Florida No. 18 Most Expensive State for Small Businesses Amid Economic Uncertainty
A new study found Florida is the No. 18 most expensive state to start a business, an important revelation for small business owners deciding where to set up shop amid growing economic uncertainty.
The 10 cheapest states are in the West or Midwest as many levy no corporate taxes and have fewer regulations. The two most expensive states are California and New York due to higher taxes, wages, rents and regulations.
Succeeding as a small business owner is always difficult with 20% failing in the first year. It is perhaps even more challenging now as entrepreneurs are battling inflation, rising operating expenses, and uncertainty from tariffs and trade negotiations. In this climate, it may be more important than ever for business owners to set up shop in an affordable location.
Simplify LLC released a study on the Most and Least Expensive States to Start a Business in 2025 using the most recent data from the Bureau of Labor Statistics, Federal Reserve of St. Louis, Tax Foundation, and the Energy Information Administration.
The rankings were determined by analyzing nine key factors in all 50 states and D.C. including taxes, labor costs, commercial rent and utilities, regulations, lending, and more.
Key Findings:
• Florida No. 18 Most Expensive State: Florida faces a labor force participation of only 58.3% (#44) and a heavy regulatory environment with a total of 170,321 regulations (#41). Other costs remain average with electricity bills at $748.95 (#34), a $125 LLC fee (#31 tied), $66,435 wages (#31) and a 5.5% corporate tax rate (#23 tied). Florida excels in one area — SBA lending is $12.1 million per 100,000 residents (#3).
• 10 Cheapest States: Utah, South Dakota, Colorado, Wyoming, Montana, Idaho, Nebraska, Kansas, Nevada, and North Dakota.
• 10 Most Expensive States: A mix of big and small states. California, New York, Hawaii, Tennessee, Massachusetts, Alabama, New Jersey, D.C., Illinois, and West Virginia.
