Washington State Tops Startup Survival Rates But Faces Hurdles

The small business climate is pretty tough right now all through the United States if you're thinking of starting a new business and wondering if you've got a shot, one of the things you might want to check out is the Patriot Software 2025 startup index. 

According to Patriotsoftware.com,
‘The Patriot Software 2025 Startup Index ranks all 50 states on business-friendliness, using three critical measures: one-year survival rates for new businesses, LLC filing fees, and state tax climate rankings. Together, these factors paint a clear picture of the best states to start a business, and states that present a greater challenge.’ 

The overall index rating is based on several different criteria. The one-year startup survival rate, the cost of LLC filing fees, and the tax climate. 

Washington State comes up number one in one of these categories. 

Looking at the overall rating, South Dakota actually comes in at #1 on the index. Followed by North Dakota, Montana, Florida, Wyoming, Indian, with Washington state coming in at #7. 

On the bottom end of the scale. 

At #45 you have Vermont. Followed by Hawaii, New York, Connecticut, Minnesota and at #50 Massachusetts. 

But I think the index rating doesn't tell the whole tale. When it comes to a new business surviving, Washington state comes up number 1. Between 2023 and 2024, 86.4 percent of new businesses survived through their first year. That is the highest survival rate of any U S state. 

The thinking is that Washington state has a great talent pool. Venture capital is easier to come by, and Washington state fosters a culture of innovation. 

The downside of starting a business in Washington state is the tax situation. The state ranks number 35 in the tax climate category, and Washington also has the highest minimum wage in the country right now. 

To my way of thinking the single biggest problem with any new business is under capitalization. You start your business with big dreams, thinking that everybody's going to beat a path to your door. But if you don't have enough money in the bank to keep yourself running for at least five years, you may be in trouble. 

Washington state needs new small businesses. If you've got a great idea. If you've figured out how to “build a better mouse trap”. Find the funding and make it happen.
Best States to Start a Business | Patriot 2025 State Startup Index