Map Shows States That Are Best for New Businesses

Entrepreneurship is a way to achieve financial freedom, but not every state is experiencing the same push to establish new businesses, according to a new report from digital marketing site DesignRush.

Some states saw significant changes in the number of businesses from September 2022 to September 2023, DesignRush reported.

Based on the growth in new businesses recorded from the U.S. Bureau of Labor Statistics (BLS), five states stood above the rest, seeing up to a 9.9 percent uptick year-over-year: Oregon, Montana, Michigan, Hawaii and Tennessee.

Oregon saw the number of businesses climb by 9.9 percent, reporting a total of 185,096 businesses in 2022 and then 203,369 in 2023.

Montana, which saw the second spot, recorded a 9.4 percent boost in new businesses, bringing its total to 66,947 in 2023.

Michigan also maintained a business-friendly environment, as it saw a 8.9 percent increase, growing by 26,612 businesses year over year. Meanwhile, Hawaii residents saw a close 8.6 percent uptick in new businesses, and Tennessee grew 8 percent year- over-year.”It’s great to see states from all areas of the US making the top ten ranking,” Gianluca Ferruggia, general manager at DesignRush, said in a statement. “This could suggest that America as a whole is well equipped for entrepreneurs and business ventures. It’ll be interesting to see if any new states make the ranking in the future as more establishments are founded.”

Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, said the fact that states across the country were seeing significant business development shows there’s more than just one pathway to boost entrepreneurship.

“There are different solutions to attract new businesses and retain them,” he told Newsweek. “While some of these states have seen business growth through lower taxes and fewer regulations, others have developed a better economic infrastructure through public-private partnerships and investments in education that now provide a more skilled workforce available to employers. The common theme, though, is in one way or another providing incentives to make the process of opening and maintaining a business easier.”

Startup funding, financial incentives and online registration portals tend to help entrepreneurs start their businesses, Kevin Thompson, a finance expert and the founder and CEO of 9i Capital Group, said.

In Tennessee, for example, the state has a $70 million fund to fuel the growing entrepreneurship ecosystem.

“By providing tax credits and grants, especially in sectors like tech and green energy, states are actively encouraging small business growth,” Thompson told Newsweek.