10 Best And Worst States To Start A Business Revealed By New Study

Any number of variables in starting a new business could prove crucial to its success — or failure. The price of leasing an office space, the availability of human capital and accessible financing are all key elements when considering where and how to get a business venture off the ground. A new study weighed these and more key metrics to determine which are the best and worst states to start a business.

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WalletHub published its findings Wednesday and considered three main dimensions in its study: business environment, access to resources and business costs. Within those dimensions, the study considered 20 other relevant metrics. Those included variables like average length of a work week; startups per capita; five-year business survival rate; financing ability; labor costs; corporate taxes; and office space and cost of living affordability, respectively. East state was then graded on a 100-point scale and rank-ordered.

Based on its data, WalletHub determined the best states to start a business overall are:

1. North Dakota
2. Texas
3. Utah
4. Oklahoma
5. Nebraska
6. Florida
7. Colorado
8. Georgia
9. Missouri
10. South Dakota

The worst-ranking states for overall score were:

1. New Jersey
2. New Hampshire
3. Maryland
4. Rhode Island
5. Hawaii
6. Pennsylvania
7. Connecticut
8. Delaware
9. Alabama
10. Arkansas

Not every state that ranked highly overall necessarily also ranked highly in each respective dimension. For example, North Dakota, Alaska and Texas scored highest for the business environment category. Utah, Massachusetts and California ranked highest for access to resources. As for the business costs dimension, Oklahoma, West Virginia and Michigan led the rank.

Scroll over the map to see how each state ranks overall.

For specific metrics like cheapest office spaces, Iowa Maine, and South Dakota came out on top, though South Dakota alone ranked in the top 10 for overall score. Likewise, the most accessible funding could be found in North Dakota, Utah, Iowa, Mississippi and West Virginia, even though only two of those states ranked highest overall. However, as the WalletHub noted in its report, the most common reason a business is likely to fail is: location, location, location.

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“Choosing the right state for a business is therefore crucial to its success,” said the report. “A state that provides the ideal conditions for business creation — access to cash, human capital and affordable office space, for instance — can help new ventures not only take off but also thrive.”