A recently-released study shows that California and Texas are the two best states for entrepreneurs to start small businesses, but Illinois put on a really strong showing as well, finishing in the top-five.
The ranking was compiled by Looka, a company that provides logo design and other services to small businesses. The list puts Illinois in the No. 4 spot, praising the state for its median household income and being a good proving ground for companies with five or fewer employees.
California and Texas held down the fort in the No. 1 and 2 spots, respectively, while New Jersey finished in third and Georgia finished in fifth.
To compile its ranking, Looka analyzed six different metrics to come up with a total score. Those metrics included a state’s median household income, its rating for businesses with fewer than five employees, its business survival rate, its annual cost of living, the average annual payroll for small businesses and its rate of entrepreneurs.
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Illinois finished in No. 36 in the last metric, but finished in fifth in the performance of its businesses with fewer than five employees and in its annual payroll rating for small businesses.
The state finished in 17th in median household income, and 21st in the survival rate of small businesses.
Indiana was ranked No. 26, largely on the strength of its cost-of-living, and Wisconsin was ranked No. 27.
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Rhode Island, West Virginia and Delaware were ranked as the three worst states for entrepreneurs.
Data was collected from a variety of sources, including the U.S. Census Bureau, the American Community Survey and the World Population Review 2022.
