For every business that closed in Nevada last 12 months, about 1.3 businesses opened.
This ratio of business openings to closings makes Nevada the best state to open a small business, according to a latest study from an AI software company. MRPeasy.
“Examining the U.S. states with the highest and lowest small business opening and closing rates is interesting because this metric shows economic trends and growth,” said Mike Lurye, MRPeasy’s director of business development.
The study drew from Office of the U.S. Small Business Administration data for 2023 to find the variety of business openings and closings in each state during the 12 months, calculate the ratio between them and place each state on the list. She defined a small business as a business with fewer than 500 employees.
Meanwhile, Louisiana got here in at the bottom of the list as the worst state to start a small business in. It was the only state where the business opening-to-closing ratio was negative, meaning more businesses closed in Louisiana last 12 months than began opening.
Small businesses are likely to fail: data from the U.S. Bureau of Labor Statistics will be seen that 65% fail inside the first decade. Over 60 million According to data from the US Chamber of Commerce, Americans are employed in small businesses, and there are greater than them 33 million small businesses in the U.S. One in five small businesses indicate they have one to five months of emergency money reserves, according to a recent survey.
Here are the best and worst states to open a small business, based on the balance of business openings and closings over the past 12 months.
Las Vegas, Nevada. Photo credit: Getty Images
Best States
1. Nevada
Small business openings: 18,296
Small business closures: 8,012
Ratio: 1.284
2. Washington
Small business openings: 29,963
Small business closures: 13,419
Ratio: 1.233
3. Vermont
Small business openings: 4,037
Small business closures: 2,133
Ratio: 0.893
4. New Jersey
Small business openings: 45,577
Small business closures: 24,347
Ratio: 0.872
5. Tennessee
Small business openings: 25,753
Small business closures: 14,543
Ratio: 0.771
6. Maine
Small Business Openings: 7,379
Small business closures: 4,310
Ratio: 0.712
7. South Carolina
Small business openings: 20,872
Small business closures: 12,344
Ratio: 0.691
8. Idaho
Small business openings: 11,426
Small business closures: 6,765
Ratio: 0.689
9.Connecticut
Small business openings: 15,892
Small business closures: 9,598
Ratio: 0.656
10. Rhode Island
Small business openings: 6,343
Small business closures: 3,836
Ratio: 0.654
Lowest-ranked states
1. Louisiana
Small business openings: 11,189
Small business closures: 11,998
Coefficient: -0.067
2. Oregon
Small business openings: 17,483
Small business closures: 14,795
Ratio: 0.182
3. Missouri
Small business openings: 28,137
Small business closures: 23,579
Ratio: 0.193
4. Montana
Small business openings: 6,585
Small business closures: 5,439
Ratio: 0.211
5. Minnesota
Small business openings: 17,084
Small business closures: 13,879
Ratio: 0.231
6. North Dakota
Small business openings: 2,892
Small business closures: 2,317
Ratio: 0.248
7. New Mexico
Small business openings: 6,786
Small business closures: 5,352
Ratio: 0.268
8. Virginia
Small business openings: 32,318
Small business closures: 25,336
Ratio: 0.276
9. Nebraska
Small business openings: 6,997
Small business closures: 5,485
Ratio: 0.276
10.Iowa
Small business openings: 9,177
Small business closures: 7,138
Ratio: 0.286