Starting a business is a big decision, and for women entrepreneurs, the stakes are often even higher. We know the statistics—about 20% of startups don’t survive their first year, and nearly half fold by year five. While passion and a solid business plan are non-negotiable, there is another critical factor that often flies under the radar: location.
Where you plant your business roots can determine your access to capital, the quality of your talent pool, and your overall operating costs. A recent study by WalletHub analyzed the 50 states across 25 key indicators—from financing accessibility to office space costs—to determine the best states to start a business in 2026.
If you’re thinking of launching a startup this year, here is where you might want to look.
The Top 3 Best States to Start a Business in 2026
The Sunshine State Takes the Crown: Florida
Florida has claimed the #1 spot for 2026. For women seeking a vibrant, active community, the state offers fertile ground, boasting the third-highest number of startups per capita and the highest percentage of adults engaged in entrepreneurship.
Why it wins:
- Rapid Growth: Between 2017 and 2023, the number of small businesses in Florida surged by nearly 16%, the fifth-highest growth rate in the nation.
- Enthusiastic Workforce: Don’t let the retirement stereotypes fool you. Florida’s working-age population (16-64) is growing faster than in all but five other states. Even better, the workforce is highly motivated, ranking third for workers who report being enthusiastic and committed to their jobs.
- Tax Benefits: The state keeps costs manageable with the 15th-lowest corporate tax rate in the U.S.
The Capital Hub: Utah
Rising to the #2 spot is Utah, a standout choice for women seeking funding. We know the funding gap is a persistent hurdle for female founders, making Utah’s ranking as the second-best state for financing accessibility incredibly relevant.
Why it wins:
- Access to Cash: Securing business loans is statistically easier here than almost anywhere else, helping new ventures get off the ground quickly.
- Tech Savvy: Utah was recognized as a leader in the “Digital States Survey,” which measures how effectively states use technology to improve business efficiency. This infrastructure allows tech-savvy founders to capitalize on their skills.
- Healthy Economy: With year-over-year employment growth exceeding 3% (5th highest in the U.S.) and affordable health insurance premiums for employees, the state shows strong signs that existing businesses are thriving.
The Networking Powerhouse: Texas
Coming in at #3 is Texas, which remains a heavy hitter for entrepreneurs. The state ranks 10th for its entrepreneurship rate and is home to a significant share of fast-growing firms.
Why it wins:
- Community and Clusters: The data shows that Texas excels in “strong clusters”—interconnected businesses in the same field. Over 53% of businesses here fit into these top-tier clusters, providing female business owners with built-in supply chains and customer bases. While this can mean more competition, it also means established networks are ready to be tapped.
- Engaged Talent: Texas ranks third for both working-age population growth and overall employment growth. Furthermore, the workforce is highly engaged, ranking third in the nation for employee engagement.
Rounding Out the Top 10 Best States to Start a Business in 2026
If the top three aren’t on your map, the rest of the top ten offers excellent environments for business growth, blending low costs with high resource availability. Notably, Georgia (previously #2 in 2025) has moved to #7, while Oklahoma and Idaho have climbed into the top five.
Top 10 states to start a business in 2026:
- Florida
- Utah
- Texas
- Oklahoma
- Idaho
- Mississippi
- Georgia
- Indiana
- Nevada
- California
States to Proceed with Caution
Conversely, some states present significantly higher hurdles due to high labor costs, expensive office rentals, or difficult regulatory environments. According to the 2026 data, the most challenging states to start a business include Rhode Island, Maryland, Hawaii, Connecticut, and New Jersey.
Worst 10 states to start a business in 2026:
- New York
- New Hampshire
- Alaska
- West Virginia
- Pennsylvania
- New Jersey
- Connecticut
- Hawaii
- Maryland
- Rhode Island
The Takeaway for Women Entrepreneurs
Data shows that a “bad location” is one of the most common reasons startups fail. While you can’t always pick up and move your life, understanding your state’s specific strengths and weaknesses allows you to plan better.
If you’re in a high-cost state like California (#10), you may need to lean harder into your access to resources to offset the high business costs. If you’re in a top-ranked state like Florida or Utah, capitalize on the enthusiastic workforce and accessible financing to fuel your growth.
Source: Data based on WalletHub’s “Best & Worst States to Start a Business (2026)” study.
