The United States is the land of opportunity for aspiring entrepreneurs. From coast to coast, you’ll find diverse markets and plentiful resources for whatever your business’s needs may be. Each state handles its business laws differently though, so the decision of exactly where to start can be a tough one.

This list of best states to start a business should help sort things out.

 

5. Massachusetts

Top industries: STEM

Kicking off the list of best states to start a business is Massachusetts. This state is home to some of the top universities in the country, which provides plenty of benefits to those looking to start a business there. Access to university resources can make or break a budding startup, particularly in STEM fields.

lots of trees next to a body of water during the Massachusetts foliage

Entrepreneurs might tap into radical thinking through workshops or collaborations, gathering new ideas from young, creative minds. For companies in the math and science-based industries, proximity to research laboratories could be essential to success. Of course, with so many students graduating from these universities each year, businesses in Massachusetts also get priority access to new talent.

Boston is sometimes called the “Silicon Valley of the East Coast” due to its vibrant startup ecosystem. The tech scene has boomed in the past few years as a new generation of young professionals entered the job market. Businesses here can expect to find plenty of VC funding from investors who flock towards the steady supply of innovative new ideas.

 

4. California

Top industries: Tech

California is one of the best states to start a business in because it contains many of the United States’ largest cities, including Los Angeles, which is only dwarfed by New York City in size. In addition to a large consumer base within the city, Los Angeles is a popular hub for companies that deal with Asian markets, which are much closer than they might be for a business based on the East Coast.

a scene on a street corner in a California city at sunset

San Francisco is also an obvious choice for cities to start a business in. The Bay Area, commonly called Silicon Valley, is home to world-famous tech giants like Google, Facebook, and Apple. If you’re launching a tech startup, there’s no better place in the world to put down roots. The local ecosystem revolves around supporting small tech businesses, so resources are plentiful, especially talent and major VC funding. Blueground offers fully-furnished, equipped and serviced apartments in some of the world's most sought after cities. Tax incentives for small businesses in California help offset high costs in some areas, so don’t forget to take them into account. These might include payroll tax exclusions and rotating tax credits at both the state and federal level.

 

3. Illinois

Top industries: Healthcare, manufacturing

Illinois makes the list of best states to start a business solely because of Chicago, the largest hub in the Midwest. Chicago is a massive hub for startups, and some of the best incubators and accelerators in the world call the city home. As it’s not quite the size of New York City or Los Angeles, Chicago’s tight-knit entrepreneurial community is much more familiar and collaborative than you might find elsewhere. Some even say it feels more like a small town than a city.

An old rustic church building with a steeple in Illinois

One major advantage of starting a business in Chicago is the low cost of living. Costs of doing business, including renting office space, are significantly lower than in other major cities. Since day-to-day life costs less, talent is also cheaper than average. All this leads to a lower barrier to entry for startups that might be strapped for cash.

 

2. Washington, D.C.

Top industries: Government, social justice, consulting

D.C. is technically a district, not a state, but it still makes the list. The city is known for its supply of highly-educated young professionals who move there for a government or consulting job. Frequently, these millennials grow frustrated with the constraints of corporate life and leave to work for smaller, more innovative companies (or start their own).

The Lincoln Memorial in D.C. at sunset in front of a long reflecting pool

This has led to a huge growth in small businesses and startups in the region. Thankfully, they’re all close to one very large customer: the United States government. The government allocates around $15 billion per year just to research and development, providing ample opportunities for startups that can provide unique innovation.

The District of Columbia also has a high concentration of social justice-focused startups, mainly attracted by the many nonprofit organizations headquartered nearby. If you’re hoping to start a company with a conscience, Washington, D.C. is probably the place for you to live.

 

1. New York

Top industries: Finance, fashion, media

Home to the biggest city in the United States, New York is the number one best state to start a business. 98% of businesses in the state are classified as small businesses, and the average revenue across the board is $1.1 million annually. Bottom line: Plenty of people have found success as entrepreneurs in New York, and you can, too.

The resources and opportunities available in New York City just can’t be replicated elsewhere. This metropolis is home to nearly every type of business imaginable, in addition to the largest and most diverse consumer base in the United States. Whether you need talent, funding, services, or just new ideas for your business, you won’t have to look far to find it in New York City.

A New York City street with classical buildings on either side and the One World Trade Center straight ahead

New York has also initiated tax benefits for entrepreneurs, such as Startup New York, which allows small businesses to apply for ten years of tax-free operations. These apply across the state, so keep nearby cities such as Rochester and Buffalo in mind, too.

Blueground

All of the states listed above include major metropolitan areas with thriving entrepreneurial communities. Being located near these hubs offers many benefits. There are plenty of coworking spaces and startup hubs to choose from. It’s also easy to find flexible housing options designed for busy entrepreneurs; furnished apartment company Blueground offers apartments in all of the states listed above, for example. You can’t go wrong in any of these great cities to start a business.

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