Is California a good state to start an online business? See where it ranked in new study
Launching an online business? California is among the top spots in the nation for entrepreneurs, according to Printful.
The print-on-demand company created a list of Best U.S. States to Start an Online Business, based on several key metrics including business survival rates, cost of living and corporate tax rates.
According to the Printful study, the best states for e-commerce are the ones that offer a business-friendly environment and strong technological infrastructure as well as a good work-life balance.
Virginia was No. 1 on Printful’s list of the best locations for online entrepreneurs, thanks in part to its blazing-fast average internet speed and its low cost of living.
“Nearly half ... of Virginia’s businesses established in 2019 have survived the last five years,” Printful said.
Colorado was No. 2 on the list and Texas took the third spot.
Here’s what can you expect when setting up an online business in California.
Why is California among best states in US for online business?
California was No. 4 on the list of the best states to start an online business, according to the Printful study.
“As the home of Silicon Valley, California has more co-working spaces than any other state,” with 856 options,” Printful said. “In Los Angeles alone, entrepreneurs can choose from 139 co-working locations.”
California ranked first in the nation for “balancing technology and lifestyle,” Printful said, and came in second place among U.S. states where online businesses enjoy a “favorable environment for achieving long-term success.”
Two of the top 15 U.S. cities for start-up companies and entrepreneurs are in California, according to web design company Crowdspring.
Tech companies including Square, Dropbox, Pinterest and Zynga are headquartered in San Francisco, Crowdspring noted, with Snapchat, Oculus and Riot Games call Los Angeles home..
Other tech companies that are headquartered in California include Apple, Uber, Meta, Instacart and Google.
Although California has the third-most data centers in the nation with 287, the Golden States lags behind when it comes to internet connectivity, according to Printful.
The average internet speed in California is 93 Mbps, Printful said, noting that online businesses in the Golden State may face challenges competing with those in areas that offer faster connectivity.
Which are the top states in the nation for online business?
These were the top 10 states to start an online business, according to Printful.
- Virginia
- Colorado
- Texas
- California
- Georgia
- Michigan
- Illinois
- North Carolina
- Arizona
- Florida
Where are the worst states in the nation for online business?
These were the worst 10 states to start an online business, according to Printful.
- Hawaii
- Maine
- Montana
- New Mexico
- Nevada
- Wyoming
- Alaska
- Mississippi
- Arkansas
- North Dakota
How did Printful come up with its rankings?
To find out which U.S. states are the best for online entrepreneurs, Printful looked at the following factors for each of the 50 states:
Number of co-working spaces
Five-year survival rate of businesses
Internet usage penetration
Average internet speed
Number of data centers
Average cost of living score
Business environment ranking
Corporate income tax ranking
Sources included Coworker.com, the U.S. Bureau of Labor Statistics, Statista, U.S. News & World Report and the Tax Foundation.
This story was originally published February 20, 2025 at 8:44 AM with the headline "Is California a good state to start an online business? See where it ranked in new study."
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