More news businesses fail than become successes. The BLS puts the failure rate at 65% over the first 10 years after a start-up. The reasons for failure range from inadequate capital to poor management, to poor ideas. And, the size of start-ups varies widely. Some are one-person operations. Others have the backing of large venture capital firms and have millions of dollars in the bank on their first day.
It is easier to start businesses in some states than in others. To identify the best state to start a business, 24/7 Wall St. reviewed data from WalletHub, which ranked each state across three key dimensions — business environment, access to resources, and business costs. WalletHub used 28 metrics like average business revenue growth for business environment, human capital availability for access to resources, and office space affordability for business costs. 24/7 Wall St. added seasonally-adjusted estimates for June 2021 unemployment rates from the Bureau of Labor Statistics.
The best state to start a business is the second largest in the U.S. based on population. It is also among the fastest-growing according to new Census data for 2020 when compared to 2010. It has four of the nation’s largest cities, which, based on the same Census data, are growing as fast as the state. These are Dallas, Houston, San Antonio, and Austin.
Based on our analysis, the best state for business is Texas. Its overall score is 57.89. Additionally:
> Best ranking feature for business: Business Environment
> Unemployment rate in June 2021: 6.5% — 13th highest
The population of Texas grew by 15.9% between 2010 and 2020 to 29,145,505. The only state that grew faster was Idaho at 17.3% to 1,839,106. Houston is now the nation’s fourth-largest city with a population of 2,304,580, up 9.3% from 2010. San Antonio ranks 7th with a population of 1,434,625. The population of Dallas is now 1,304,379 which puts it 9th among American cities. Austin is in 11th place at 961,855, a nearly 22% increase, which makes it one of the fastest growing cities in America.