The U.S. States With The Highest Business Survival Rates

Starting a business can be risky, but where you launch it can make all the difference.

A recent study by the franchise matchmaking site Franchise Opportunities reveals just how dramatic those differences can be. Researchers crunched data from the Bureau of Labor Statistics’ Business Employment Dynamics dataset, tracking every business formed in 2019 and seeing which ones were still standing in 2024. Then, business survival rates were calculated by comparing the number of businesses still operating after five years with the number originally launched.

“There are places in America where the odds are stacked against business owners, and it may feel incredibly challenging to survive past five years,” says Thomas Jepsen of Franchise Opportunities. “These rankings give entrepreneurs a clear picture of where the environment is strongest.”

THE STATES WHERE BUSINESSES SURVIVE

West Virginia tops the nation for new business survival, with nearly six in ten ventures (57.6%) formed in 2019 still operating in 2024. Here, 2,663 new businesses were established in 2019, and 1,534 of them are still going strong, giving entrepreneurs a distinct advantage in weathering the turbulence of the first five years.

Connecticut follows closely in second place with a 57.5% survival rate, just 0.1 percentage points behind West Virginia. The Northeast overall showed a strong performance, with Pennsylvania sharing third place alongside Alaska at 56%.

Of the three on the podium, Alaska’s third place win is the most shocking, because despite forming only 1,071 new businesses in 2019 which was one of the lowest totals in the country, more than half survived to 2024. This implies that businesses can remain viable in smaller markets in the long run.

There were also some notable outliers in this study. Washington ranks last nationally, with only 41.1% of its new businesses surviving five years. Missouri and the District of Columbia join the bottom ranks at 43.2% and 44.7%, respectively.

Overall, there seems to be a limited correlation between the number of businesses launched and survival rates. It turns out that high-volume states like California still maintain respectable survival rates, whereas smaller states like Alaska outperform expectations.

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