If you’re thinking about where to build a business, you’re not alone. Each year, states across the U.S. compete for the title of the best place to start and grow a company. Why? Because businesses bring jobs, growth, and innovation. And some states have figured out how to make themselves more attractive to companies.
In 2024, CNBC ranked all 50 states based on a wide range of factors, including workforce quality, infrastructure, cost of doing business, and more. It’s a complicated equation, but the results are clear: certain states are winning.
What Makes a State Good for Business?
It’s easy to say that some states are “business-friendly.” But what does that really mean? The CNBC rankings break it down by looking at 128 metrics across 10 broad categories. These categories include things like infrastructure (how easy it is to move goods and people), the economy (is it growing?), and access to capital (can businesses get the money they need?). And then there’s workforce quality, which is critical. If you don’t have skilled workers, even the best infrastructure won’t help.
Take Virginia, for example. Virginia was ranked the top state for business in 2024. Its strong infrastructure and a highly skilled workforce are a big part of the reason for that. Virginia has been investing in things like broadband access and transportation networks, which makes it easier for businesses to operate. But they’ve also focused on workforce development, offering programs like the Virginia Talent Accelerator Program. This program provides custom workforce training at no cost to businesses, which is a huge selling point for companies looking to expand or relocate.
1. Cost of Doing Business
Businesses care a lot about costs—whether it’s taxes, utility rates, or the price of real estate. Places like Texas and Florida have built their reputations on being affordable. Texas, for instance, doesn’t have a state income tax, which is why both companies and workers love it there. But it’s not as simple as “cheaper is better.” Some states, like New York, are incredibly expensive to operate in, yet they still attract companies. Why? Access to capital, talent, and a massive market make it worth the cost. Companies are willing to pay more if they get more in return.
The trick is finding the right balance. States like Virginia and Texas keep costs relatively low while offering strong infrastructure and workforce development. This is the sweet spot. Low costs combined with high-quality services and access to skilled workers—businesses take notice when a state hits that balance.
2. Workforce is Everything
If there’s one thing businesses care about more than anything else, it’s people. You can have the best roads and lowest taxes, but your business will struggle if you don’t have skilled workers. This is why workforce quality is one of the most heavily weighted categories.
Virginia, North Carolina, and Texas consistently rank high in this area. Virginia, in particular, has focused on training workers for high-demand fields like tech and advanced manufacturing. The state’s Tech Talent Investment Program is designed to produce 31,000 additional computer science graduates over 20 years. This focus on creating a pipeline of skilled workers is a big reason why companies like Amazon, Boeing, and Northrop Grumman have chosen to invest billions of dollars in the state.
3. The Role of Local Government
One of the often-overlooked aspects of building a business-friendly state is the role of local government. Some states have “business-friendly” governments that actively work to attract and support businesses. This isn’t just about low taxes or fewer regulations, though those things help. It’s also about creating an environment where businesses can thrive by cutting red tape and providing incentives for growth.
North Carolina is a good example. The state has simplified its regulatory environment and offers a range of tax incentives for businesses that relocate or expand there. As a result, North Carolina has consistently ranked as one of the top states for business in recent years.
Smart cities are also playing a role in making states more attractive to businesses. States and cities that invest in digital transformation—things like public Wi-Fi, digital permitting processes, and smart traffic systems—are making it easier for businesses to operate efficiently. These digital tools, like the one Cocoflo built, help businesses cut costs, streamline operations, and improve communication with customers and local governments.
4. Quality of Life
Quality of life may not be the first thing a business considers, but it becomes crucial when attracting top talent. People want to live in places where the schools are good, healthcare is accessible, and there’s something to do on the weekends. This is where states like North Carolina and Georgia excel. They offer more than just a business-friendly environment—they offer great places to live.
The appeal is obvious. Companies know that to bring in top talent, they can’t just offer competitive salaries—they have to offer a place where people actually want to stay. Florida is another example. Sure, it’s a low-cost state with no income tax, but it also offers great weather, world-class beaches, and a solid tourism industry. People want to live there, and that makes it easier for companies to attract and keep employees.
10 Most Business Friendly States in the U.S.
Here is a list of the Top States for Business in 2024. These states are rated across various metrics such as workforce quality, infrastructure, economy, and business friendliness.
1. Virginia
Virginia has figured out something that many states struggle with: balance. It maintains a highly skilled workforce while supporting businesses with strong infrastructure. You can see the results in how companies flock to the state, relying on its educated talent pool.
And it’s not just the people. Virginia’s logistics infrastructure is a huge draw for businesses needing efficient ways to move goods. The state understands how to keep things smooth—its government works well with industries, offering policies that make growing easier without getting caught up in red tape. That’s something a lot of states talk about, but Virginia actually does it.
