Launching a business isn’t just about choosing where you want to live. Several factors come into play, but the state you choose can determine your startup costs, growth potential, and long-term viability. If you’re undecided, you may have overlooked important considerations that can guide your decision on where to run your business. From taxes and startup fees to talent access and funding, this can change how or where to start up and do it right from the get-go.
Below, we rank the best U.S. states for launching a business in 2025 with their key metrics and factors to analyze their performance, like startup costs, growth rates, access to capital, and workforce strength. It matters where you build, whether you are a solo entrepreneur or if your startup is growing.
How the Rankings Were Determined
To identify the best states to start a business, we considered:
- Startup costs (LLC filing fees, business taxes, etc.)
- Small business growth rates
- Access to loans, venture capital, and grants
- GDP/Job growth
- Workforce readiness, unemployment, and income levels
Each state’s ranking reflects a trade-off between cost-effectiveness and opportunity. Others may cost more to start but provide superior resources for long-term scaling, or vice versa.
| Rank | State | Startup Cost (LLC) | Small Business Growth | Capital Access | Annual GDP/Job Growth | Unemployment | Median Income | Population Growth (2020-2024) |
| 1 | North Carolina | $125/$200 | Very High (Top 5) | Moderate-High | ~2% / ~1.5–2% | ~3–3.5% | ~$63,000 | 5.8% |
| 2 | Texas | $300/$0 | Extremely High | Very High | ~2–3% | ~3–4% | ~$68,000 | 7.3% |
| 3 | Indiana | $95/$31 | High (Top 10) | Above Average | ~1.5% / ~1% | ~2.5–3% | ~$60,000 | 2% |
| 4 | Florida | $125/$138.75 | Extremely High | High | ~2.5% / ~2% | ~3–3.5% | ~$65,000 | 8.5% |
| 5 | Georgia | $100/$50 | High (Top 5-7) | High | ~2% / ~1.2% | ~3–3.5% | ~$66,000 | 4.4% |
Top States to Start a Business in 2025
1. North Carolina
Why it ranks No. 1: Already home to some of the cheapest costs for businesses, North Carolina also provides some of the best expansion opportunities. Strategic location, skilled workforce, low cost of doing business, and access to urban markets without a hefty price; all these contribute to making it easier for entrepreneurs and small companies here.
Highlights:
- Startup cost (LLC): $125 filing / $200 annual report
- Business growth: Very High (Top 5 nationally)
- Capital access: Moderate–High
- Annual GDP/Job growth: ~2% / ~1.5–2%
- Unemployment: ~3–3.5%
- Median income: ~$63,000
- Population Growth (2020-2024): 5.8% increase
On top of all this, Charlotte and Raleigh are providing the driving force for innovation in tech, life sciences and finance.
2. Texas
Why it ranks 2nd: Texas is perennially one of the best states for entrepreneurs, due in part to its lack of personal income tax and the size (and diversity) of its manufacturing industry. Austin is also where the tech and creative scenes combine.
Highlights:
- Startup cost (LLC): $300 filing / $0 annual fee
- Business growth: Extremely High
- Capital access: Very High
- Annual GDP/Job growth: ~2–3%
- Unemployment: ~3–4%
- Median income: ~$68,000
- Population Growth (2020-2024): 7.3% increase
Texas combines a low-regulation environment with ample funding opportunities, particularly in high-growth sectors like energy, biotech, and real estate.
3. Indiana
Why it ranks 3rd: Indiana is one of the cheapest places to do it. From filing fees to cost of living, this is cost cost-effective location for solo founders, small teams or if you are just looking to keep your overhead low.
Highlights:
- Startup cost (LLC): $95 filing / $31 biennial report
- Business growth: High (Top 10 nationally)
- Capital access: Above Average
- Annual GDP/Job growth: ~1.5% / ~1%
- Unemployment: ~2.5–3%
- Median income: ~$60,000
- Population Growth (2020-2024): 2% increase
Great for companies with a lot of logistics or who rely on the logistics sector (very central and good transport connections)
4. Florida
Why it ranks 4th: The state ranks high for business formation rates and population growth. There are no state income taxes at all. There are no state income taxes. Combined with an excellent service economy and lively metro areas, Florida has become extremely popular
Highlights:
- Startup cost (LLC): $125 filing / $138.75 annual report
- Business growth: Extremely High
- Capital access: High
- Annual GDP/Job growth: ~2.5% / ~2%
- Unemployment: ~3–3.5%
- Median income: ~$65,000
- Population Growth (2020-2024): 8.5% increase
Cities like Miami and Tampa have diverse cultures and economies, helping startups access larger audiences.
