Michigan Among America’s Most Resilient States for Small Businesses

Charming General Store in Holland, Mi.|Photo by fish socks

Article courtesy of Franchise Opportunities.

• West Virginia tops national rankings as nearly 6 in 10 new businesses survive through 2024
• Michigan saw 16,777 new businesses formed in 2019, with 9,042 still operating in 2024
• Washington bottoms out with just 41.1% of businesses surviving their first five years

West Virginia ranks as America’s best state for new business survival, according to findings by Franchise Opportunities.

The comprehensive analysis examined Bureau of Labor Statistics data across all 50 states plus Washington D.C., tracking which regions offered the strongest foundation for business longevity between 2019 and 2024.

Michigan ranked 11th,

with 53.9% of its 2019 startups still operating in 2024. The state launched 16,777 new businesses during that period, placing it among the top 20 in total formations, and maintained a survival rate above the national average of approximately 51%. This performance highlights Michigan as a strong environment for entrepreneurs looking to sustain their ventures over the critical first five years.

West Virginia topped the charts with 57.6% of businesses surviving five years after formation. Small ventures launching in the Mountain State face significantly better odds of weathering early challenges that typically force closure, giving local entrepreneurs a distinct advantage over business owners elsewhere in the country.

Connecticut scored 57.5% business survival, trailing West Virginia by a razor-thin 0.1 percentage point for second place nationally. The Northeast showed strong overall performance in the rankings, with Pennsylvania securing a top-five position at 56.0% survival rate.

Alaska matched Pennsylvania’s 56.0% business survival figure to share third place. The northern state achieved this impressive result despite recording only 1,071 new business formations in 2019 – the second-lowest total among all states evaluated in the study.

Midwestern states dominated many top positions in the rankings. Ohio and South Dakota both reached identical 55.0% survival rates to tie for fifth place. Illinois followed closely at seventh position with 54.9% of businesses still operating five years after launch.

California saw 139,250 new business formations in 2019 – more than any other state – yet still maintained a 54.6% survival rate for eighth place nationally. These figures challenge common assumptions that highly competitive markets necessarily reduce business survival chances.

North Carolina and Minnesota rounded out the top ten with survival rates of 54.4% and 54.2%, respectively. The geographic and economic diversity among these high-performing states demonstrates business sustainability remains possible across widely varying environments.

Table: Top 10 States with Highest Business Survival Rates (2019-2024)

Washington ranked last among all states with a dismal 41.1% five-year business survival rate. Just 9,183 businesses remained operational by 2024 from 22,326 formed five years earlier in the Pacific Northwest state.

Missouri and the District of Columbia joined Washington at the bottom of rankings with survival rates of 43.2% and 44.7%. A massive 16.5 percentage point gap separates Washington from chart-topping West Virginia, revealing striking regional disparities in business sustainability.

The analysis found limited correlation between total businesses launched and survival rates. States launching modest numbers of new businesses, like Alaska (1,071) and West Virginia (2,663) achieved stronger survival rates than states with enormous volumes of new ventures, including Florida (64,120) and New York (42,471), which recorded rates of 50.1% and 49.5%.

Commenting on the findings, Thomas Jepsen from Franchise Opportunities said:

“What this study shows is that having your business succeed is no small achievement. There are places in America where it seems that the odds are stacked against business owners and it may feel incredibly challenging to have a business that survives past the five year mark.

If your business resides in the likes of Connecticut, Pennsylvania or North Carolina, then the chances are that your business will succeed past five years, but if you’re in states such as Missouri, Idaho or Delaware, then it would be worth investing the time and resources into expert business advice to ensure your business doesn’t become a statistic.”

Methodology:

This study analyzed business survival rates across all 50 US states and the District of Columbia. Data was sourced from the Bureau of Labor Statistics’ Business Employment Dynamics dataset, specifically tracking businesses established in 2019 and measuring what percentage remained operational in 2024. Survival rates were calculated by dividing the number of surviving businesses in 2024 by the number of businesses formed in 2019.

Complete State Rankings by Business Survival Rate (2019-2024)

Source:

bls.gov/bdm/bdmage.htm#state