CALIFORNIA – A new report, published December 10, found that California ranked #2 among states where new businesses are most likely to succeed.
The analysis explores the states where new businesses are most likely to survive their earliest years based on the latest data from the U.S. Bureau of Labor Statistics (BLS).
According to recent BLS data, about 79% of businesses survive their first year, making it the most difficult period for startups. However, for businesses that survive their first year, roughly 85% make it to the next.
The findings reveal important insights into how location and time impact the chances of business success.
States with the best business survival rates
The report says California ranks second, with survival rates of 86.0% in the first year, 89.8% in the second, and 91.4% in the third.
California’s strong economy, innovation hubs, and access to venture capital contribute to its high ranking despite challenges such as high costs of living and regulatory complexities.
The top ranked state is Washington. Businesses in the state had an 86.4% chance of surviving their first year, 89.3% in their second year, and a 91.8% in their third year.