Are you dreaming of opening a café that serves gourmet sandwiches? Perhaps you picture yourself running a boutique dog grooming service or a photography studio. These are just a few ideas on the endless list of possibilities for small businesses. At LLC Attorney, we understand that deciding on the type of business you want to open is just the first step. Another important consideration is choosing the right location. Unsurprisingly, some states are more conducive to small business success than others. Discover which states are among the most popular for starting small businesses.
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The Top Five States for Small Business Startups
The following states rank among the highest on our list due to the many small businesses opening per 100,000 residents.
1. Wyoming at 586.6 small businesses
Having the lowest population in the United States has not stopped Wyoming from attracting new business owners. One of the main reasons for its high ranking on our list is it has no corporate or personal state income tax. The less money that goes to taxes, the more owners can invest in their growing business. In addition, the state has many grants and loans available to startups. Low startup costs also contribute to attracting an increasing number of entrepreneurs to the Cowboy State.
2. Delaware at 324.6 small businesses
Like Wyoming, Delaware’s high ranking has much to do with tax guidelines that benefit businesses. It is known for its low corporate income tax and lack of sales and investment income taxes. Delaware also boasts a swift incorporation process, which appeals to business owners in every industry.
3. Montana at 229.8 small businesses
The Treasure State shares some commonalities with Wyoming and Delaware that can prove irresistible to those with small business startups. It has no sales tax and offers incentives for up-and-coming businesses depending on their industry and size. Also, a program has been implemented to provide Red Tape Relief to allow businesses the opportunity to flourish. This state also has a reputation for a strong community of entrepreneurs, providing new owners with a wealth of support and guidance.
4. Utah at 201.7 small businesses
Starting a new business in Utah is attractive to a growing number of entrepreneurs because it’s one of the easiest states to procure a loan. Furthermore, it has a flat corporate tax rate of 4.55%. Even with its steady population growth, Utah has a low unemployment rate of 3.5%.Growing businesses enjoy a plentiful supply of talented, motivated workers. No wonder it’s called the Beehive State!
5. Idaho at 198.0 small businesses
Low corporate taxes and a variety of resources available for financial assistance are two of the main reasons why Idaho is such a small business-friendly state. It’s one of the fastest-growing states in the country, which has led to a steadily expanding number of available workers. Mix in its burgeoning tourism and technology industries, and it’s easy to see why Idaho boasts so many small business startups.
Four Key Questions to Consider Before Launching a Small Business
Now that you know the best places to start a business, you probably want to get the ball rolling. But before charging ahead to fill out that business application, it’s wise to ask yourself a few questions. The answers to these questions can help you brainstorm every aspect of your business so you’re ready to hit the ground running.
1. Who would be interested in your product or service?
Starting a business with a product or service that appeals to a wide demographic effectively increases your odds of success. As your company builds a foundation of loyal customers, you can tweak and improve your products or services to expand that base.
2. How many workers should you hire?
The answer to this question depends on your small business's size and the labor required to make your products or deliver your services. The goal is to hire enough workers to create an excellent product without putting strain on your payroll.
3. What can you do differently from your competitors?
Studying competitors in your industry is essential if you want your business to succeed. Pay close attention to how your products and services differ from the competition. Look at the customer reviews of your competitors. This information can shed light on what people like and don’t like in your industry. You want to do everything possible to make your small business stand out.
4. How will you market your product or service?
Spend time thinking of ways to spread the word about your products or services. Online ads, free samples, flash sales, and special discounts are all solid ideas. Sending out products to influencers on social media is another way to attract attention to your small business. If the influencer likes what you offer, you benefit from access to their audience.
Regardless of the industry you’re passionate about, our expert team can guide you through forming an LLCand help you realize your dream of owning a small business.
