When it comes to launching a business, location matters. And Minnesota might not be the spot to set up shop. At least, not according to a new study that ranks the best states for entrepreneurs in 2025.

Sad and worried entrepreneur with laptop
AntonioGuillem
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The study looked into six key factors to determine where businesses are most likely to succeed: corporate tax rates, inflation, consumer spending growth, job creation rates, and the migration of educated workers.

Before we dive into where Minnesota landed (brace yourself), let’s start with the top states for entrepreneurs. Leading the pack is Washington, followed by Texas, Maine, Nevada, Oregon, Florida, Rhode Island, Colorado, Vermont, and rounding out the top 10, Hawaii.

Minnesota Now One Of The Absolute Worst States For Entrepreneurs

While the Northstar state wasn’t exactly shining last year, things have taken a turn for the worse. The state tumbled 20 spots in the rankings!

SimplifyLLC blames the drop on a few things including consumer spending growth showing a major decline from last year and new business growth in the state tanking by a jaw-dropping 33.5 points.

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And if that wasn’t enough to make entrepreneurs wince, Minnesota also holds the title for the highest corporate income tax rate in the entire country at 9.8%.

Only two states, Iowa and Alabama, were considered worse than Minnesota for entrepreneurs. You read that correctly, Minnesota tumbled all the way to the bottom of the list to land at number 49! Ouch!

Also See: Minnesota Dominates James Beard Awards With 11 Restaurant Nominations

While Minnesota might be celebrated for its strong workforce and exceptional quality of life, the latest rankings paint a challenging picture for entrepreneurs aiming to start or expand a business here.

On a broader scale, booming business sectors are still paving the way for growth across the country. Retail is front and center, followed closely by professional, scientific, and technical services. Construction - spanning both residential and non-residential projects - is also driving significant opportunities.

Click here to read more about this study from SimplifyLLC.

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Highest-paying jobs in Minnesota that don't require a college degree

Stacker ranked the 50 highest-paying jobs in Minnesota that don't require a college degree, using annual compensation data from the Bureau of Labor Statistics.

Gallery Credit: Stacker

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