CRN 2016 Best States Methodology

For the fourth year CRN and CRN Research have crunched a whole lot of numbers to determine which U.S. states are the best and the worst for starting a solution provider business. The goal, as always, is to provide readers with a comprehensive view of the economic, business and channel climate in each state.

This year CRN took a slightly different approach to the project. Given the growing number of millennials (those born between 1980 and 2000) in the IT workforce – and in the channel – we focused this year's analysis on millennials who may be thinking about starting a solution provider business. Specifically, we looked at data for all 50 states to identify the best, the middling and the worst states for starting a solution provider company.

Each state was given a millennial factor rank comparing data that pertains more specifically to millennial entrepreneurs. Data included:

• Tech industry employment, tech business establishments and average tech industry wage (the CompTIA Cyberstates Report)
• Startup rate per 100,000 adults (the Kauffman Index: Startup Activity by State)
• Venture capital funding per 100,000 people (Nerdwallet: Most Entrepreneurial States)
• Population median age (the U.S. Census Bureau)
• Public transportation availability (the Center for Neighborhood Technology's AllTransit Performance Score)
• Median apartment rents (Apartmentslist.com)
• State gas taxes (the American Petroleum Institute & Gas Foundation)
• State policies for renewables and efficiency (the Database of State Incentives for Renewables & Efficiency)
• Quality of life (CNBC America's Top States for Business 2016)

This year's Best States analysis also incorporated many of the same criteria used in previous years – with the most up-to-date information available. The criteria fell into several broad categories including the education and experience level of a state's workforce, labor and business costs, and tax and regulatory burden. Data was also analyzed to rank states for their innovation and growth potential and business opportunities.

Information from the aforementioned CNBC America's Top States for Business 2016 was utilized in a number of places, including labor costs, education rank, economy state rank, economic expansion/development rank, technology and innovation rank, and cost of living. The CompTIA Cyberstates Report provided data for tech occupation job postings, percent of private sector workers employed by tech industry firms, and tech sector as a percent of total gross state product.

[Related: Best And Worst States For A New Generation Of Channel Entrepreneurs]

The U.S. Bureau of Labor Statistics was the source for a range of data including state unemployment rates, and union affiliation. U.S. Census Bureau data included median household income, while state GDP data came from the Bureau of Economic Analysis. And information about added jobs came from State Economic Snapshots – Joint Economic Committee – U.S. Congress.

Most of the state taxation data, including corporate, sales and personal income tax rates, came from The Tax Foundation's 2016 State Business Tax Climate Index and from the Small Business & Entrepreneurship Council June 2016 report.

Information about the percent of adults with bachelor's and advanced degrees came from the American Community Survey. Crime rate statistics came from a report by the Federal Bureau of Investigation.

The number of solution providers per state – and the solution provider competitive saturation rank – came from a database maintained by The Channel Company, the parent company of CRN.