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How Small Business Friendly is Your State?

For those of you in the United States, do you know how small-business friendly your state is? 

Uh-huh.  I thought so.  You don’t have a clue.

Then take a look at the Small Business Survival Index.  Every year the Small Business and Entrepreneurship Council [1] puts out a ranking of the 50 U.S. states plus the District of Columbia.  This year’s most small-business friendly state is South Dakota, followed by Nevada.  At the bottom of the list are New Jersey and the District of Columbia.  Here are the rankings:

Small Business Survival Index 2007

Click for larger chart [2] 

The Index measures 31 different government costs that affect small businesses and entrepreneurs.  The 31 costs include direct costs such as corporate tax rates and capital gains rates, as well as indirect costs including crime rates and number of government employees per capita.  

Important fact: between 2000 and 2006, the population in the top 25 states in the Index grew twice as fast as in the lower 26.  Yes, lower costs really do drive growth.

Get all the details by downloading the 2007 Small Business Survival Index report (PDF).