Report: Which States Are The Best And Worst Places To Start A New Business?

Being successful when starting a new business is often determined by location. A report by WalletHub has ranked the best and worst states to start a new venture, giving key insights into what areas of the country offer the best access to financing, human capital, and affordable office spaces.

According to the report, Texas ranks as the top state to start a business followed right behind by Utah, Georgia, and North Dakota. States, where new business owners may struggle, include Pennsylvania, Connecticut, Hawaii, New Hampshire, and New Jersey. At the very bottom of the list as the worst state to start a business is in Rhode Island, the report indicated.

Looking deeper into the study, WalletHub has determined that Iowa has the cheapest office space available with an average rent cost of $12.08 per square foot. This is 2.2 times cheaper than New York, which has the most expensive lease rates for office space at $26.66 per square foot.

For new business owners looking to hire employees, Mississippi may be the best bet as it has the lowest labor costs with an average median annual income of $42,009, Wallet Hub said. The highest average annual income goes to Maryland at $78,916, which is 1.9 times higher than Mississippi, according to the study.

If a new startup is looking for college-educated workers, it may want to try Massachusetts to find qualified employees. The state has the highest population of college-education people at 42.10 percent, the study determined. This 2.1 times higher than West Virginia, which comes in as the state with the lowest population of college-educated people at only 19.90 percent, WalletHub reported.

Businesses that are looking to stand out from the crowd may want to steer clear of North Dakota as the state has the most startups per 100,000 residents at 199.34, according to the study. West Virginia comes in with the fewest startups per 100,000 residents at only 70.23, which is 2.8 times less than North Dakota.

States offering the most access to financing include North Dakota, Utah, Iowa, South Dakota, and Nebraska, according to the report. States with the worst access to financing include Florida, Oregon, California, and Nevada with Arizona ranking as the worst state to get funding for a new business, Wallet Hub said.