With over 20% of new businesses failing within one year and inflation making entrepreneurship even more difficult, the personal-finance company WalletHub released its report on 2026’s Best & Worst States to Start a Business.
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.
The #1 state to start a business was here in Florida.
Here’s how WalletHub ranked Florida first.
5th – Avg. Growth in Number of Small Businesses
17th – Labor Costs
13th – Availability of Human Capital
18th – Avg. Length of Work Week (in Hours)
25th – Cost of Living
One of the main reasons why businesses chose Florida was because there was zero income tax rate. WalletHub says this attracts individual investors.
Also, the ecosystem with the talent pool available.
WalletHub said with the current high cost of living, around half of all new businesses don’t survive five years.
“So, it’s crucial to establish your business in a state that will maximize your chances of success. The best states have low corporate tax rates, strong economies, an abundance of reliable workers, easy access to financing and affordable real estate,” said Chip Lupo, WalletHub Analyst.
Besides being the best state for starting a business in 2026, WalletHubs data showed Florida is the third-most startups 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, including the fact that it has the 15th-lowest corporate taxes.
In addition, Florida’s working-age population (age 16-64) is growing faster than in all but five other states, and the state has the third-highest percentage of workers who say they are enthusiastic about and committed to their work.
