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The Friendliest States for Entrepreneurs

The Friendliest States for Entrepreneurs . / Credit: Map image via Shutterstock

Not all states are equal when it comes to providing an entrepreneur-friendly environment, new research finds.

A study by, a website that helps match consumers with local small businesses,and the Ewing Marion Kauffman Foundation, a foundation devoted to entrepreneurship, revealed that Utah, Alabama, New Hampshire and Idaho rank as the friendliest states for small businesses. These four states were the only states to receive an "A+" in the poll, which graded states and cities on a number of factors, including ease of starting a business, hiring costs, government regulations and training programs.

The following states earned an "A" or "A-" rating:

  • Texas
  • Virginia
  • Kansas
  • Colorado
  • South Carolina
  • Georgia
  • Minnesota
  • Nevada


Hawaii, Maine and Rhode Island came in at the bottom of the rankings, with an "F" rating, while California and Illinois rounded out the bottom five, with a "D" rating.

In contrast, California was home to three of the bottom five cities for small businesses: Los Angeles, San Diego and Sacramento.

"Some 7,000 business owners across the country have told us that they care about a lot more than just taxes ― for most businesses, simple licensing regulations and helpful training programs are even more important to their success," said Sander Daniels, co-founder of

The research shows that professional licensing requirements were 30 percent more important than taxes in determining a state's overall business-friendliness. Overall, small businesses were relatively unconcerned with tax rates, with more than half of small business owners saying they think they pay about the right share of taxes.

Chad Brooks

Chad Brooks is a Chicago-based writer and editor with nearly 20 years in media. A 1998 journalism graduate of Indiana University, Chad began his career with Business News Daily in 2011 as a freelance writer. In 2014, he joined the staff full time as a senior writer. Before Business News Daily, Chad spent nearly a decade as a staff reporter for the Daily Herald in suburban Chicago, covering a wide array of topics including local and state government, crime, the legal system and education. Chad has also worked on the other side of the media industry, promoting small businesses throughout the United States for two years in a public relations role. His first book, How to Start a Home-Based App Development Business, was published in 2014. He lives with his wife and daughter in the Chicago suburbs.