GOBankingRates considered nine factors to rank all 50 states on the strength of existing small businesses and startups, as well as how favorable the state's business climate is to entrepreneurs. All data was sourced on Oct. 15, 2015.  To measure existing businesses and startups, GOBankingRates looked at three factors: (1) the startup opportunity of the state, (2) the number of existing small businesses per capita, (3) and the survival rate of small businesses. Startup opportunity data (1) was sourced from The 2015 Kauffman Index: Startup Activity Report on State Trends and measured the rate of new entrepreneurs in the state, the portion of new entrepreneurs who were employed before starting a business, and the density of startups in the state. Data on existing small businesses (2) was sourced from the 2015 Small Business Profiles for the States and Territories from the U.S. Small Business Administration and ranked states based on the number of small businesses and small business employees in the state per capita. Lastly, the survival rate of small businesses (3) for each state sourced data from the Bureau of Labor Statistics' Business Employment Dynamics by State reports and was calculated by measuring the ratio of business creations to business deaths in 2013, the most recent year for which there is complete data.  GOBankingRates also measured how favorable a state's business climate is to new entrepreneurs by measuring (4) productivity in the state, (5) availability of employees, (6) education level of potential employees, (7) taxes on businesses, (8) lending to small businesses, and (9) costs in the state. Productivity (4) was measured by the state's per capita GDP in 2014, sourced from the U.S. Bureau of Economic Analysis. Employee availability (5) was calculated using data from DirectEmployers on State-by-State Job Openings and represents the portion of the population that is unemployed less the number of available jobs. Level of education (6) was calculated based on 2015 college graduation rates from the U.S. Department of Education and 2014 enrollment rates in each state sourced from the National Student Clearinghouse Research Center. This score was given half the weight of all other scores. GOBankingRates used the U.S. Chamber of Commerce's States Innovate study to source state data on business taxes (7), small business lending (8) and cost of living (9).  Several of these factors were normalized for the population of each state using the most recent population estimates from the Census Bureau.  Did your state not make the 10 ten best and worst list? Check out GOBankingRates' 50 state list below:  1 Washington 18 Idaho 35 Mississippi 2 Wyoming 19 Illinois 36 Kentucky 3 California 20 North Dakota 37 Kansas 4 Colorado 21 Michigan 38 Wisconsin 5 Oregon 22 Maine 39 Ohio 6 Texas 23 Georgia 40 Minnesota 7 Delaware 24 Iowa 41 Alabama 8 Massachusetts 25 Connecticut 42 Rhode Island 9 Montana 26 New York 43 Arkansas 10 Missouri 27 New Hampshire 44 Vermont 11 Utah 28 Arizona 45 Maryland 12 Nevada 29 North Carolina 46 Virginia 13 Florida 30 Indiana 47 Pennsylvania 14 Nebraska 31 New Jersey 48 South Carolina 15 Alaska 32 Oklahoma 49 Hawaii 16 South Dakota 33 Tennessee 50 West Virginia 17 Louisiana 34 New Mexico
Want to start a new business? Before you plan and build your venture, see how friendly some states are to new entrepreneurs