The 5 best states in America to start a new business — and the 5 worst

Twenty percent of new businesses don’t make it past their first year — and while there’s a variety of factors at play for why, some of it has to do with the states where they set up shop.

WalletHub set out to find the best and worst states to start a business in 2025.

“It’s crucial to establish your business in a state that will maximize your chances of success,” said WalletHub analyst Chip Lupo. “The best states have low corporate tax rates, strong economies, an abundance of reliable workers, easy access to financing and affordable real estate.

“On top of that, you’ll need to make sure you start in a place with an engaged customer base, if you’re operating locally,” Lupo added.

Continue reading to see which states were ranked the best five — and which were ranked the worst five.