With nearly 1 in 5 new businesses failing in their first year and inflation squeezing profit margins, WalletHub’s latest report offers critical insights into the best and worst states for entrepreneurship in 2025. Florida emerged as the top state for launching a business, while New York ranked near the bottom at 40th.
The personal finance site compared all 50 states using 25 key indicators, including labor costs, office-space affordability, and access to financing. Florida led in startup density, with robust revenue growth and low corporate taxes. Its thriving business ecosystem also benefits from a rapidly growing working-age population and enthusiastic workforce, said WalletHub analyst Chip Lupo.
In contrast, New York’s entrepreneurial environment remains challenging, ranking 47th in both office-space affordability and small business growth. The state also struggles with a high cost of living and average work hours that rank among the shortest nationwide. However, New York showed strength in its availability of skilled workers, ranking 7th in human capital.
Experts emphasized the role of state policies in fostering business growth. Bert Seither of the John P. Lowth Entrepreneurship Center highlighted Florida’s low tax rates and collaborative hubs as key drivers. He also pointed to the growth of industries like renewable energy and AI as ripe for entrepreneurial activity in business-friendly states.
Stephanie Black, a professor at Texas A&M University, noted that infrastructure and workforce development are as critical as tax incentives in attracting startups. States like Texas and North Carolina, she said, effectively combine these factors to create vibrant business ecosystems.
As New York grapples with these challenges, entrepreneurs nationwide are being advised to carefully weigh state conditions before launching ventures.
FingerLakes1.com is the region’s leading all-digital news publication. The company was founded in 1998 and has been keeping residents informed for more than two decades. Have a lead? Send it to [email protected].