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Small Business Survival Index Ranks States

Nevada has the best policy climate for small business and entrepreneurship, followed by South Dakota, Washington, Wyoming, and Florida. Good luck in Kansas, Maine, Hawaii, and Rhode Island, where the business climates are the most challenging. The District of Columbia, though not a state, is the least accommodating to small business. That’s the word from the Small Business Survival Committee, whose sixth annual rankings of states in its Small Business Survival Index 2001 aims to let citizens and lawmakers know how they stack up with other states on energy costs, friendliness to small businesses, and economic growth. Read More

(Updated on July 24, 2024)

Nevada has the best policy climate for small business and entrepreneurship, followed by South Dakota, Washington, Wyoming, and Florida. Good luck in Kansas, Maine, Hawaii, and Rhode Island, where the business climates are the most challenging. The District of Columbia, though not a state, is the least accommodating to small business.

That’s the word from the Small Business Survival Committee, whose sixth annual rankings of states in its Small Business Survival Index 2001 aims to let citizens and lawmakers know how they stack up with other states on energy costs, friendliness to small businesses, and economic growth.

According to Raymond J. Keating, SBSC chief economist and author of the study, in an increasingly mobile and competitive national economy, differences in government-imposed costs of doing business can make a huge difference between whether a state grows economically or falls behind.

“Small Business Survival Index 2001 offers a gauge by which to measure and compare how government in the states treat small businesses and entrepreneurs. Since small business serves as the backbone of the U.S. economy — for example, by providing the bulk of new jobs and majority of innovations — every state and local lawmaker should be concerned with the well-being of small business,” Keating said.

The Index ties together 17 major government-imposed or government-related costs affecting small businesses and entrepreneurs across a spectrum of industries and types of businesses — personal income taxes, capital gains taxes, corporate income taxes, property taxes, sales taxes, death taxes, unemployment taxes, health insurance taxes, electricity costs, workers’ compensation costs, crime rates, right to work status, number of bureaucrats, tax limitation status, Internet taxes, gas taxes, and state minimum wages.

These measures are combined into one index number — the Small Business Survival Index.

According to Keating, the best policy environment for entrepreneurship consists of low taxes, limited government, restrained regulation, and government protecting life, limb, and property.

“States following such a governing philosophy will reap great rewards from America’s entrepreneurs, including faster economic growth and increased job creation,” Keating said.

Following are the complete state rankings for the Small Business Survival Index 2001:

  1. Nevada, 27.060
  2. South Dakota, 28.250
  3. Washington, 32.010
  4. Wyoming, 32.150
  5. Florida, 33.180
  6. Texas, 34.250
  7. New Hampshire, 36.250
  8. Alabama, 36.830
  9. Mississippi, 38.160
  10. Tennessee, 39.540
  11. Colorado, 39.870
  12. Michigan, 40.205
  13. Illinois, 40.290
  14. Alaska, 40.880
  15. Virginia, 41.310
  16. Indiana, 41.820
  17. Missouri, 42.213
  18. South Carolina, 42.520
  19. Louisiana, 43.304
  20. Arizona, 44.178
  21. Massachusetts, 44.755
  22. Pennsylvania, 44.880
  23. Georgia, 45.350
  24. North Dakota, 45.379
  25. Arkansas, 45.420
  26. Idaho, 45.590
  27. Maryland, 46.310
  28. Oklahoma, 46.920
  29. Delaware, 46.950
  30. Wisconsin, 47.380
  31. Nebraska, 48.430
  32. Kentucky, 48.610
  33. Connecticut, 48.830
  34. Utah, 49.242
  35. North Carolina, 49.590
  36. Oregon, 50.010
  37. New Jersey, 50.360
  38. Montana, 50.979
  39. Iowa, 51.073
  40. Ohio, 52.870
  41. West Virginia, 53.120
  42. Vermont, 53.514
  43. New York, 54.005
  44. California, 54.860
  45. New Mexico, 55.410
  46. Minnesota, 55.890
  47. Kansas, 55.980
  48. Maine, 56.150
  49. Hawaii, 57.235
  50. Rhode Island, 59.011
  51. District of Columbia, 65.335

About the Small Business Survival Committee:

SBSC is a national nonpartisan, nonprofit small business advocacy group based in Washington, D.C. In its Web site, SBSC calls for eliminating price controls; lifting restrictions on energy exploration and production on federal lands; reducing regulatory barriers to building petroleum refineries, pipelines, electricity generation plants of all kinds, and transmission systems; performing a top-to-bottom review of all regulations affecting the energy industry and eliminating those that are costly and ineffective; avoiding all efforts to regulate CO2 emissions; stopping all efforts to increase CAFE standards; eliminating federal gas and diesel taxes; eliminating all forms of corporate “welfare” for energy-related industries; and advancing free trade.

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