2016 Best (And Worst) States For Business Opportunities For Solution Provider Startups

Opportunity Knocking

Launching a solution provider business often begins with an entrepreneurial idea. But beyond that initial spark a solution provider's success can hinge on available business opportunities such as the potential customer base, access to capital, availability of state programs that aid nascent businesses, and competition from other solution providers.

This year's Best States For Millennials to Start a Solution Provider Business analysis looked at business opportunity criteria that's worth adding to the "Which State?" consideration. They include the number of businesses in a state (U.S. Census), a state's economic ranking and access to capital for economic development (CNBC America's Top States for Business 2016), Small Business Administration loans per 100,000 people in 2015 (Nerdwallet: Most Entrepreneurial States), and a state's tech sector as a percentage of total gross state product (CompTIA Cyberstates Report).

The business opportunities segment of the Best States analysis also includes solution provider competitive saturation, based on data from The Channel Company solution provider database. This ranking (with the No. 1 state having the lowest solution provider competition and No. 50 the most competition) often runs counter to the other business opportunity criteria: States with otherwise poor business opportunity scores may have fewer solution providers against which a startup would compete.

The following are the 10 states with the highest rankings for solution provider business opportunities, 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: Michigan

Michigan's economy is ranked No. 7, and the state ranks No. 9 for the total number of businesses based in the state and No. 4 for its technology sector as a percentage of total gross state product.

The Great Lakes State is No. 4 for access to capital for economic expansion and development, but only No. 32 for state business incentive programs. And it's No. 14 for SBA loans per 100,000 residents in 2015.

With 4,070 solution providers in the state, Michigan is a relatively competitive No. 33 in solution provider competitive saturation.

Best States No. 9: Ohio

Ohio's economy is ranked No. 22 and the state ranks No. 8 for the total number of businesses based in the state, but only No. 43 for its technology sector as a percentage of total gross state product.

The Buckeye State is No. 9 for access to capital for economic expansion and development, and No. 9 for state business incentive programs. And it's No. 8 for SBA loans per 100,000 residents in 2015.

With 4,790 solution providers in the state, Ohio is a relatively competitive No. 37 in solution provider competitive saturation.

Best States No. 8: Texas

Texas' economy is ranked No. 1 and the state ranks No. 4 for the total number of businesses based in the state. It's No. 39 for its technology sector as a percentage of total gross state product.

The Lone Star State is No. 7 for access to capital for economic expansion and development, and No. 25 for state business incentive programs. And it's No. 29 for SBA loans per 100,000 residents in 2015.

With 11,424 solution providers in the state, Texas is a very competitive No. 42 in solution provider competitive saturation.

Best States No. 7: Minnesota

Minnesota's economy is ranked No. 17 and the state ranks No. 16 for the total number of businesses based in the state. It's No. 32 for its technology sector as a percentage of total gross state product.

The North Star State is No. 21 for access to capital for economic expansion and development, and No. 24 for state business incentive programs. And it's No. 9 for SBA loans per 100,000 residents in 2015.

With 3,155 solution providers in the state, Minnesota is a moderately competitive No. 39 in solution provider competitive saturation.

Best States No. 6: Utah

Utah's economy is ranked No. 3 and the state ranks No. 31 for the total number of businesses based in the state. It's No. 22 for its technology sector as a percentage of total gross state product.

The Beehive State is No. 24 for access to capital for economic expansion and development, and No. 37 for state business incentive programs. But it's No. 1 for SBA loans per 100,000 residents in 2015.

With 1,308 solution providers in the state, Utah is No. 28 in solution provider competitive saturation.

Best States No. 5: North Dakota

North Dakota has experienced a major boom and bust in recent years due to the ups and downs of the oil industry. The state's economy is ranked No. 26, but the state ranks only No. 46 for the total number of businesses based in the state. It's No. 24 for its technology sector as a percentage of total gross state product.

The Peace Garden State is No. 33 for access to capital for economic expansion and development, but No. 3 for state business incentive programs. And it's No. 11 for SBA loans per 100,000 residents in 2015.

With only 264 solution providers in the state, North Dakota is an attractive No. 6 in solution provider competitive saturation.

Best States No. 4: New York

New York's economy is ranked No. 10 and the state ranks No. 2 for the total number of businesses based in the state. It's No. 27 for its technology sector as a percentage of total gross state product.

The Empire State is No. 11 for access to capital for economic expansion and development, and No. 16 for state business incentive programs. And it's No. 26 for SBA loans per 100,000 residents in 2015.

With 9,126 solution providers in the state, New York is No. 23 in solution provider competitive saturation.

Best States No. 3: Colorado

Colorado's economy is ranked No. 2 and the state ranks No. 15 for the total number of businesses based in the state, a disproportionate percentage of them small, fast-growing companies that offer solution providers a substantial potential customer base. It's No. 5 for its technology sector as a percentage of total gross state product.

The Centennial State is No. 8 for access to capital for economic expansion and development, and No. 38 for state business incentive programs. And it's No. 12 for SBA loans per 100,000 residents in 2015.

But with 3,416 solution providers in the state, New York is No. 40 in solution provider competitive saturation.

Best States No. 2: Washington

Washington's economy is ranked No. 6 and the state ranks No. 13 for the total number of businesses based in the state. It's No. 6 for its technology sector as a percentage of total gross state product.

The Evergreen State is No. 10 for access to capital for economic expansion and development, and No. 10 for state business incentive programs. And it's No. 16 for SBA loans per 100,000 residents in 2015.

