It’s never easy to start a business. Twenty-one percent of all start-ups do not survive past the first year, says the Bureau of Labor Statistics. About half do not make it to year five.
Conditions are even more challenging when the labor market is tight or inflation is at elevated levels. Some states have governments at the local and state levels that are not business-friendly, piling on regulations, restrictions, and high costs. The most attractive states have low business taxes, a business-friendly environment, available and reliable workers, access to capital and financing, a strong economy, and reasonably priced real estate.
Of course, a state’s economic policies often significantly affect the creation of businesses and how well they perform after launch.
WalletHub has released its “Best & Worst States to Start a Business” in 2026. It uses 25 key indicators to put together its list. They also use three dimensions: 1) Business Environment, 2) Access to Resources, and 3) Business Costs. Then they determine each state’s weighted average.
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Not surprisingly, Florida was chosen as the best state for starting a business. WalletHub states that Florida boasts the third-most start-ups per capita and the highest percentage of adults who engage in entrepreneurship. The number of small businesses in the state grew by nearly 16% between 2017 and 2023, the fifth-highest percentage in the country.
There are plenty of good reasons why so many people start businesses in Florida, including its 15th-lowest corporate tax rate.
Given the prevalence of retirees in Florida, you might assume the labor force is dwindling, but the opposite is true. In fact, the working-age population (age 16-64) is growing faster in Florida than in all but five other states. Plus, Florida has the third-highest percentage of workers who are enthusiastic and committed to their work.
The second and third-ranked states were Utah and Texas. The worst state was Rhode Island.
Other stories you may want to read:
- John R. Smith: Florida Net Migration Trends Are On the Move - March 16, 2026
- John R. Smith: Diversity Has Two Faces, and a Downside - March 11, 2026
- John R. Smith: How Close Is Your Thinking to the Average Florida Voter? - March 2, 2026