Over one-fifth of all startups typically don't make it beyond their first year while nearly half never reach their fifth anniversary, according to a study by WalletHub.
Macroeconomic headwinds like elevated inflation and persistent labor market tightness remain obstacles for new businesses in 2026, the data showed, with 'bad location' also contributing.
"Around half of all new businesses don't survive five years, so the idea of becoming a business owner can be daunting, especially with the current high cost of living," said WalletHub Analyst, Chip Lupo.
"That's why it's crucial to establish your business in a state that will maximize your chances of success," he added. "The best states have low corporate tax rates, strong economies, an abundance of reliable workers, easy access to financing and affordable real estate. On top of that, you'll need to make sure you start in a place with an engaged customer base, if you're operating locally."
Meanwhile, looking for the right job to start your career may also mean moving far from home. In today's economy, companies are expanding beyond big-city headquarters to tap into more affordable markets and deep talent pools—and workers are following.
Some of the most common U.S. cities for relocating job seekers include Milwaukee, Wisconsin; Albany, New York; Harrisburg, Pennsylvania; Boise, Idaho and Grand Rapids, Michigan.
All five U.S. cities showcase a growing tech scene and vibrant economies.
(Photo Credit: Nuthawut/Adobe Stock)
The slideshow above illustrates the best states to start a business in 2026 as selected by WalletHub.
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