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Ask where to start a business and you’ll get opinions. This study is built from numbers instead: every state, scored across six real industries — cleaning, landscaping, child care, HVAC, food trucks, and salons — on four factors from U.S. Census Bureau data: how saturated each market already is, how much payroll the average firm supports, what labor costs, and how fast the state is forming new businesses right now (Aug-2025 through Jul-2026). The underlying formation data refreshes monthly, and the full ranking is re-scored annually — this page is the 2026 edition.
The result is a Sun Belt story with a few surprises. Growth states — Georgia, Delaware, Nevada, Arizona — dominate the top through some combination of thin competition and fast formation, while high-cost, slow-formation states cluster at the bottom.
Best State by Industry
| Industry index | #1 state |
|---|---|
| Cleaning business | District of Columbia† |
| Landscaping business | District of Columbia† |
| Daycare | Florida |
| HVAC business | District of Columbia† |
| Food truck | Oklahoma |
| Salon | Delaware |
The Composite Ranking
Average of each state’s z-scored index across all six industries. Click any state for its complete startup guide.
| Rank | State | Composite score | New biz apps per 1k residents* |
|---|---|---|---|
| 1 | District of Columbia† | 1.077 | 22.5 |
| 2 | Georgia | 0.689 | 24.8 |
| 3 | Delaware* | 0.657 | 58.0 |
| 4 | Nevada | 0.615 | 21.1 |
| 5 | Arizona | 0.559 | 20.4 |
| 6 | Mississippi | 0.553 | 20.9 |
| 7 | Texas | 0.540 | 18.8 |
| 8 | Florida | 0.466 | 30.3 |
| 9 | New Mexico | 0.458 | 20.5 |
| 10 | Tennessee | 0.428 | 15.9 |
| 11 | Kentucky | 0.359 | 16.6 |
| 12 | Louisiana | 0.356 | 17.7 |
| 13 | Oklahoma | 0.307 | 16.9 |
| 14 | Colorado | 0.301 | 27.5 |
| 15 | South Carolina | 0.269 | 18.7 |
| 16 | Alabama | 0.256 | 15.0 |
| 17 | Maryland | 0.252 | 17.3 |
| 18 | Missouri | 0.209 | 18.5 |
| 19 | Ohio | 0.208 | 15.5 |
| 20 | Utah | 0.172 | 23.8 |
| 21 | North Carolina | 0.160 | 17.9 |
| 22 | Arkansas | 0.143 | 14.6 |
| 23 | Michigan | 0.091 | 16.5 |
| 24 | Virginia | 0.088 | 16.9 |
| 25 | West Virginia | 0.080 | 10.4 |
| 26 | Indiana | 0.042 | 14.2 |
| 27 | California | 0.041 | 15.3 |
| 28 | Kansas | 0.009 | 14.4 |
| 29 | New Jersey | -0.043 | 18.2 |
| 30 | Wyoming* | -0.078 | 145.0 |
| 31 | Illinois | -0.127 | 15.6 |
| 32 | Connecticut | -0.161 | 14.8 |
| 33 | South Dakota | -0.184 | 14.3 |
| 34 | Hawaii | -0.202 | 12.9 |
| 35 | Wisconsin | -0.237 | 13.3 |
| 36 | Montana | -0.240 | 28.4 |
| 37 | Iowa | -0.268 | 11.6 |
| 38 | Idaho | -0.274 | 18.2 |
| 39 | Pennsylvania | -0.288 | 12.8 |
| 40 | Minnesota | -0.321 | 13.2 |
| 41 | New York | -0.351 | 16.2 |
| 42 | Washington | -0.376 | 14.7 |
| 43 | Oregon | -0.455 | 14.9 |
| 44 | Alaska | -0.460 | 17.2 |
| 45 | Nebraska | -0.529 | 12.1 |
| 46 | North Dakota | -0.664 | 12.2 |
| 47 | Massachusetts | -0.667 | 11.9 |
| 48 | New Hampshire | -0.734 | 14.0 |
| 49 | Rhode Island | -0.788 | 11.3 |
| 50 | Vermont | -0.862 | 12.8 |
| 51 | Maine | -1.079 | 10.7 |
Footnotes: *Wyoming and Delaware application counts are inflated by non-resident LLC filings; their momentum factor is capped before scoring. †District of Columbia is a city-scale market; Georgia is the top-ranked full state.
How We Ranked the States
Each state is scored on four factors, standardized as z-scores and weighted. Higher is better for revenue and momentum; lower is better for competition and labor cost.
- Market saturation (30%) — establishments per 100,000 residents in NAICS 561720, 561730, 624410, 238220, 722330, 812112 (six industry categories), U.S. Census Bureau County Business Patterns, 2023. Fewer competitors per capita scores higher.
- Payroll per establishment (25%) — annual payroll divided by establishment count, same source. A proxy for how much paid work the average firm supports.
- Labor cost (20%) — annual payroll per employee in the industry, same source. Cheaper labor scores higher for a new owner-operator.
- New-business momentum (25%) — business applications per 1,000 residents, Aug-2025 through Jul-2026, U.S. Census Bureau Business Formation Statistics. Values are capped at the 5th–95th percentile before scoring (see footnotes).
Population denominators use Census Bureau 2024 state population estimates. The weights are editorial judgment — we publish every underlying number in the table so you can re-rank by whichever factor matters most to your business.
Footnotes: *Wyoming and Delaware business-application counts are heavily inflated by non-resident LLC filings routed through registered agents; we cap their momentum factor before scoring and show the raw number in the table. †District of Columbia is a city-scale market and behaves unlike full states on density and payroll measures.
Dig Into Each Industry
Each industry index publishes all 51 rows with the full factor data: cleaning business · landscaping business · daycare · HVAC business · food truck · salon. For the month-by-month formation numbers behind the momentum factor, see business formation statistics by state, updated monthly. And because where to start is only half the question, our business survival rates by state page tracks how ventures in each state actually fare at the 1-, 5-, and 10-year marks.
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Wherever you land, the first filing is the same
Every state on this list starts a business the same way: form the business entity. Bizee files your LLC — you pick the package and pay the state fee in any of the 51 jurisdictions ranked here.
Frequently Asked Questions
What is the best state to start a business in 2026?
Across six industries scored on Census data, Georgia is the top full state (DC ranks first on raw numbers but is a city-scale market). The top five full states are Georgia, Delaware, Nevada, Arizona, Mississippi.
How is this index calculated?
We score all 50 states and DC in six industries (cleaning, landscaping, child care, HVAC, mobile food, and salons) on market saturation, payroll per firm, labor cost, and new-business momentum, all from Census Bureau data (2023 County Business Patterns and Aug-2025 through Jul-2026 Business Formation Statistics), then average the industry scores.
Why do Wyoming and Delaware look unusual in formation data?
Both states attract huge volumes of non-resident LLC filings through registered agents, which inflates their per-capita business-application numbers far beyond local economic activity. We cap that factor before scoring and explain the adjustment in our methodology.
How often is this study updated?
This is an annual study — the 2026 edition. The ranking is re-scored each year as the Census Bureau releases new County Business Patterns data, and the business-formation momentum factor is refreshed monthly from Business Formation Statistics. Journalists and researchers are welcome to cite it with attribution and a link.
Sources
| Data | Source | Vintage |
|---|---|---|
| Establishments, employment, payroll by industry and state | U.S. Census Bureau, County Business Patterns | 2023 |
| Business applications by state | U.S. Census Bureau, Business Formation Statistics | Aug-2025 through Jul-2026 |
| State population | U.S. Census Bureau, Population Estimates (NST-EST2024) | 2024 |