The 10 Best States To Do Business In

Location, Location, Location

Entrepreneurs starting their own solution provider companies give considerable thought to critical aspects of their business, from which IT vendors to partner with to how the startup will be financed. But they might not be thinking deeply enough about one very critical question: Where should my new business be based?

For the second year CRN Research has analyzed data on all 50 states, from the availability of experienced workers to business opportunities, from business costs to taxes and regulations. Based on that analysis we've ranked the states according to how business-friendly they are.

Here's a look at the 10 states that came out on top as the best states to do business in.

No. 10: Minnesota

Solution Provider 500 Companies: 16

Minnesota was ranked No. 2 for business opportunity in the CRN analysis. That may be due to the state's proximity to North Dakota and the economic boom in the northern Plains states fueled by the oil rush. Minnesota's GDP was 2.8 percent in 2013.

But the North Star State can be an expensive place to do business. It was ranked No. 44 for labor costs and No. 40 for taxes and regulations. On the plus side, its educated and experienced workforce was No. 13 among the states and the state ranked No. 17 for overall innovation and growth.

No. 9: Oregon

Solution Provider 500 Companies: 3

Oregon scores well for both business opportunity (No. 13) and innovation and growth (No. 16). And it offers the educated, experienced workforce (ranked No. 17) to make those business and growth opportunities possible.

The Beaver State's labor costs are relatively high (No. 33) while its ranking for taxes and regulations (No. 27) is in the middle of the pack among all states.

No. 8: Maryland

Solution Provider 500 Companies: 21

Maryland's workforce is ranked No. 2 for education and experience, second only to Vermont's workforce. But at No. 47, Maryland's labor and employment costs are among the highest in the country.

The Old Line State is No. 4 for overall innovation and growth and No. 12 for business opportunities – being part of the fast-growing Washington D.C. area is a plus. But the state's personal cost-of-living ranking (No. 43) makes it among the more expensive areas of the country to live.

No. 7: Texas

Solution Provider 500 Companies: 22

Texas has had one of the fastest growing economies in recent years – GDP growth in 2013 was 3.7 percent – and that led to the Lone Star State having the highest ranking (No. 1) for business opportunity. And it's ranked No. 8 for innovation and growth.

Texas has relatively low labor costs (No. 21), but the education and experience levels of its workforce are quite low (No. 39).

No. 6: Massachusetts

Solution Provider 500 Companies: 12

Massachusetts has some of the most educated, experienced workers in the country (No. 4), but it also has some of the highest labor and employment costs (No. 48). The Bay State is ranked No. 2 for innovation and growth, second only to California.

And while Massachusetts is ranked No. 10 for business opportunity, its No. 42 ranking for taxes and regulatory environment can give entrepreneurs pause. Massachusetts, for example, recently raised its minimum wage to $9 per hour in 2015 – highest among all the states. But the state is also lowering its unemployment insurance rates.

No. 5: California

Solution Provider 500 Companies: 33

California is considered the technology mecca of the country and that's reflected in its No. 1 ranking for innovation and growth and No. 8 ranking for business opportunity.

But doing business in California isn't cheap. It's ranked No. 38 for employment and labor costs and No. 42 for personal cost of living. And the Golden State's No. 26 rank for taxes and regulations puts it in the middle of the pack.

No. 4: Washington

Solution Provider 500 Companies: 6

Washington is ranked No. 12 for the overall education and experience level of its workforce – not surprising given that it's home base for Microsoft and other software developers. The state is also ranked No. 3 for overall innovation and growth.

The Evergreen State scores well for business opportunity (No. 7). But it's more expensive than many states in terms of labor (No. 28) and taxes and regulations (No. 30).

No. 3: Utah

Solution Provider 500 Companies: 1

Utah, last year's No. 1 state in the CRN Best States analysis, is still a great place to start and grow a solution provider business. It's ranked No. 1 for its low taxes and business-friendly regulatory environment and No. 4 for business opportunity.

The education and experience of the Beehive State's workforce is ranked No. 28 and the state's overall ranking for innovation and growth is No. 9, both down a number of spots from 2013.

No. 2: Colorado

Solution Provider 500 Companies: 15

The Front Range area is one of the fastest growing regions of the country and Colorado had GDP growth of 3.8 percent in 2013. So it's not surprising the state is ranked No. 3 for business opportunity.

The Centennial State is ranked No. 6 for innovation and growth and its workforce is ranked No. 7 for its high education and experience levels. The state's tax and regulatory burden is ranked No. 20 while labor and employment costs are ranked No. 31.

No. 1: Virginia

Solution Provider 500 Companies: 46

With a business opportunity rank of No. 5 and an educated workforce ranked no. 3, Virginia tops this year's CRN analysis of the best states to start and grow a solution provider business.

The Old Dominion State, which was No. 2 in the 2013 state rankings, also boasts an environment that fosters innovation and growth (No. 7) and places a relatively light tax and regulatory burden on businesses (No. 10).

One potential downside: As the Washington D.C./northern Virginia becomes an increasingly expensive place to live and work, Virginia's already mediocre rating for labor and employment costs (No. 34) could become increasingly uncompetitive.