5. Georgia
Why it ranks 5th: Georgia is a hub for fintech, logistics, and health tech business owners on the rise. The startup community in Atlanta is booming, and much of this success can be attributed to the infrastructure; state-level support for entrepreneurs often means funding programs are available just around the corner.
Highlights:
- Startup cost (LLC): $100 filing / $50 annual report
- Business growth: High (Top 5–7 nationally)
- Capital access: High
- Annual GDP/Job growth: ~2% / ~1.2%
- Unemployment: ~3–3.5%
- Median income: ~$66,000
- Population Growth (2020-2024): 4.4% increase
Georgia’s many colleges and incubators support workforce development and early-stage ventures.
Key Trends to Note
1. Affordability Remains King
A new business has to keep its costs very low, especially in the beginning stages. State policies, such as low LLC filing fees, minimal tax burdens and streamlined regulations, are why the best-performing states perform well. They can reinvest the savings into developing their product, doing marketing or even hiring.
2. High-Growth States Offer Bigger Markets
Naturally, states that undergo substantial population and GDP growth (e.g., Florida, Texas) will have more demand for new products and services. If one is a budding entrepreneur starting a customer-facing business or retail operations, then these growing markets need to be monitored.
3. Capital Access Makes Scaling Easier
This initial seed funding can often be the difference between growth and survival. Some states with robust VC networks, effective small business loan programs, or generous grants have proven to be a lifeline that many founders can hardly get elsewhere.
4. Workforce Readiness = Long-Term Growth
The right team is the most important thing to hire. Similarly, states with low unemployment figures, top colleges and universities in the area, along with a commitment to workforce development programs will always be able to offer even deeper talent pools. This key factor plays into the hands of growing-stage startups and tech ventures.
How to Choose the Right State for Your Business
With over 5.5 million new business applications filed in 2023 alone, the U.S. has seen a surge in startup activity, highlighting why location choices made today can shape future success.
While there’s no single correct answer, certain states are better suited to specific industries and founder goals.
You need to ask yourself a couple of important questions:
What’s Your Business Type?
- Service-based business? A significant, diverse population is a draw in places like Florida and Georgia.
- Logistics or manufacturing? It has excellent distribution and road-port access, unbeatable in the central United States.
- Tech or finance startup? North Carolina and Texas, because of those booming metro areas with their expanding venture ecosystem, should be a good bet.
Will You Hire or Stay Lean?
- For solo founders, you should probably focus on something affordable (low fees, low taxes, and low overhead). Some states, such as Georgia, Indiana, and parts of Texas, offer a combination of low costs and strong growth potential
- Access to talent, as well as training programs, is crucial for startups that are building teams. Here, North Carolina, Georgia and Texas do very well.
How Important Is Access to Funding?
Choose a state with robust capital networks if you need investors or bank loans to expand. Venture-backed startups often perform better in metro hubs like Austin, Raleigh, or Atlanta.
Where Are Your Customers?
Proximity to your target market matters. A brick-and-mortar store or restaurant requires foot traffic and purchasing power. Alternatively, if your business is entirely online, you may decide to optimise for profitability and lifestyle.
Conclusion
If you’re launching a new business in 2025, North Carolina, Texas, and Indiana should be at the top of your list. They provide an ideal combination of startup-friendly costs, economic growth, and talent access.
We also see Florida and Georgia rank highly (given all of the metro activity, plenty of service industry to employ, and capital-intensive tech hubs).
There is no silver bullet for location. And because your business model, goals and available resources are unique, what is right for you will be different from the next online entrepreneur. But the state you choose to operate in will affect how well you lay that foundation and your likelihood of success down the line.
The entrepreneurial landscape changes constantly, but one thing is sure: As an entrepreneur, location matters. Ensure your state provides optimal conditions for your idea to succeed.