Where is the best state in the U.S. to open a business? The answer, according to a new National Business Capital report, is Colorado. The “Best States to Start A Business report examined multiple factors that impact the success of a new business. The report found that Colorado, Utah and Michigan were among the best states to open a company based on booming economies, strong access to capital and manageable taxes—all factors that favor a new venture.

"With a good business plan, hard work, and a little luck, you can succeed anywhere," said Joe Camberato, CEO, of National Business Capital, a business loans marketplace with a network of 75 partner lenders. "If, for instance, my cousin wanted to open a business, and she could move anywhere in the country, I would urge her to read this study carefully."

The report found that Colorado and Utah balanced a blend of opportunity, growth and support, giving them a clear edge, while tax-friendly Texas and Florida, and high-capital states like California, offer unique advantages for aspiring business owners.

Additionally, California was seen as a strong choice for starting a business because the state offers deep funding resources.

New England, however, was not named as one of the best start-up regions due to the high costs and limited support available there. Massachusetts was the only state in the region to break the top 10.

In areas of the Mid-Atlantic, first-year survival is among the best in the country, with Pennsylvania, New Jersey and New York noted for having the highest survival rates. States like Minnesota and Massachusetts excel at a five-year survival rate.

Meanwhile, Missouri, New Jersey and Kentucky have sharp declines from first to fifth-year survival, with Missouri showing a 30 percent drop.

Wyoming, Delaware, Colorado and Utah lead in new business applications, while New England and the northern heartland lagged.

The Best States to Start a Business in 2025
1. Colorado (score out of 100): 71
2. Utah (score: 68.1) - tie
2. Michigan (score: 68.1) - tie
4. Texas (score: 66.1)
5. Florida (score: 64.3)
6. California (score: 64.2)
7. Minnesota (score: 63)
8. Indiana (score: 62.7)
9. Massachusetts (score: 62.1)
10. Ohio (score: 61.6)

The Worst States to Start a Business in 2025
41. New Hampshire (Score: 45.0 out of 100)
42. Wisconsin (43.1)
43. Maine (41.3)
44. New Mexico (40.7)
45. Arkansas (40.4)
46. Oregon (40.2)
47. Vermont (40)
48. West Virginia (39.3)
49. Rhode Island (35.7)
50. Kansas (29.4)