The States Opening the Most New Small Businesses
| State | Small Business Applications in 2024 | Small Businesses That Will Form Within Four or Eight Quarters From 2024 Application | New Small Businesses Opening per 100,000 State Residents | |
|---|---|---|---|---|
| 1 | Wyoming | 54,241 | 3,426 | 586.6 |
| 2 | Delaware | 46,369 | 3,349 | 324.6 |
| 3 | Montana | 25,170 | 2,603 | 229.8 |
| 4 | Utah | 63,937 | 6,893 | 201.7 |
| 5 | Idaho | 29,194 | 3,890 | 198.0 |
| 6 | Florida | 549,488 | 42,471 | 187.8 |
| 7 | Nevada | 56,841 | 5,617 | 175.9 |
| 8 | Colorado | 113,189 | 9,832 | 167.3 |
| 9 | Washington | 93,243 | 12,942 | 165.6 |
| 10 | California | 384,813 | 63,421 | 162.8 |
| 11 | Oregon | 52,731 | 6,824 | 161.2 |
| 12 | South Dakota | 10,734 | 1,349 | 146.7 |
| 13 | Alaska | 8,619 | 1,070 | 145.9 |
| 14 | Texas | 455,085 | 44,183 | 144.8 |
| 15 | Maine | 13,135 | 2,002 | 143.4 |
| 16 | New York | 212,062 | 27,370 | 139.8 |
| 17 | North Carolina | 150,715 | 14,649 | 135.2 |
| 18 | New Hampshire | 14,993 | 1,871 | 133.4 |
| 19 | North Dakota | 7,942 | 1,045 | 133.3 |
| 20 | Arizona | 114,923 | 9,852 | 132.6 |
| 21 | Georgia | 225,336 | 14,511 | 131.6 |
| 22 | Rhode Island | 10,186 | 1,430 | 130.5 |
| 23 | New Jersey | 139,218 | 11,916 | 128.3 |
| 24 | Massachusetts | 61,048 | 8,937 | 127.6 |
| 25 | Nebraska | 19,630 | 2,510 | 126.9 |
| 26 | Vermont | 6,856 | 793 | 122.5 |
| 27 | South Carolina | 83,109 | 6,538 | 121.7 |
| 28 | Missouri | 81,281 | 7,152 | 115.4 |
| 29 | Virginia | 117,367 | 9,813 | 112.6 |
| 30 | Minnesota | 62,391 | 6,421 | 111.9 |
| 31 | Illinois | 140,420 | 13,729 | 109.4 |
| 32 | Tennessee | 83,396 | 7,711 | 108.2 |
| 33 | Kansas | 29,722 | 3,166 | 107.7 |
| 34 | Indiana | 83,991 | 7,256 | 105.7 |
| 35 | New Mexico | 32,310 | 2,228 | 105.4 |
| 36 | Oklahoma | 50,739 | 4,266 | 105.2 |
| 37 | Connecticut | 43,901 | 3,724 | 103.0 |
| 38 | Iowa | 29,843 | 3,298 | 102.8 |
| 39 | Arkansas | 34,136 | 3,130 | 102.0 |
| 40 | Alabama | 61,294 | 4,846 | 94.9 |
| 41 | Pennsylvania | 133,986 | 12,170 | 93.9 |
| 42 | Maryland | 88,765 | 5,788 | 93.7 |
| 43 | Kentucky | 51,059 | 4,180 | 92.4 |
| 44 | Michigan | 127,131 | 8,983 | 89.5 |
| 45 | Wisconsin | 58,374 | 5,231 | 88.5 |
| 46 | Mississippi | 44,359 | 2,540 | 86.4 |
| 47 | Ohio | 137,253 | 9,990 | 84.8 |
| 48 | Hawaii | 16,677 | 1,146 | 79.9 |
| 49 | Louisiana | 65,464 | 3,629 | 79.3 |
| 50 | West Virginia | 14,236 | 1,259 | 71.1 |
The number of business applications in 2024 excludes applications for new corporations. However, due to limited data available from the Census, the number of small businesses that will form within the next four to eight quarters does include a small portion of corporate business applications. Of the 5.21 million business applications received in the U.S. in 2024, 88.2% were for small businesses.
Source:
U.S. Census Bureau’s Business Formation Statistics: https://www.census.gov/econ/bfs/current/index.html
