The Best And Worst States For Business Opportunities

The Top And Bottom Five

CRN's analysis of the best and worst states to start a solution provider business used many factors to determine which states offer the most business opportunities, such as the number of both businesses in a state and fast-growing businesses as a share of total businesses. Other metrics include a state's economic strength and diversity, business' access to capital, residents' access to broadband communications, a state's rank for high-wage traded services (service sector employment with average wages above the national median) and manufacturing value added rank (the value added in manufacturing processes by a state's industries). Weighted to reflect importance to solution providers, the criteria were based on the results of a February 2013 survey of 250 technology solution providers. The first five states have the highest business opportunity scores (No. 5-No. 1), followed by the worst (No. 46-No. 50). Data sources include The Information Technology & Innovation Foundation's 2012 State New Economy Index report, the U.S. Census Bureau's American Community Survey and Federal Cost of Living Index, CNBC, and the U.S. Bureau of Labor Statistics.

Best States No. 5: Massachusetts

While Massachusetts is ranked No. 14 for the number of businesses in the state, it's No. 2 for fast-growing firms. It's also among the top states in terms of economic expansion and development factors, is ranked No. 12 for economic diversity, and has respectable grades for it's economic strength.

The Bay State is No. 9 for high-wage traded services and No. 16 for manufacturing value added. And, it's No. 2 for residents' access to broadband communications.

Best States No. 4: Georgia

Georgia is ranked No. 10 for its number of businesses and No. 14 for fast-growing firms. It's score for economic expansion/development is good, but it's ranked only No. 35 for economic diversity, and it's in the bottom 30 percent among all states for economic strength.

The Peach State is No. 10 for high-wage traded services and No. 14 for manufacturing value added. And, it's No. 20 for residents' access to broadband communications.

Best States No. 3: Arizona

Arizona is ranked No. 21 for its number of businesses and No. 17 for fast-growing firms. Its score for economic expansion/development criteria is in the middle among all states, but it's ranked only No. 39 for economic diversity and in the bottom 20 percent of all states for economic strength.

The Grand Canyon State is No. 16 for high-wage traded services and No. 8 for manufacturing value added. And, it's No. 10 for residents' access to broadband communications.

Best States No. 2: Utah

Utah is ranked only No. 32 for its number of businesses, but it's ranked an impressive No. 4 for its fast-growing firms. Its scores for economic diversity and economic strength are middling and it's in the bottom 30 percent for economic expansion factors.

The Beehive State is No. 1 for manufacturing value added and No. 14 for high-wage traded services. And, it's No. 12 for residents' access to broadband communications.

Best States No. 1: Delaware

Tiny Delaware is ranked only No. 46 for number of businesses, but it ranks an impressive No. 7 for fast-growing firms. Its score for economic expansion/development is near the middle among all states, and it's ranked No. 10 for economic diversity. But, the state gets a low score for economic strength.

The First State is No. 1 for high-wage traded services and No. 22 for manufacturing value added. And, it's No. 1 for residents' access to broadband communications.

Worst States No. 46: South Dakota

South Dakota is ranked No. 45 for the number of businesses based in the state and No. 42 for fast-growing companies. The state is No. 24 for economic diversity and is among the bottom scorers for economic expansion and development. But, it's among the top states for economic strength.

The Mount Rushmore State is No. 34 for high-wage traded services and No. 50 -- dead last among the states -- for manufacturing value added. The state is No. 30 for residents' access to broadband communications.

Worst States No. 47: Montana

Montana is ranked No. 40 for the number of businesses based in the state and No. 33 for fast-growing companies. The state is in the bottom 30 percent for economic expansion and development criteria, but it's among the top 30 percent for economic strength.

The Treasure State is No. 49 for high-wage traded services and No. 30 for manufacturing value added. The state is No. 48 for residents' access to broadband communications.

Worst States No. 48: West Virginia

West Virginia is ranked No. 42 for the number of businesses based in the state and No. 44 for fast-growing companies. The state is ranked among the bottom states for economic expansion and development factors, and it's No. 28 for economic diversity. The state is in the middle of the pack for economic strength.

The Mountain State is No. 48 for high-wage traded services and No. 45 for manufacturing value added. The state is No. 31 for residents' access to broadband communications.

Worst States No. 49: Hawaii

Hawaii may be paradise for some, but it's not a great place for starting a solution provider business. The Aloha State is ranked No. 43 for both the number of businesses based there and for the number of fast-growing firms. And, it racks up middling scores for both economic expansion and development factors, as well as for economic strength. But, it's a poor No. 48 for economic diversity.

Hawaii is No. 39 for high-wage traded services and No. 46 for manufacturing value added. The state is No. 26 for residents' access to broadband communications.

Worst States No. 50: Wyoming

Wyoming is the least populous state, so it's no surprise the state is ranked No. 49 for the number of businesses based in the state (behind only Alaska) and for fast-growing companies (tied with Alaska). The Equality State is ranked No. 49 for economic diversity, and it's in the middle of the states for economic expansion and development factors. But, it gets good scores for economic strength.

Wyoming is No. 50 for high-wage traded services and No. 39 for manufacturing value added. The state is No. 32 for residents' access to broadband communications.