2017 Best (And Worst) States For Business Climate And Competitive Environments For Solution Provider Startups

Favorable Climate

An entrepreneur may have great ideas for launching a solution provider business. But such factors as the number of potential business customers in a state, a state's growth rate and competition from other solution providers will ultimately determine a startup's success or failure.

This year's Best States analysis looked at the business climate and competitive environment in each state. The former covered 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) business in each state, and each states' gross domestic product and GDP growth, among other metrics.

The Solution Provider Competitive Saturation Index measures a state's competitive environment – how much competition a startup solution provider can expect in any one state. The index is based on The Channel Company's solution provider database and calculates the number of potential business customers per solution provider with states ranked No. 1 being the most favorable for solution provider startups and No. 50 having the most competition.

Keep in mind that the saturation index often runs counter to other business climate criteria: States with otherwise poor business climate scores may have fewer solution providers against a startup has to compete.

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: North Carolina

North Carolina's GDP in 2016 was $517.9 billion in 2016 (ranked No. 10), recording 1.6 percent growth (ranked No. 19) from the prior year.

The Tar Heel State had 521,499 small and mid-size businesses, ranking the state No. 10 overall.

CNBC America's Top States for Business ranked North Carolina's economy No. 15 for its growth prospects.

With 3,522 solution providers in the state, North Carolina was ranked No. 35 on the solution provider competitive saturation index.

Best States No. 9: New York

New York's GDP in 2016 was nearly $1.49 trillion in 2016 (ranked No. 3), recording 0.8 percent growth (ranked No. 35) from the prior year.

The Empire State had 1,054,577 small and mid-size businesses, ranking the state No. 4 overall.

CNBC America's Top States for Business ranked New York's economy No. 33 for its growth prospects.

With 8,958 solution providers in the state, New York was ranked No. 47 on the solution provider competitive saturation index.

Best States No. 8: Oregon

Oregon's GDP in 2016 was $226.8 billion in 2016 (ranked No. 25), recording 3.3 percent growth (ranked No. 2) from the prior year.

The Beaver State had 291,626 small and mid-size businesses, ranking the state No. 24 overall.

CNBC America's Top States for Business ranked Oregon's economy No. 10 for its growth prospects.

With 1,970 solution providers in the state, Oregon was ranked No. 28 on the solution provider competitive saturation index.

Best States No. 7: Colorado

Colorado's GDP in 2016 was $323.9 billion in 2016 (ranked No. 19), recording 2.0 percent growth (ranked No. 12) from the prior year.

The Centennial State had 470,199 small and mid-size businesses, ranking the state No. 13 overall.

CNBC America's Top States for Business ranked Colorado's economy No. 13 for its growth prospects.

With 3,679 solution providers in the state, Colorado was ranked No. 36 on the solution provider competitive saturation index.

Best States No. 6: Ohio

Ohio's GDP in 2016 was $$625.7 billion in 2016 (ranked No. 7), recording 1.7 percent growth (ranked No. 17) from the prior year.

The Buckeye State had 550,209 small and mid-size businesses, ranking the state No. 9 overall.

CNBC America's Top States for Business ranked Ohio's economy No. 17 for its growth prospects.

With 4,492 solution providers in the state, Ohio was ranked No. 39 on the solution provider competitive saturation index.

Best States No. 5: Massachusetts

Massachusetts' GDP in 2016 was $507.9 billion in 2016 (ranked No. 11), recording 2.0 percent growth (ranked No. 12) from the prior year.

The Bay State had 398,201 small and mid-size businesses, ranking the state No. 17 overall.

CNBC America's Top States for Business ranked Massachusetts' economy No. 14 for its growth prospects.

With 4,628 solution providers in the state, North Carolina was ranked No. 41 on the solution provider competitive saturation index.

Best States No. 4: Georgia

Georgia's GDP in 2016 was $525.4 billion in 2016 (ranked No. 9), recording 3.0 percent growth (ranked No. 3) from the prior year.

The Peach State had 630,826 small and mid-size businesses, ranking the state No. 6 overall.

CNBC America's Top States for Business ranked Georgia's economy No. 1 for its growth prospects.

With 6,186 solution providers in the state, Georgia was ranked No. 44 on the solution provider competitive saturation index.

Best States No. 3: Washington

Washington's GDP in 2016 was $469.7 billion in 2016 (ranked No. 14), recording 3.7 percent growth (ranked No. 1) from the prior year.

The Evergreen State had 403,191 small and mid-size businesses, ranking the state No. 16 overall.

CNBC America's Top States for Business ranked Washington's economy No. 3 for its growth prospects.

With 3,709 solution providers in the state, Washington was ranked No. 37 on the solution provider competitive saturation index.

Best States No. 2: Florida

Florida's GDP in 2016 was $926.8 billion in 2016 (ranked No. 4), recording 3.0 percent growth (ranked No. 3) from the prior year.

The Sunshine State had 1,940,626 small and mid-size businesses, ranking the state No. 2 overall.

CNBC America's Top States for Business ranked Florida's economy No. 2 for its growth prospects.

With 10,320 solution providers in the state, Florida was ranked No. 48 on the solution provider competitive saturation index.

Best States No. 1: California

California's GDP in 2016 was $2.60 trillion in 2016 (ranked No. 1), recording 2.9 percent growth (ranked No. 7) from the prior year.

