Why Do People Start Businesses in Every U.S. State?

People have various motivations for starting their businesses.

Some seek higher income. Others are looking for a balance between family life and career. In some situations, entrepreneurship may be the only way to fight unemployment.

In this infographic, OnDeck uses data from the U.S. Census Bureau’s 2020 Annual Business Survey to highlight the most unique reasons for why people start businesses in each U.S. state.

Editor’s note: The map tracks the most popular unique reasons to start a business. In this case, “unique” is defined by how much a particular reason stands out from the U.S. average across all states. For example, in Delaware, more respondents said they started businesses because they “couldn’t find jobs” (11.6%) than in any other state (U.S. average: 7.3%). So, even though it’s not numerically the most popular reason overall, it is the unique reason that stands out the most for that state.

According to the Global Entrepreneurship Monitor, entrepreneurship rates in the U.S. have been trending upward over the past two decades.

In fact, despite multi-billion dollar companies getting the spotlight, 99.9% of businesses across the U.S. are small businesses, employing over 60 million people.

Wanting to make more income is the biggest unique factor in starting a business in 14 states, including some of the states with the highest unemployment rates, like New Hampshire, North Dakota, and Alabama.

In Utah, a higher percentage (65.4%) of entrepreneurs start businesses to achieve a work-life balance than in any other state. Notably, Utah is known for having the largest average family size, as reported by the U.S. Census Bureau, and has a strong religious presence.

On the other hand, in Florida, more business founders (69.2%) start their businesses to become their own bosses than anywhere else.

New York and California are states where entrepreneurs mentioned that they couldn’t find a job as a key unique reason to start a business. In fact, both states lead as the worst for job seekers, as shown in another Visual Capitalist graphic.

Despite all the different reasons to start a business, the fact is that entrepreneurship is still crucial for the U.S. economy.

Over the last 25 years, small businesses have added over 12.9 million jobs. For perspective, that’s about two-thirds of the jobs added to the economy.

In 2021, a record-breaking 5.4 million new business applications were filed in the U.S.

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