2024’s Best & Worst States for Startups Revealed

Guide to Choosing the Best Business Location for Success

Launching a business is a thrilling venture, but your location can significantly impact your success. Forbes Advisor analyzed 18 key metrics across five categories—business costs, business climate, financial accessibility, economy, and workforce—to rank the best and worst states for starting a business in 2024.

Here’s what you need to know:

Key Takeaways From the Rankings

1. Best State for Startups: North Dakota tops the list for 2024, offering a strong business climate, low startup costs, and ample funding opportunities.
2. Worst State for Startups: Vermont ranks last due to high startup costs, challenging business conditions, and limited opportunities.
3. Business Survival Rates: California excels with the highest business survival rate (81.5%), while Washington struggles with the lowest (59.2%).
4. Registration Costs: Kentucky offers the cheapest business registration fee at $40, while Massachusetts has the highest at $500.
5. Workforce Potential: Massachusetts leads with 46.6% of its workforce holding degrees. Colorado boasts the largest labor force (67.4%), offering entrepreneurs ample talent.

The Best States to Start a Business in 2024

1. North Dakota

Why It Tops the List: North Dakota boasts a low LLC formation fee ($135), a high business survival rate (77%), and a cost of living index below the national average (0.94). With 64% of its population in the working-age bracket, it offers a strong labor market for new ventures.

• Scaled Score: 100/100

2. Indiana

Business-Friendly Features: An LLC fee of $100 and robust funding opportunities averaging $24,502 per small business make Indiana a haven for startups. A low cost of living index (0.91) further boosts its appeal.

• Scaled Score: 98/100

3. Arkansas

Top Perks: Arkansas combines an ultra-low LLC formation fee ($45) with generous funding ($23,463 per business). With a cost of living index of 0.89, it’s among the most affordable states for entrepreneurs.

• Scaled Score: 93/100

4. South Dakota

Key Strengths: An LLC fee of $150 and average funding of $32,477 per business set South Dakota apart. Its cost of living index (0.92) and a 74% business survival rate ensure economic and operational stability.

• Scaled Score: 85/100

5. North Carolina

Balanced Benefits: Affordable LLC fees ($125), funding opportunities ($22,019 per business), and a high business survival rate (77%) make North Carolina a solid choice for startups.

• Scaled Score: 84/100

The Worst State to Start a Business in 2024

Vermont ranks at the bottom due to high startup costs, unfavorable business conditions, and limited financial accessibility. Founders may face significant challenges here.

Choosing the Right Business Location

Entrepreneurs should weigh these factors when choosing a location:

• Startup Costs: LLC formation fees, taxes, and cost of living impact your budget.
• Economic Climate: A state’s business survival rate and GDP per capita reflect its growth potential.
• Workforce Availability: An educated and accessible labor market is vital for scaling operations.
• Financial Accessibility: Funding opportunities can make or break your startup’s early days.