Study: Washington Is the Best State for Entrepreneurs

By: M. Scott Morris
Published: February 17th, 2025

A new study ranks Washington as the No. 1 best state for entrepreneurs in 2025, rising seven spots compared to last year’s rankings. Texas ranks No. 2 after taking the top spot in 2024, and Maine ranks No. 3, marking a 27-spot jump. Seven states in the top 10 are new this year.

American entrepreneurship is booming with unprecedented growth and generational shifts driving new opportunities. The Treasury Department reports that 430,000 new businesses opened each month in 2024, a 50% increase since 2019. Innovations like remote work, the gig economy, and AI are fueling this transformation, creating entrepreneurial hot spots across the nation.

Simplify LLC released its annual study on the Best & Worst States for Entrepreneurs in 2025 using the most recent data from the Census Bureau, Bureau of Economic Analysis, Tax Foundation, and the U.S. Senate.

The rankings were determined by analyzing six key categories in all 50 states and D.C.: corporate tax rate, inflation, consumer spending growth, job creation rate, and net migration of educated workers.

The 2025 rankings were then compared to the 2024 rankings to see how the business climate has changed over the past year. 

Kansas saw the biggest drop, going from No. 7 to No. 49. Vermont and New Hampshire saw the biggest jumps with each improving by 35 spots in 2025, ranking No. 9 and No. 12, respectively.

Key findings include:

• 10 Best States for Entrepreneurs in 2025 are Washington, Texas, Maine, Nevada, Oregon, Florida, Rhode Island, Colorado, Vermont, Hawaii
• Washington (rank: 1, up 7 from 2024) saw a remarkable leap to the top spot, driven by a stunning 102.6% increase in new business growth, the highest in the nation. Job creation surged by 5.2 points, reaching 16.5% (16th overall). Consumer spending also climbed, up 2.4 points to 3.9% (10th in the U.S.), signaling strong economic confidence.
• Texas (Rank: 2, down 1 from 2024) dropped one spot despite a 5.5-point increase in job creation, reaching a rate of 17.3 (8th in the U.S.). However, new business growth took a significant hit, plummeting 32.1 points to -8.4%, ranking 36th overall. The state attracted 61,778 educated adults, a decrease of 13,805 from the previous year,but still good for second place. Texas is business friendly with no corporate income taxes.
• Maine (Rank: 3, up 27 from 2024) made a big jump, rising 27 spots, thanks to a 9-point boost in consumer spending, reaching 7.3%, the highest in the U.S. Job creation improved by 4.4 points, reaching a rate of 15.8, though it still ranked 26th nationally.

Leading sectors for new business are:

• Retail, including e-commerce and brick-and-mortar stores
• Professional, scientific and technical services, such as legal and accounting
• Construction, including residential and nonresidential

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