Certain states are known to be better than others for starting a business because they have a skilled workforce, a conducive business climate, and easy access to capital for business owners. The public authorities in these states also offer a supportive policy framework to help companies thrive. Those looking to establish a startup may benefit from knowing the best states for entrepreneurs and picking a location within them to set up shop.
Virginia
While there are no definitive startup ecosystem rankings by state, Virginia is generally considered the prime location for entrepreneurs to establish and develop businesses of all sizes and types. This state performs well across many business-related parameters, including infrastructure, economy, ease of securing seed capital, workforce, cost of doing business, quality of life, and technology/innovation. Virginia houses the headquarters of multiple major corporations and government agencies like the CIA. This also makes it a suitable location from the perspective of employment prospects for individuals.
Wyoming
This state has shown the most rapid growth in venture capital funding over the last decade. That, by itself, makes it a business-friendly state for new companies. Wyoming also ranks high among states with a strong startup economy because of its well-established networks of existing entrepreneurs, capabilities in high-growth industries, and a well-educated, hustle-heavy workforce.
California
A list of the best states for tech startups would be incomplete without California. The Golden State is revered for its favorable regulatory policies and tax systems that support entrepreneurs instead of draining them dry. It also excels at bringing resources closer to startups and established businesses. Moreover, California’s sheer volume of venture capital is quite commendable.
If there is a downside, it is that entrepreneurs will need to shell out large sums to purchase office spaces in California. The Hollywood state is an expensive yet rewarding zone for startups and fully-grown enterprises. Setting up business operations here may be wise for entrepreneurs with cash to spare.
Florida
Like California, this southern state has low taxes. The corporate tax rates here are among the lowest in the country. What’s more, the state charges zero personal income tax. But low taxes are not the only thing that makes Florida an entrepreneur-friendly state. Florida’s robust economic landscape is also shaped by its pro-growth policies, incentive programs for small businesses, capital programs, and workforce training grants.
Being one of the top states for innovative businesses, Florida attracts enterprises across industries such as aerospace, tourism, and hospitality. Like New York and California, it also has a large and vibrant population and a steady influx of new residents that provide a massive customer base as well as a dynamic workforce.
New York
The city that never sleeps predictably performs well when it comes to pro-entrepreneurship parameters. For many decades now, New York, especially New York City, has been a hub for industries like technology, finance, and media. This is a diverse and opportunity-heavy state with a characteristic hustle culture.
A key factor that makes New York a top state for small business growth is the talent pool available here. The extensive networking opportunities, market size and access, favorable tax environment, access to capital, competitive business climate, favorable cost of living and operating expenses, infrastructure, and regulatory flexibility are the other things that make it one of the entrepreneurship hotspots in the country and the world.
Texas
While the Lone Star State has no corporate or personal income taxes, it does impose heavy gross receipts taxes (for small businesses) and franchise tax (for high-income LLCs). Still, given the incredibly lenient regulatory environment, competitive incentives, and skilled, growing workforce, Texas is one of the best states for launching a startup and diversifying it over the years.
Indiana
Arguably, the biggest positive from an entrepreneurship viewpoint is Indiana’s relatively low cost of living and setting up small businesses. The low cost allows entrepreneurs to stretch their budgets and streamline their resources more intelligently for growth. Indiana’s flexible and relatively stress-free business environment is also something entrepreneurs will appreciate. Additionally, the state has somewhat laid-back tax rates, rules, and business operational regulations.
While different kinds of businesses can flourish in Indiana, supply chain companies have an even better scope for growth. This is because the state connects to major markets through its diversified and highly advanced transportation networks. If all these positives weren’t enough, Indiana is also a hub of agriculture and manufacturing, making it one of the top states for small business growth as well as a large enterprise facilitator.
Apart from these states, some other names make the cut when choosing or ranking the most business-friendly states for new companies. These states are Minnesota, Utah, North Carolina, Georgia, and Ohio, in no particular order. All these states have diversified transportation networks, a hungry and talented workforce, flexible tax rates, a relaxed business regulatory landscape, and supportive governments. Those looking to establish a new business can compare the benefits available in each state and choose one that promises the most opportunity for future growth.
