Straight Talk

Starting a business? Avoid these 10 states to stay afloat

Key Points
  • WalletHub has ranked all 50 U.S. states from best to worst for starting a business. Here's a look at the 10 worst.
  • The firm factored in business environment, access to resources and the cost of doing business in each state.
  • Expensive, high-tax Northeastern states and a couple of poorer southern states rank near the bottom.
David Samuel Robbins | Getty Images

“Location, location, location” has been a real estate industry cliché for nearly a century and, since clichés are clichés because they are largely true (according to the well-known, er, cliché), the mantra still applies — and across many industries. To wit, a less-than-ideal location or failed geographic expansion was a factor in 9 percent of business start-up failures in a recent analysis of 101 shuttered new businesses from research firm CB Insights. Around one-fifth of all start-ups, in fact, don’t survive one year of operation, according to the U.S. Bureau of Statistics, reports WalletHub in its recent “2018’s Best & Worst States to Start A Business” ranking.

Here’s a look at the 10 absolute worst U.S. states in which to start a business, according to the WalletHub list. For the full ranking of all 50 states, visit WalletHub’s site.

By CNBC's Kenneth Kiesnoski Source: WalletHub
Posted 2 July 2018

10. Alabama

Huntsville, Alabama
Traveler1116 | Getty Images

Total score: 45.90
“Business environment rank”: 48
“Access to resources” rank: 41
“Business costs” rank: 9

Source: WalletHub

9. Maryland

Downtown Rockville, Maryland.
Smith Collection | Getty Images

Total score: 45.85
“Business environment rank”: 29
“Access to resources” rank: 8
“Business costs” rank: 45

Source: WalletHub

8. Connecticut

Norwalk, Connecticut.
Denis Tangney Jr, | Getty Images

Total score: 45.05
“Business environment rank”: 42
“Access to resources” rank: 4
“Business costs” rank: 46

Source: WalletHub

7. New Jersey

The downtown Newark skyline.
Emile Wamsteker | Bloomberg | Getty Images

Total score: 44.00
“Business environment rank”: 23
“Access to resources” rank: 9
“Business costs” rank: 50

Source: WalletHub

6. West Virginia

Harpers Ferry, West Virginia
Walter Bibikow | Getty Images

Total score: 43.60
“Business environment rank”: 50
“Access to resources” rank: 38
“Business costs” rank: 4

Source: WalletHub

5. Pennsylvania

Pittsburgh, Pennyslvania
J. Altdorfer Photography | Getty Images

Total score: 42.81
“Business environment rank”: 47
“Access to resources” rank: 22
“Business costs” rank: 37

Source: WalletHub

4. Vermont

Vermont was one of the first to get the ball rolling last year with its Remote Worker Grant Program, offering individuals up to $10,000 over two years to move to the Green Mountain State.
Glenn Van Der Knijff | Getty Images

Total score: 42.53
“Business environment rank”: 46
“Access to resources” rank: 49
“Business costs” rank: 27

Source: WalletHub

3. Rhode Island

Providence, Rhode Island
Jeff Greenberg | UIG | Getty Images

Total score: 41.88
“Business environment rank”: 49
“Access to resources” rank: 11
“Business costs” rank: 35

Source: WalletHub

2. New Hampshire

Wolfeboro, New Hampshire
Don Emmert | AFP | Getty Images

Total score: 38.11
“Business environment rank”: 45
“Access to resources” rank: 48
“Business costs” rank: 40

Source: WalletHub

1. Hawaii

Honolulu, Hawaii
Naomi Hayes of Island Memories Photography | Getty Images

Total score: 37.16
“Business environment rank”: 40
“Access to resources” rank: 50
“Business costs” rank: 43

Source: WalletHub