With over 20% of new businesses failing within one year and inflation making entrepreneurship even more difficult, the personal-finance company WalletHub today released its report on 2026’s Best & Worst States to Start a Business, as well as expert commentary to showcase the most fertile grounds for planting and growing new ventures.
WalletHub compared the 50 U.S. states across 25 key indicators of startup success. The data set ranges from financing accessibility to labor costs to office-space affordability.
South Dakota ranked 26th in the study.
| Best States to Start a Business | Worst States to Start a Business |
| 1. Florida | 41. New York |
| 2. Utah | 42. New Hampshire |
| 3. Texas | 43. Alaska |
| 4. Oklahoma | 44. West Virginia |
| 5. Idaho | 45. Pennsylvania |
| 6. Mississippi | 46. New Jersey |
| 7. Georgia | 47. Connecticut |
| 8. Indiana | 48. Hawaii |
| 9. Nevada | 49. Maryland |
| 10. California | 50. Rhode Island |
Best vs. Worst
- Iowa has the cheapest average annual rent for office space – 2.2 times cheaper than in New York, where it is most expensive.
- Mississippi has the lowest labor costs (median annual income) – 1.9 times lower than in Maryland, which has the highest.
- Massachusetts has the highest share of the population with a college education two times higher than in West Virginia, which has the lowest.
- Wyoming has the most startups per 100,000 residents – 3.2 times more than in West Virginia, which has the fewest.
To view the full report and your state’s rank, please visit:
https://wallethub.com/edu/best-states-to-start-a-business/36934
