Starting a business is never easy. According to U.S. Bureau of Labor Statistics data, about a fifth of all startups typically don’t survive past year one of operation, and nearly half never make it to their fifth anniversary. That’s without considering the economic damage done by the COVID-19 pandemic, which resulted in 200,000 more permanent business closures than usual within a year of the pandemic’s start.

Outside of the pandemic, there are plenty of other reasons that startups fail, with a “bad location” among the most common. 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.

Alaska finished 45th on the list:

Starting a Business in Alaska (1=Best; 25=Avg.):

  • 21st – Avg. Growth in Number of Small Businesses
  • 47th – Office-Space Affordability
  • 45th – Labor Costs
  • 48th – Cost of Living
  • 31st – COVID-19 Positive Tests in the Past Week per Capita

Best States to Start a Business

 

Overall Rank 

State

Total Score

Business Environment

Access to Resources

Business Costs 

1Texas57.8921232
2Georgia56.9213120
3California56.583148
4Florida55.8451522
5Idaho55.784418
6Utah55.6617431
7Colorado54.159933
8North Dakota54.1261825
9North Carolina54.01102121
10Massachusetts53.8513243
11Oklahoma53.4728331
12Arizona53.4181630
13Maine52.57113218
14Mississippi52.5237252
15Tennessee52.4673916
16South Dakota52.3322345
17Kentucky52.2715464
18New Mexico52.0126289
19South Carolina51.79203613
20Nebraska51.65184012
21Indiana51.55233511
22New York51.3019346
23Hawaii50.8816741
24Michigan50.5934296
25Wisconsin49.55352223
26Montana49.3533447
27Iowa49.22302628
28Washington49.2029542
29Illinois48.8140836
30Minnesota48.45321435
31Alabama47.96245014
32Nevada47.73431929
33Ohio47.33383817
34Louisiana47.00452415
35Maryland46.98121349
36Arkansas46.69414810
37Vermont46.34314727
38New Hampshire45.77144338
39Kansas45.65424519
40Oregon45.56212740
41Virginia45.47253039
42Delaware45.33361044
43Pennsylvania44.52442034
44Missouri43.20473724
45Alaska43.14272345
46Wyoming42.76464226
47West Virginia42.1650493
48Rhode Island41.85481737
49Connecticut41.1349647
50New Jersey41.07391150
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