With 3,553 solution providers in the state, Washington is No. 36 in solution provider competitive saturation.

Best States No. 1: Massachusetts

Massachusetts's economy is ranked No. 18 and the state ranks No. 14 for the total number of businesses based in the state. It's No. 8 for its technology sector as a percentage of total gross state product.

The Bay State is No. 19 for access to capital for economic expansion and development, and No. 7 for state business incentive programs. And it's No. 7 for SBA loans per 100,000 residents in 2015.

But with 4,338 solution providers in the state, Massachusetts is a tough No. 44 in solution provider competitive saturation.

Worst States No. 41: New Hampshire

New Hampshire's economy is ranked No. 16, but the state ranks only No. 41 for the total number of businesses based in the state. And it's a low No. 46 for its technology sector as a percentage of total gross state product.

The Granite State is No. 43 for access to capital for economic expansion and development, and No. 38 for state business incentive programs. But it's a strong No. 5 for SBA loans per 100,000 residents in 2015.

While there are only 1,144 solution providers in the state, New Hampshire is No. 47 in solution provider competitive saturation, a tough state in which to launch a channel company.

Worst States No. 42: New Mexico

New Mexico's economy is ranked No. 38 and the state ranks No. 38 for the total number of businesses based in the state. It's No. 15 for its technology sector as a percentage of total gross state product.

The Land of Enchantment state is only No. 46 for access to capital for economic expansion and development, but No. 11 for state business incentive programs. And it's No. 39 for SBA loans per 100,000 residents in 2015.

With only 598 solution providers in the state, New Mexico is an attractive No. 13 in solution provider competitive saturation.

Worst States No. 43: Louisiana

Louisiana's economy is ranked a poor No. 46 and the state ranks No. 24 for the total number of businesses based in the state. It's No. 36 for its technology sector as a percentage of total gross state product.

The Pelican State is No. 30 for access to capital for economic expansion and development, and No. 28 for state business incentive programs. And it's a low No. 47 for SBA loans per 100,000 residents in 2015.

With 1,397 solution providers in the state, Louisiana is No. 14 in solution provider competitive saturation.

Worst States No. 44: Kentucky

Kentucky's economy is ranked No. 40 and the state ranks No. 29 for the total number of businesses based in the state. It's No. 25 for its technology sector as a percentage of total gross state product.

The Bluegrass State is only No. 38 for access to capital for economic expansion and development, and No. 25 for state business incentive programs. And it's No. 42 for SBA loans per 100,000 residents in 2015.

With 1,260 solution providers in the state, Kentucky is No. 18 in solution provider competitive saturation.

Worst States No. 45: Maine

Maine's economy is ranked only No. 49 and the state ranks No. 39 for the total number of businesses based in the state. It's No. 50 – dead last – for its technology sector as a percentage of total gross state product.

The Pine Tree State is No. 27 for access to capital for economic expansion and development, and No. 18 for state business incentive programs. But it's No. 10 for SBA loans per 100,000 residents in 2015.

Nevertheless, from a competitive aspect, Maine is an attractive No. 9 in solution provider competitive saturation with only 486 solution providers in the state.

Worst States No. 46: Alabama

Alabama's economy is ranked No. 48 and the state ranks No. 26 for the total number of businesses based in the state. It's No. 13 for its technology sector as a percentage of total gross state product.

The Yellowhammer State is No. 16 for access to capital for economic expansion and development, and No. 32 for state business incentive programs. But it's No. 44 for SBA loans per 100,000 residents in 2015.

With 1,351 solution providers in the state, Alabama is No. 17 in solution provider competitive saturation.

Worst States No. 47: Tennessee

Tennessee's economy is ranked No. 21 and the state ranks No. 22 for the total number of businesses based in the state. It's No. 41 for its technology sector as a percentage of total gross state product.

The Volunteer State is No. 17 for access to capital for economic expansion and development, but No. 43 for state business incentive programs. And it's No. 48 for SBA loans per 100,000 residents in 2015.

With 2,109 solution providers in the state, Tennessee is No. 26 in solution provider competitive saturation.

Worst States No. 48: Wyoming

Wyoming's economy is ranked No. 14, but the sparsely populated state ranks No. 49 for the total number of businesses based in the state. It's No. 30 for its technology sector as a percentage of total gross state product.

Financial resources are tight: The Equality State is No. 50 for access to capital for economic expansion and development, and No. 50 for state business incentive programs. It's No. 28 for SBA loans per 100,000 residents in 2015.

Wyoming does have one thing going for it. With only 189 solution providers in the state, it's No. 1 in solution provider competitive saturation – the state with the least competition for a solution provider startup.

Worst States No. 49: Arizona

Arizona's economy is ranked No. 15 and the state ranks No. 21 for the total number of businesses based in the state. It's a surprisingly low No. 49 for its technology sector as a percentage of total gross state product.

The Grand Canyon State is No. 28 for access to capital for economic expansion and development, and No. 43 for state business incentive programs. And it's No. 25 for SBA loans per 100,000 residents in 2015.

With 2,835 solution providers in the state, Arizona is No. 41 in solution provider competitive saturation.

Worst States No. 50: Nevada

Nevada's economy is ranked No. 37 and the state ranks No. 34 for the total number of businesses based in the state. It's No. 35 for its technology sector as a percentage of total gross state product.

The Silver State is No. 44 for access to capital for economic expansion and development, and No. 48 for state business incentive programs. And it's No. 23 for SBA loans per 100,000 residents in 2015.

With 1,077 solution providers in the state, Nevada is No. 29 in solution provider competitive saturation.