Recently, WalletHub has released its report on the best and worst states to start a business in 2025. In this study, Florida is ranked as the best state, followed by Georgia, Utah, Texas and Idaho. On the other hand, the states that occupy the last positions on this list are Maryland, Alaska, New Jersey, Connecticut and Rhode Island.
The research is based on 25 metrics including growth in the number of small businesses, startups per capita, average business revenue and the variety of industries. These indicators are crucial to assessing each state's business environment and its potential to foster entrepreneurship.
The Best States
- Florida: This state has proven to be a haven for entrepreneurs thanks to its favorable business climate and absence of personal income taxes.
- Georgia: With affordable costs and a growing economy, Georgia positions itself as an excellent place to start a business.
- Utah: Known for its “Silicon Slopes,” Utah remains a magnet for tech startups.
- Texas: With a robust economy and pro-business environment, Texas continues to attract entrepreneurs from a variety of industries.
- Idaho: This state has become increasingly attractive to small businesses thanks to its favorable policies.
The Worst States
- Maryland: Despite its proximity to Washington DC, Maryland faces significant cost and resource challenges for small businesses.
- Alaska: Although it has abundant natural resources, the high cost of living and remoteness make entrepreneurship difficult.
- New Jersey: With high taxes and a complicated regulatory environment, New Jersey is less attractive to entrepreneurs.
- Connecticut: This state has struggled with a stagnant economy and high operating costs.
- Rhode Island: With a slow business environment, Rhode Island lags behind in terms of startup opportunities.
Opening a business is a significant decision that can impact an entrepreneur's personal and professional life. Florida, with its warm climate, cultural diversity, and economic opportunities, has become one of the most attractive destinations for entrepreneurs. Below, we'll explore some of the key advantages of starting a business in this vibrant state.
1. Favorable Business Climate
Florida is known for its business-friendly environment. The state has implemented policies that promote investment and reduce red tape. The absence of a state personal income tax is a significant draw, allowing business owners to keep more of their profits.
2. Sustained Economic Growth
Florida’s economy has shown steady growth in recent years. Sectors such as tourism, technology, healthcare, and agriculture are booming, providing numerous opportunities for new businesses. This growth is complemented by an increase in population, creating an expanding consumer base.
3. Cultural and Demographic Diversity
Florida is a unique cultural mosaic, with a diverse population that includes residents from multiple backgrounds. This diversity translates into a variety of consumer tastes and preferences, allowing entrepreneurs to develop innovative products and services that cater to different market niches.
4. Access to International Markets
Florida's geographic location, especially cities like Miami, makes it a strategic access point for international trade. Businesspeople can benefit from trade relations with Latin America and other regions of the world. In addition, the state has well-developed ports and airports that facilitate logistics and transportation.
5. Low Cost of Living
While the cost of living varies in different parts of the state, overall, Florida offers a lower cost of living compared to other major states like California or New York. This not only benefits business owners, but also their employees, which can result in a higher quality of life and job satisfaction.
6. Business Support Infrastructure
Florida has a strong support infrastructure for entrepreneurs, including business incubators, accelerators and nonprofit organizations dedicated to fostering entrepreneurship. Additionally, the state's universities and educational institutions offer programs and resources that can help new entrepreneurs acquire necessary skills and knowledge.
7. Tourism and Seasonal Opportunities
Tourism is one of the main sources of income in Florida, with millions of visitors arriving each year. This creates opportunities for businesses in areas such as hospitality, entertainment, retail and services. The seasonal nature of tourism also allows entrepreneurs to adapt their offering throughout the year.
8. Political and Legal Stability
Florida is characterized by a relatively stable political environment that supports business growth. Intellectual property protection and a legal framework that supports business activity are key elements that contribute to a safe investment climate.
