Speedtest.net, U.S. Chamber of Commerce, Redfin, Zillow and the Economic Policy Institute.

Data is correct as of 11/06/2024

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