10 Best States To Start A Business [2021]

Advertiser Disclosure

Advertiser Disclosure

The Wealth Gang team writes about financial information, passive income ideas, apps, programs, cash management tools and other wealth gadgets that we think you might want to use or learn more about. Sometimes, we write about products, services or items that might be associated with affiliate partnerships. In these instances, we will earn a small percentage of the revenue from sales. There is, of course, no cost to you.

Thank you for all your support! Without you, we could not keep this site running. Gang Gang!

best states to start a new business

Looking to start a business from scratch? You’re not alone.

Even during a global pandemic, the number of entrepreneurs grew exponentially. In the third quarter of 2020, the U.S. Census Bureau’s records of business applications showed a 77.4% increase over the second quarter of 2020.

Compared to 2019, new business applications were nearly 38% higher last year.

The knowledge of knowing how to run and grow your business but knowing where to start a business is equally important.

As with most businesses, it’s location, location, location.

WalletHub recently released a report on the best – and worst – states to start a new business.

“Choosing the right state for a business is therefore crucial to its success.

A state that provides the ideal conditions for business creation — access to cash, skilled workers and affordable office space, for instance — can help new ventures not only take off but also thrive.

In this study, WalletHub compared the 50 states across 28 key indicators of startup success to determine the most fertile grounds in which to launch and grow an enterprise.”

Here’s a breakdown of the best states to start a new business and the ten states to think long and hard about starting a business in.

BEST STATES TO START A BUSINESS IN 2021

1. Texas
2. Georgia
3. California
4. Florida
5. Idaho
6. Utah
7. Colorado
8. North Dakota
9. North Carolina
10. Massachusetts

WORST STATES TO START A BUSINESS 2021

Here are the worst states to start a business in 2021, according to WalletHub’s data-crunching.

41. Virginia
42. Delaware
43. Pennsylvania
44. Missouri
45. Alaska
46. Wyoming
47. West Virginia
48. Rhode Island
49. Connecticut
50. New Jersey

Here’s how each state stacked up against the others.

  • Iowa has the cheapest average annual rent for office space, $12.08 per square foot, which is 2.2 times cheaper than in New York, the state with the most expensive at $26.66 per square foot.
  • Mississippi has the lowest labor costs (median annual income), $45,081, which is 1.9 times lower than in Maryland, the state with the highest at $84,805.
  • Massachusetts has the highest share of college-educated population, 43.70 percent, which is 2.1 times higher than in West Virginia, the state with the lowest at 20.60 percent.
  • Wyoming has the most startups per 100,000 residents, 214.10, which is 3.2 times more than in West Virginia, the state with the fewest at 67.13.

To view the full report and your state’s rank, check out this link.

Author
Chris Illuminati

Chris Illuminati is the author of five books and has written about personal finance, wealth, debt management, and entrepreneurship for numerous outlets including Wise Bread, Grow or Die, and Bankrate.

Current Top Offers

Earn an unlimited 1.5% back in Bitcoin on every purchase with the BlockFi Rewards Visa® Signature Credit Card.

Invest spare change easily. Get $5 when you sign up for Acorns.

fundrise logo

Invest in Commercial Real Estate With As Little As $10

Put your crypto to work. Get up to a $250 crypto bonus with a transfer of $100 or more in crypto.

m1 finance logo

Get a $50 bonus for creating and funding a new account