Best (And Worst) States For Business Climate For Solution Provider Startups

Variable Climates

The success or failure of a solution provider startup depends heavily on the company's strategy, its ability to raise capital, and the caliber of its management and employees. But outside factors such as the number of potential business customers in a state, a state's growth rate and competition from other solution providers will also have a big impact on a startup's ultimate success or failure.

This year's Best States analysis looked at the business climate and competitive environment in each state. Criteria included the number of private sector firms in each state, the number of small (less than $10 million in annual sales) and midsize (between $10 million and $999 million) businesses in each state, and each states' gross state product and growth (the U.S. national average was 2.3 percent GDP growth) in 2017, among other metrics.

The analysis included the number of solution providers in each state, based on data in The Channel Company's solution provider database.

Also included in the analysis is each state's economic rankings according to Forbes Best States for Business 2017, CNBC America's Top States for Business 2018 and WalletHub.

The following are the 10 states with the highest rankings for business climate/competitive environment, listed from No. 10 to No. 1. The states with the lowest rankings are then listed from No. 41 to No. 50.

Best States No. 10: Pennsylvania

Pennsylvania's gross state product was $767.6 billion in 2017 (ranked No. 6), recording 1.8 percent growth from the previous year.

The Keystone State has 708,538 small and midsize businesses (No. 5).

Pennsylvania's economy was ranked No. 41 in the CNBC America's Top States for Business 2018 and No. 23 by WalletHub.

Best States No. 9: Illinois

Illinois' gross state product was $835.6 billion in 2017 (ranked No. 5), recording 1.2 percent growth from the previous year.

The Prairie State has 566,129 small and midsize businesses (ranked No. 7).

Illinois' economy was ranked No. 42 in the CNBC America's Top States for Business 2018 and No. 34 by WalletHub.

Best States No. 8: Massachusetts

Massachusetts' gross state product was $537.1 billion in 2017 (ranked No. 11), recording 2.6 percent growth from the previous year.

The Bay State has 398,201 small and midsize businesses (ranked No. 17).

Massachusetts' economy was ranked No. 14 in the CNBC America's Top States for Business 2018 and No. 3 by WalletHub.

Best States No. 7: Georgia

Georgia's gross state product was $563.8 billion in 2017 (ranked No. 9), recording 2.7 percent growth from the previous year.

The Peach State has 630,826 small and midsize businesses (ranked No. 6).

Georgia's economy was ranked No. 2 in the CNBC America's Top States for Business 2018 and No. 8 by WalletHub.

Best States No. 6: Washington

Washington's gross state product was $517.2 billion in 2017 (ranked No. 13), recording 4.4 percent growth from the previous year—the highest in the country.

The Evergreen State has 403,191 small and midsize businesses (ranked No. 16).

Washington's economy was ranked No. 4 in the CNBC America's Top States for Business 2018 and No. 1 by WalletHub.

Best States No. 5: North Carolina

North Carolina's gross state product was $547.2 billion in 2017 (ranked No. 10), recording 2.3 percent growth from the previous year.

The Tar Heel State has 521,499 small and midsize businesses (ranked No. 10).

North Carolina’s economy was ranked No. 6 in the CNBC America's Top States for Business 2018 and No. 11 by WalletHub.

Best States No. 4: Florida

Florida's gross state product was $984.1 billion in 2017 (ranked No. 4), recording 2.2 percent growth from the previous year.

The Sunshine State has 1,940,626 small and midsize businesses (ranked No. 2).

Florida's economy was ranked No. 9 in the CNBC America's Top States for Business 2018 and No. 20 by WalletHub.

Best States No. 3: New York

New York's gross state product was $1.56 trillion in 2017 (ranked No. 3), recording 1.1 percent growth from the previous year.

The Empire State has 1,054,577 small and midsize businesses (ranked No. 4).

New York's economy was ranked No. 23 in the CNBC America's Top States for Business 2018 and No. 17 by WalletHub.

Best States No. 2: Texas

Texas' gross state product was $1.75 trillion in 2017 (ranked No. 2), recording 2.6 percent growth from the previous year.