2. North Carolina
North Carolina figured out that if you want businesses to succeed, you need to align what’s happening in universities with what industries need. They’ve built this close collaboration, which shows in their workforce quality.
But North Carolina doesn’t stop there. The state knows how to keep businesses happy with supportive policies, like tax incentives, making it easier for companies to grow. It’s also got an evolving economy, especially in tech and finance, making it a compelling place to set up shop.
3. Texas
Texas is all about scale. It has the kind of infrastructure that other states dream of—massive and well-developed. Roads, ports, rail networks—Texas has it all. And with its no state income tax policy, it becomes even more appealing.
The energy, technology, and manufacturing sectors are booming here, which keeps its economy diverse and strong. The one thing Texas doesn’t do as well is workforce development. There’s a gap between the scale of its infrastructure and the quality of its talent pool, but even with that, Texas remains a giant on the business landscape.
4. Georgia
Georgia has positioned itself as a key player, especially regarding logistics. Atlanta is a major transportation hub, giving Georgia a serious edge. Infrastructure here is built to keep goods moving, which is why so many distribution-heavy businesses set up shop.
Georgia also has a pretty skilled workforce that benefits from a solid education system. That combination makes Georgia a smart choice for companies looking for growth and reach.
5. Florida
Florida is growing fast, not just because of the sunshine. The state’s economy is booming, largely driven by tourism, agriculture, and a rapidly expanding tech sector.
Florida’s lack of a state income tax is another big reason businesses are drawn to it. But here’s the catch: Florida’s workforce isn’t as strong as other top states, and that’s something companies have to consider. Still, with such a business-friendly climate, Florida remains a top option for companies looking to scale quickly.
6. Minnesota
Minnesota offers something a little different. It has a highly skilled workforce, thanks largely to its strong education system, which has particularly benefited the healthcare and tech industries.
Infrastructure in Minnesota is decent—not the best, but good enough to support long-term growth. However, Minnesota is a bit more expensive regarding the cost of doing business, which could be a factor for companies keeping an eye on their bottom line.
7. Ohio
Ohio’s strategy is straightforward: keep costs low and make it easy for businesses to operate. The state has invested heavily in infrastructure improvements, and it’s working.
Ohio offers one of the most affordable environments for businesses, making it a great choice for companies that want to minimize expenses. The state’s growing economy and focus on workforce development are helping it compete with bigger, more expensive states, especially for businesses looking to stretch their dollars.
8. Tennessee
Tennessee is on a roll right now, particularly in Nashville. The state’s economy is growing fast, driven largely by booming healthcare and tech sectors.
Tennessee also offers a low-cost environment, making it a good option for businesses looking for affordability without sacrificing growth potential. The combination of economic opportunity and affordability makes Tennessee one of the more appealing places for companies to consider right now.
9. Michigan
Michigan is a state in transition. Manufacturing has always been its strength, and while the state has faced some economic challenges in recent years, it’s investing in both workforce development and infrastructure. That investment is starting to pay off, particularly in the automotive and manufacturing sectors. Michigan is rebuilding, and it’s starting to look like a more attractive option for companies in industries that rely on manufacturing.
10. Washington
Washington is where technology and innovation thrive. The state has a highly skilled workforce, especially in tech-related fields, and that’s why some of the biggest tech companies in the world are based here.
The infrastructure isn’t perfect, but it’s good enough to keep up with the demands of a growing, tech-driven economy. Washington offers an environment where businesses can be at the forefront of innovation, making it a compelling choice for companies looking to be part of the next big thing.
Why Digital Infrastructure is the Key to State Competitiveness
Digital transformation isn’t optional anymore—it’s essential for any state that wants to stay competitive. More and more, the states that embrace digital transformation are giving their businesses a real edge. It’s obvious when you look at cities implementing smart infrastructure. They work better, are easier to navigate, and make life smoother for everyone involved. Businesses need digital infrastructure to thrive, and when states provide that, everyone benefits.
Enter platforms like Cocoflo, which are accelerating this shift. Cocoflo’s cloud-based tools are modernizing city services. Residents can pay bills, apply for permits, or receive real-time emergency updates—all through their phones. It sounds simple, but that’s the practical change Cocoflo is enabling.
And this is more than just convenient for citizens. Businesses feel the impact, too. Businesses don’t have to jump through hoops when the local government runs efficiently. They get their permits, pay taxes, and stay updated without being bogged down in administrative delays. This is the kind of transformation that makes a state more appealing for companies looking to set up shop.
But there’s a bigger financial angle. Digital transformation also drives down costs. Automating tasks and creating transparency reduces the cost of government operations. And when governments save money, that can translate into lower taxes and fewer business fees. This is where the real opportunity lies—states that leverage digital tools will have a strong advantage over those that don’t.
