Oklahoma ranks high for a state to start a new business

A new study by Global Entrepreneurship Monitor shows Oklahoma is the 14th  best state in the U.S. to start a new business.

Nearly 1 in 5 working adults was a new business owner as of 2022 – up from 12.8% a decade earlier, and the highest rate in at least 20 years, according to the Global Entrepreneurship Monitor.

The wave of entrepreneurship is due in part to pandemic-era job losses and the rise of quiet quitting, which prompted many Americans to strike out on their own. Now, with inflation beginning to wane and the potential of artificial intelligence beginning to be unleashed, entrepreneurs are entering a new stage of economic opportunity and technological advancement.

SimplifyLLC analyzed seven metrics to identify the best and worst states to launch a business in 2024, including job creation, consumer spending, inflation, business growth and performance, corporate taxes, and whether educated workers are more likely to move in or out of the state.   We found that some states are fostering stronger entrepreneurial environments than others – and the top states just might surprise you.

Key Findings

  • Wyoming is the No. 1 State. The state has no corporate income taxes and has seen rapid business growth over the past year (39.2%). Further, about 1 in 5 businesses say their recent performance has been excellent.
  • Illinois is the Worst State. Illinois is experiencing an exodus of educated workers (net -54,000 in 2022), and has a high corporate tax burden (maximum rate of 9.5%). California, Connecticut, Louisiana and West Virginia also rank among the bottom five.
  • Every State Has Its Pros and Cons. Hawaii scored 45th due to its poor business performance and job creation over the past year, but it does have some of the best scores in the country when it comes to consumer spending growth (4.7%) and keeping inflation down since 2021 (16.9%).

Best States

Wyoming may be the state with the smallest population in the U.S., but it’s also the best to launch a business. It was buoyed to No. 1 by its strong business growth (39.2%) and performance (19.1% of businesses say they’re doing excellent), as well as its lack of corporate taxes. But keep in mind that even Wyoming has its drawbacks, with a high degree of inflation relative to 2021 (19.8%) and low consumer spending growth (0.6%).   Texas, which also has no corporate tax, took the No. 2 spot, with a strong influx of educated workers (a net of nearly 76,000 in 2022) and business growth of 23.7% in the year ending November 2023.

South Dakota, Florida and Missouri rounded out the top five states. No. 5 Missouri excelled in business growth (29.1%), while No. 4 Florida was brought up by job creation (12.7) and educated worker mobility (net 145,000) and No. 3 South Dakota was raised by its lack of corporate taxes, strong business performance (16.1% doing excellently) and strong consumer spending growth (4.1%).

Worst States

Illinois is the worst state to start a business, driven by a high maximum corporate tax rate (9.5%), poor business performance (8.1% say they’re doing excellent), and weak mobility for educated workers. While about 105,000 educated adults moved into the state in 2022, another 159,000 moved out, meaning the state’s net migration for educated workforce was nearly -54,000.

Next up, California ranked No. 50. Although it has a high job creation rate (12.3) and has seen less inflation since 2021 than most other states (16.9%), California is experiencing an exodus of educated workers, with nearly 149,000 more leaving the state than moving there in 2022. It also has a high maximum corporate tax rate (8.84%) and just 9.8% of businesses say their recent performance is excellent, one of the worst rates in the U.S.