The Golden State had 2,258,911 small and mid-size businesses, ranking the state No. 1 overall.

CNBC America's Top States for Business ranked California's economy No. 22 for its growth prospects.

With 22,533 solution providers in the state, California was ranked No. 50 – dead last – on the solution provider competitive saturation index.

Worst States No. 41: New Mexico

New Mexico's GDP in 2016 was $93.3 billion in 2016 (ranked No. 37), recording a 0.5 percent decline (ranked No. 44) from the prior year.

The Land of Enchantment State had 97,314 small and mid-size businesses, ranking the state No. 38 overall.

CNBC America's Top States for Business ranked New Mexico's economy No. 44 for its growth prospects.

With 576 solution providers in the state, New Mexico was ranked No. 14 on the solution provider competitive saturation index.

Worst States No. 42: Kansas

Kansas' GDP in 2016 was $153.3 billion in 2016 (ranked No. 32), recording 0.2 percent growth (ranked No. 42) from the prior year.

The Sunflower State had 148,877 small and mid-size businesses, ranking the state No. 33 overall.

CNBC America's Top States for Business ranked Kansas' economy No. 46 for its growth prospects.

With 1,143 solution providers in the state, Kansas was ranked No. 21 on the solution provider competitive saturation index.

Worst States No. 43: Mississippi

Mississippi's GDP in 2016 was $107.7 billion in 2016 (ranked No. 36), recording 0.8 percent growth (ranked No. 35) from the prior year.

The Magnolia State had 138,362 small and mid-size businesses, ranking the state No. 34 overall.

CNBC America's Top States for Business ranked Mississippi's economy No. 47 for its growth prospects.

With 461 solution providers in the state, Mississippi was ranked No. 9 on the solution provider competitive saturation index.

Worst States No. 44: Delaware

Delaware's GDP in 2016 was $70.4 billion in 2016 (ranked No. 41), recording 0.3 percent growth (ranked No. 41) from the prior year.

The First State had 551,027 small and mid-size businesses, ranking the state No. 8 overall.

CNBC America's Top States for Business ranked Delaware's economy No. 39 for its growth prospects.

With 628 solution providers in the state, Delaware was ranked No. 15 on the solution provider competitive saturation index.

Worst States No. 45: Montana

Montana's GDP in 2016 was just under $46 billion in 2016 (ranked No. 48), recording 0.2 percent growth (ranked No. 42) from the prior year.

The Treasure State had 78,953 small and mid-size businesses, ranking the state No. 41 overall.

CNBC America's Top States for Business ranked Montana's economy No. 35 for its growth prospects.

With 383 solution providers in the state, Montana was ranked No. 7 on the solution provider competitive saturation index.

Worst States No. 46: Vermont

Vermont's GDP in 2016 was $31.1 billion in 2016 (ranked No. 50, the smallest among all states), recording 0.8 percent growth (ranked No. 35) from the prior year.

The Green Mountain State had 45,316 small and mid-size businesses, ranking the state No. 49 overall.

CNBC America's Top States for Business ranked Vermont's economy No. 37 for its growth prospects.

With 254 solution providers in the state, Vermont was ranked No. 4 on the solution provider competitive saturation index.

Worst States No. 47: North Dakota

North Dakota's GDP in 2016 was $52.1 billion in 2016 (ranked No. 45), recording a 6.5 percent decline (ranked No. 50, the worst among all states) from the prior year.

The Peace Garden State had 50,810 small and mid-size businesses, ranking the state No. 47 overall.

CNBC America's Top States for Business ranked North Dakota's economy No. 40 for its growth prospects.

With only 208 solution providers in the state, North Dakota was ranked No. 2 on the solution provider competitive saturation index.

Worst States No. 48: West Virginia

West Virginia's GDP in 2016 was $73.4 billion in 2016 (ranked No. 40), recording a 0.9 percent decline (ranked No. 46) from the prior year.

The Mountain State had 66,919 small and mid-size businesses, ranking the state No. 43 overall.

CNBC America's Top States for Business ranked West Virginia's economy No. 50, the worst among all states, for its growth prospects.

With 262 solution providers in the state, West Virginia was ranked No. 5 on the solution provider competitive saturation index.

Worst States No. 49: Alaska

Alaska's GDP in 2016 was $50.7 billion in 2016 (ranked No. 46), recording a 5.0 percent decline (ranked No. 49, behind only North Dakota) from the prior year.

The Last Frontier State had 47,825 small and mid-size businesses, ranking the state No. 48 overall.

CNBC America's Top States for Business ranked Alaska's economy No. 47 for its growth prospects.

With 291 solution providers in the state, Alaska was ranked No. 6 on the solution provider competitive saturation index.

Worst States No. 50: Wyoming

Wyoming's GDP in 2016 was $37.9 billion in 2016 (ranked No. 49), recording a 3.6 decline (ranked No. 48) from the prior year.

The Cowboy State had 34,537 small and mid-size businesses, ranking the state No. 50 overall – the fewest number among all states.

CNBC America's Top States for Business ranked Wyoming's economy No. 43 for its growth prospects.

With only 192 solution providers in the state, Wyoming was ranked No. 1 on the solution provider competitive saturation index.