For those with entrepreneurial dreams, discovering the states with the highest potential for successful businesses is a must.
“Around half of all new businesses don’t survive five years, so the idea of becoming a business owner can be daunting, especially with the current high cost of living,” says Chip Lupo, a WalletHub Analyst. “That’s why it’s crucial to establish your business in a state that will maximize your chances of success.”
Wallethub recently assessed all 50 U.S. states across three dimensions to pinpoint the states that offer the best conditions for successful businesses. They weighed each based on Business Environment (50 points), Access to Resources (25 points), and Business Costs (25 points).
WALLETHUB’S BEST STATES TO START A BUSINESS IN 2025
| Rank | State | Total Score | Business Environment Rank | Access To Resources Rank | Business Costs Rank |
|---|---|---|---|---|---|
| 1 | Florida | 59.66 | 1 | 14 | 28 |
| 2 | Georgia | 58.62 | 2 | 27 | 16 |
| 3 | Utah | 57.84 | 11 | 2 | 29 |
| 4 | Texas | 56.28 | 3 | 12 | 34 |
| 5 | Idaho | 56.02 | 8 | 16 | 11 |
| 6 | Oklahoma | 55.17 | 16 | 28 | 2 |
| 7 | Nevada | 54.03 | 13 | 11 | 21 |
| 8 | Colorado | 53.98 | 5 | 10 | 31 |
| 9 | Arizona | 53.46 | 4 | 36 | 30 |
| 10 | Kentucky | 53.36 | 20 | 22 | 4 |
THE TOP STATE: FLORIDA
It may surprise some that in first place as the best state to start a business in all around was the sunshine state – Florida.
Florida ranked No. 1 overall in the Business Environment category which considers the overall conditions for businesses to thrive, like work week length, employee engagement, small business growth, and industry diversity.
State of Florida – Florida State Gov
Florida’s lowest category was in the business cost category, where they came in No. 28 overall – closer to the middle. This state’s small businesses also grew 16% between 2016 and 2022 – the fourth-highest percentage in the country. Florida also has the third percentage of workers who say they are enthusiastic about and committed to their work, and on top of that, no state income tax if you live in this state.
“In 2025, industries poised for growth include renewable energy, health tech, e-commerce, and artificial intelligence,” says Bert Seither, Manager of Operations at the University of Tampa’s John P. Lowth Entrepreneurship Center. “Florida, for instance, is well-positioned with its diverse economy and burgeoning tech scene, particularly in cities like Miami and Tampa,” he continues.
SECOND PLACE: GEORGIA
Georgia, the Peach State, ranked second-best for starting a business. They had the third-highest entrepreneurship rate in the country and a thriving No. 2 business environment.
This state is extremely pro-business and offers a competitive tax structure, ample funding opportunities, and a talented workforce, making it an ideal location for startups and expanding businesses.
State of Georgia – Smithsonian Magazine
“States with streamlined regulatory processes and robust support systems (e.g., grants, and incubators) are more conducive to fostering new business development,” says Stephanie Black, Associate Professor at Texas A&M University.
IN THIRD: UTAH
Utah, the Beehive State, ranks third-best state for starting a business thanks to ample funding opportunities and a 2% year-over-year employment growth rate.
This strong job growth signals a healthy business environment. Here, business owners also benefit from having the third-lowest average health insurance premium, reducing employee costs.
Utah also shines in tech, being recognized in the Digital States Survey from the Center for Digital Government for its efficient use of technology. This tech-friendly landscape allows entrepreneurs to leverage their skills and access top-notch technology to thrive.
“Technology will see continued growth, including AI related businesses and robotics,” says Daniel E. Goldberg Academic Director of Fox School of Business’s Business Management BBA Program.
State of Utah – sourced from site Government Technology
BOTTOM THREE STATES
In 48th place was New Jersey, a state that has faced challenges such as high taxes and regulatory burdens, which have impacted its business environment. While they placed this low overall, New Jersey offers entrepreneurs a good amount of support, placing No. 8 in Access To Resources.
Just below New Jersey in 49th place was Connecticut. While this state’s strongest category was access to resources (No.13), Connecticut struggles with high costs of living and doing business, which seemingly has deterred entrepreneurs.
In last place at No. 50 was Rhode Island due to its high costs, limited resources, and its static business environment.
Possibly most surprising, with tumultuous rankings across categories, California ranked No. 18 overall. While they had the best access to resources, placing No. 1, they were nearly the worst at No. 49 when it came to affordability in the Business Costs ranking.