The Lone Star State has 1,522,105 small and midsize businesses (ranked No. 3).

Texas' economy was ranked No. 1 in the CNBC America's Top States for Business 2018 and No. 9 by WalletHub.

Best States No. 1: California

California's gross state product was $2.80 trillion in 2017 (ranked No. 1), recording 3.0 percent growth from the previous year.

The Golden State has 2,258,911 small and midsize businesses (ranked No. 1).

California's economy was ranked No. 11 in the CNBC America's Top States for Business 2018 and No. 4 by WalletHub.

Worst States No. 41: Hawaii

Hawaii's gross state product was $89.3 billion in 2017 (ranked No. 38), recording 1.7 percent growth from the previous year.

The Aloha State has 67,307 small and midsize businesses (ranked No. 42).

Hawaii's economy was ranked No. 33 in the CNBC America's Top States for Business 2018 and No. 42 by WalletHub.

Worst States No. 42: Rhode Island

Rhode Island's gross state product was $60.7 billion in 2017 (ranked No. 44), recording 1.6 percent growth from the previous year.

The Ocean State has 56,203 small and midsize businesses (ranked No. 46).

Rhode Island's economy was ranked No. 28 in the CNBC America's Top States for Business 2018 and No. 31 by WalletHub.

Worst States No. 43: Montana

Montana's gross state product was $48.6 billion in 2017 (ranked No. 48), recording 0.6 percent growth from the previous year.

The Treasure State has 78,593 small and midsize businesses (ranked No. 41).

Montana's economy was ranked No. 34 in the CNBC America's Top States for Business 2018 and No. 33 by WalletHub.

Worst States No. 44: Maine

Maine's gross state product was $62.5 billion in 2017 (ranked No. 43), recording 1.4 percent growth from the previous year.

The Pine Tree State has 66,341 small and midsize businesses (ranked No. 44).

Maine's economy was ranked No. 43 in the CNBC America's Top States for Business 2018 and No. 45 by WalletHub.

Worst States No. 45: North Dakota

North Dakota's gross state product was $55.9 billion in 2017 (ranked No. 45), recording 1.0 percent growth from the previous year.

The Peace Garden State has 50,810 small and midsize businesses (ranked No. 47).

North Dakota's economy was ranked No. 44 in the CNBC America's Top States for Business 2018 and No. 32 by WalletHub.

Worst States No. 46: West Virginia

West Virginia's gross state product was $78.8 billion in 2017 (ranked No. 40), recording 2.6 percent growth from the previous year.

The Mountain State has 66,919 small and midsize businesses (ranked No. 43).

West Virginia's economy was ranked No. 36 in the CNBC America's Top States for Business 2018 and No. 47 by WalletHub.

Worst States No. 47: South Dakota

South Dakota's gross state product was $50.3 billion in 2017 (ranked No. 47), recording 0.3 percent growth from the previous year.

The Mount Rushmore State has 56,776 small and midsize businesses (ranked No. 45).

South Dakota's economy was ranked No. 27 in the CNBC America's Top States for Business 2018 and No. 44 by WalletHub.

Worst States No. 48: Vermont

Vermont's gross state product was $32.6 billion in 2017 (ranked No. 50), recording 1.1 percent growth from the previous year.

The Green Mountain State has 45,316 small and midsize businesses (ranked No. 49).

Vermont's economy was ranked No. 29 in the CNBC America's Top States for Business 2018 and No. 24 by WalletHub.

Worst States No. 49: Wyoming

Wyoming's gross state product was $41.4 billion in 2017 (ranked No. 49), recording 2.0 percent growth from the previous year.

The Cowboy State has 34,537 small and midsize businesses (ranked No. 50).

Wyoming's economy was ranked No. 30 in the CNBC America's Top States for Business 2018 and No. 39 by WalletHub.

Worst State No. 50: Alaska

Alaska's gross state product was $54.4 billion in 2017 (ranked No. 46), recording 0.2 percent growth from the previous year.

The Last Frontier State has 47,825 small and midsize businesses (ranked No. 48).

Alaska's economy was ranked No. 49 in the CNBC America's Top States for Business 2018 and No. 31 by WalletHub.