Editorial corrections verified September 15, 2026. Fixed 2026 edition: CBP 2023, population 2024, and business applications Aug-2025 through Jul-2026.

District of Columbia ranks first on this composite; Georgia is the highest-ranked state. The top five jurisdictions are District of Columbia (#1), Georgia (#2), Delaware (#3), Nevada (#4), Arizona (#5). This composite averages six industry screening indexes built from U.S. Census Bureau data. It shortlists places for local research; it does not forecast demand, profit, or the best location for a specific business.

Each industry index uses four factors: how dense employer establishments already are, annual payroll per establishment, annual payroll divided by March employment, and all-industry business applications per 1,000 residents for Aug-2025 through Jul-2026. Applications are EIN filings for a business purpose — not completed employer formations, state LLC registrations, or measured industry growth. County Business Patterns covers employers only and omits businesses without paid employees. An establishment is a business location; a firm may operate more than one.

Growth-leaning states — Georgia, Delaware, Nevada, Arizona — sit near the top of this edition through some combination of lower employer density and higher application rates, while higher-cost or slower-application jurisdictions tend to rank lower. Those patterns describe the index inputs, not guaranteed opportunity.

Best State by Industry

Industry index	#1 jurisdiction
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 jurisdiction’s z-scored industry index across all six industries. Click any state for its startup guide. Numeric ranks and scores are unchanged from the verified 2026 edition.

Rank	State / DC	Composite score	Business applications 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: *Application rates marked with an asterisk sit outside the scoring caps described below; tables show raw rates. †District of Columbia is a city-scale jurisdiction; Georgia is the top-ranked full state.

How We Ranked the States

Each industry page standardizes four factors across 50 states and DC, applies editorial weights, then this page averages the six industry scores. Higher is better for payroll-per-establishment and applications; lower is better for employer density and payroll/employment. Weights are unchanged from the published edition:

Employer-establishment density (30%, lower scores higher) — establishments per 100,000 residents in NAICS 561720, 561730, 624410, 238220, 722330, and 812112 (six industry categories), U.S. Census Bureau County Business Patterns, 2023. Employer-only; not a complete competitor census.
Annual payroll per establishment (25%, higher scores higher) — annual industry payroll divided by employer establishments, same source. Can reflect establishment size or pay levels; it is not revenue, profit, or billable work.
Annual payroll divided by March employment (20%, lower scores higher) — annual industry payroll divided by the employee count for the pay period including March 12. Includes part-time staff and all occupations in the category. It is not an occupational wage quote, a full-time-equivalent salary, or a complete hiring cost.
All-industry business applications per 1,000 residents (25%, higher scores higher) — non-seasonally-adjusted Census BA series for Aug-2025 through Jul-2026, with extreme values capped before scoring. Not completed employer formations or state LLC registrations.

Population denominators use Census Bureau 2024 state population estimates. Payroll contributes to two factors, and the positive payroll-per-establishment weight can favor larger establishments. These weights have not been validated against business survival or profitability.

Outlier adjustment (*): application-rate caps are 11.3 and 28.4 per 1,000 residents (sorted positions 3 and 48 of 51). The lower cap changes Maine, West Virginia; the upper cap changes Delaware, Florida, Wyoming. Tables show original uncapped rates. This is a statistical adjustment; the data used here does not establish what caused an extreme value.

This composite does not include licensing, fees, insurance, rent, local demand, or profitability. Low employer density can reflect low demand, geography, industry mix, or missing nonemployers as well as potential opportunity.

Dig Into Each Industry

For the employer side of your operating plan, compare service-business sizes and revenue by employee bracket. The study covers five industries using 2022 full-year employer firms; firm counts and revenue shares describe different aspects of each industry.

For a complementary view of the businesses that employer-density measures leave out, compare service businesses without paid employees. The study uses 2022 business counts and revenue across 11 categories; it does not rank states or predict profitability.

Each industry index publishes all 51 rows with the full factor data: cleaning business · landscaping business · daycare · HVAC business · food truck · salon. For the application counts behind the momentum factor, see business formation statistics by state (same fixed window). For how employer cohorts fare over time, see business survival rates by state. This page retains its stated data window; the editorial correction date does not mean the inputs were advanced to the latest month. For the share of employer jobs in young firms (Census BDS age ≤5) and firm entry/exit by state, see young-firm employment share by state.

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Frequently Asked Questions

What is the best state to start a business in 2026?

Across six industry screening indexes averaged into one composite, Georgia is the top full state (DC ranks first on the raw composite but is a city-scale jurisdiction). The top five full states in this edition are Georgia, Delaware, Nevada, Arizona, Mississippi. This is an editorial screening index from Census inputs, not a prediction of business success or a Census recommendation.

How is this index calculated?

We score 50 states and DC in six industries (cleaning, landscaping, child care, HVAC, mobile food, and beauty salons) on employer-establishment density, annual payroll per establishment, annual payroll divided by March employment, and all-industry business applications per 1,000 residents, using Census County Business Patterns 2023 and Business Formation Statistics for Aug-2025 through Jul-2026, then average the six industry scores. Weights are editorial judgment and have not been validated against survival or profitability.

Why do Wyoming and Delaware look unusual in formation data?

Both show extreme per-capita business-application rates. Business Formation Statistics counts business-purpose EIN applications, which are not the same as completed employer formations or state LLC registrations. Extreme values are capped before scoring (tables show raw rates). The datasets used here do not establish the cause of those extremes.

How often is this study updated?

This is a fixed 2026 edition. Inputs are CBP 2023, population 2024, and business applications Aug-2025 through Jul-2026. The editorial correction date (September 15, 2026) is not a claim that those inputs were advanced to a newer month. A future edition needs an explicit new window and recalculation before publication.

Hiring conditions also vary by state — see labor-market tightness by state (JOLTS) for openings, hires, and quits rates (statewide total nonfarm context for employers).

Sources

Data	Source	Vintage
Employer establishments, employment, payroll by industry and state	U.S. Census Bureau, County Business Patterns	2023
Business applications by state (all-industry BA)	U.S. Census Bureau, Business Formation Statistics	Aug-2025 through Jul-2026
State population	U.S. Census Bureau, Population Estimates (NST-EST2024)	2024