Historically, Americans have been famed for their ambition, independence, and entrepreneurial spirit. Nowhere is this more obvious than in the wide popularity of the concept of the American Dream. This phrase has become shorthand for the whole concept of wanting to succeed in life by building a business as well as a name for yourself by any means necessary. However, the chances for the success of your business, unfortunately, aren’t equal throughout the country.
While your personal qualities and training may eventually determine the fate of your business, it is possible to talk about the best and worst states for business in the USA from an outside point of view. Year after year, publications like Forbes and Fortune magazine come out with their best states for business list. While it is difficult to come up with a definitive list that will account for all the variables, here is a general overview of the best and worst states for business.
What is the most business-friendly state?
Texas – always top of the list
Texas often tops many a best states for business list. Its economy and developed infrastructure are what sets it apart from the other 49 states. It is also the state that grants most patents, coming in second behind California. In addition to this, a recent list by Forbes framed it as the state with the largest growth prospects in the country. So not only is the Lone Star State currently the most economically sound, but it also houses huge future potential. Some of the reasons for it being a typical CEO’s pet:
- low taxes and flexible regulations;
- highly skilled workers;
- low unemployment rates.

Utah – at the top of every best states for business list in recent years
Utah is also very popular with CEOs for many of the same reasons as Texas. Its flay taxes are among the lowest in the US. Its infrastructure is another helpful factor that makes it an attractive business destination. However, recently it marked a slight drop on these lists. The reason for this is the rising business cost as well as the lower economic prospects. On the other hand, energy costs are still far below the national average. In addition to this, the job growth it noted in recent years is still going strong.
North Carolina – a lack of workers’ unions makes it attractive for companies
North Carolina has ranked at the very top of best states to do business in for quite some time now. One of the main reasons for this is the fact that its workers are barely unionized at all. Only 1.9% of its workforce is part of the union system, which in turn lowers the labor costs in a major way. In 2015, the labor costs were as much as 10% lower than the national average. Energy and tax costs are also well below the nation’s average numbers. It also boasts a youthful and highly skilled workforce. The state government also offers different incentives to struggling businesses.
What are some of the worst states for doing business?
California – so bad for business companies are leaving
In recent years, the California state government has been catching a lot of flak for its attitude towards businesses. One of the main reasons for experts throwing around words like ‘unsustainable’ about this state is the simple fact of its being overly populated coupled with an infrastructure that has long been failing to meet the needs of its citizens. Other reasons include the state’s debt, as well as unattractive taxes and other regulations. Things have deteriorated to the point of companies now moving from California to some other state.
Hawaii – a lack of resources makes it difficult to start and keep a business
Hawaii’s main problem when it comes to appealing to entrepreneurs is the same thing that actually may be its main attraction to the rest of us. The fact that it is an island makes Hawaii very vulnerable environmentally as well as economically. Its unsatisfactory access to resources forces it to be one of the great importer states, which, in turn, makes it unappealing as a business destination. While the mandatory health insurance coverage is a huge plus for its population, it is another reason CEOs will think twice before investing in this state. Taxes, costs of labor and utilities are also contributing to Hawaii being a pricey investment destination. Much like California, many people that started a business in Hawaii do not have the luxury of patiently waiting for their business to grow. In this case, they have to hire a company like Verified Movers to help move their company elsewhere.

New Hampshire – good news for New Hampshirites make bad news for businesses
New Hampshire is another state whose legislation positively affects its citizens, while simultaneously making it bad for starting a business. Its largest problem for businesses is incredibly low availability of workers. Of course, this means New Hampshire’s unemployment rate is also incredibly low. It is also among the states that offer few, if any, government incentives to businesses. Another reason New Hampshire is maybe not particularly business-friendly is its constant growth when it comes to personal income. High costs of labor along with the high corporate taxes as well as a crowded market rank the Granite State quite unfavorably. Sustainability is fast becoming an important factor for businesses, and these things make having a business in New Hampshire unsustainable.
The best and worst states for business
Having 50 states to choose from can almost make American business owners spoiled for choice. There are very few blanket statements to be made when it comes to the best and worst states for business. However, looking at certain factors like taxes and regulations, workforce profile and the level of infrastructure can help point one in the right direction. On the other hand, there are so many other things to consider when starting a business that, while it might be useful to know these things, they still cannot make the decision for you.