With more than 20% of new businesses failing within a year and inflation making starting a business even more difficult, personal finance firm WalletHub has released a report on the best and worst states to start a business in 2026.
WalletHub compared 50 U.S. states across 25 key indicators of startup success. Data sets range from ease of financing to labor costs to office space affordability.
Florida is the best state to start a business.
Here’s how WalletHub ranks Florida No. 1.
5th – Increase in average number of small businesses
17th – Labor costs
13th – Human Capital Availability
18th place – Length of average weekly working hours (in hours)
25th – Living expenses
One of the main reasons companies chose Florida was its zero income tax rate. WalletHub says this is attracting retail investors.
An ecosystem with talent pools is also available.
WalletHub said that with today’s high cost of living, about half of new businesses won’t last more than five years.
“So it’s important to establish your business in a state that gives you the best chance of success. The best states have low corporate tax rates, strong economies, an abundance of reliable workers, easy financing, and affordable real estate,” said WalletHub analyst Chip Lupo.
Data from WalletHubs shows that Florida is not only the best state to start a business in 2026, but also has the third-highest number of startups per capita and the highest percentage of adults engaged in entrepreneurship.
The number of small businesses in the state increased by nearly 16% between 2017 and 2023, making it the fifth-highest rate in the nation, including the 15th-lowest corporate tax rate.
Additionally, Florida’s working-age population (ages 16-64) is growing faster than all but five other states, and it has the third-highest percentage of workers who say they are engaged and committed to their jobs.
