According to Forbes, there’s a record number of Americans starting small businesses due to a combination of job anxiety, AI disruption, and a fundamental shift in how workers think about risk.
In the US alone during 2025, there were over 5.9 million new businesses formed – an increase of 8% compared to 2024. And when you see that the US only added 116,000 jobs in 2025 compared to the 1.46 million in 2024, it’s no surprise that the number of new businesses has increased.
Given that job cuts in January 2026 were the highest recorded at the start of a year since 2009, it’s no wonder Forbes is calling it ‘The Great American Small Business Surge’.
With start-up businesses becoming more common, here at Pixartprinting, we’ve conducted research into the costs behind opening a business and identified the cheapest and most expensive states to start a new one! After putting together an index, we’ve ranked each US state with a score out of 100 to reveal the most affordable states to start a business.
Read on to discover some of the financial trials and tribulations many new business owners face across America.
The cheapest states for opening a store
To kick things off, let’s look at the three cheapest states to open a store in the US. To do this, we’ve taken a look at the average start-up cost, LLC (state filing fee) and sales tax of every state.
Taking the number one spot is Mississippi, scoring an impressive 98.6/100! Using a brick-and-mortar business as an example, the average start-up cost is $107,298. Mississippi also has the second-lowest LLC fees in the entire country ($50) and a sales tax rate of 7%.
Though businesses in certain industries need permits and professional licenses, they don’t need a state-level business license here. The cost of living in Mississippi is also the lowest in the US, reducing overall running costs.
West Virginia comes second on our index, ranking with an impressive score of 97.7/100. Opening a physical store here will have a similar start-up cost, averaging $109,384.
The LLC fees here stand at $100 – one of the cheapest in the entire nation – with a sales tax sitting at just 6%. West Virginia benefits new businesses thanks to having the lowest commercial rent and housing costs in the eastern US, and labor costs among the lowest in the nation. As a major energy producer, the state also benefits from relatively low electricity rates – especially when compared to other states east of Mississippi.
The third-cheapest state is Arkansas, scoring 95.1/100, where start-up costs for opening a store sit around $110,329 on average.
Businesses here only need to pay $45 in LLC fees – the lowest in the nation). Doing business in Arkansas is certainly cheaper than most other states in the US, especially given its more affordable real estate, competitive tax rates, and lower costs of labor.
The most expensive states for opening a store
Those may be the cheapest states, but now it’s time to look at the most expensive locations for opening a store in the US.
The state costing new businesses the most to set up is Hawaii, after scoring just 1.8/100. Should a business want to start up here, it would cost a staggering $188,154!
Though, LLC fees are just $50 and sales tax sits at 4%. One of the biggest reasons for the higher costs in Hawaii is that it is geographically isolated and a smaller market than other states. Because many of its products are imported, the cost of living is also higher, increasing overall business costs.
The second-most expensive state for new businesses is California, which scored 7.1/100. Here, new businesses are required to fork out $187,048 in start-up costs – just narrowly less than first-placed Hawaii.
The Golden State sees new business owners having to pay $70 in LLC fees and a steeper 7.25% sales tax as well. Despite the LLC fees initially seeming low, the $800 minimum franchise tax that’s due within 90 days makes costs much higher than they first seem. One big difference to Hawaii, however, is that California has a huge number of customers who are more willing to pay higher prices than in other states, somewhat negating the more expensive start-up fees.
Then the third-most expensive state for new companies is New York, scoring a significantly higher 24.5/100, albeit still a low figure. Start-up costs here are $172,925, which, although high, is still just under $15,000 less than California’s.
Though not the highest in the country, LLC fees are still costly as they stand at $200 and sales tax sitting at 4%. The Empire State sees such high business start-up costs due to a combination of things. For one, it has a complicated taxation system, but it also has a premium charge due to offering access to high-end consumers and global markets.
Initial branding costs for new businesses
Branding is one of the most important aspects of running a business. For new businesses, quality branding can help build credibility, establish a professional image, and make businesses instantly recognizable to customers. That’s why investing in branding early on is key.
Early branding likely encompasses things such as a logo, custom signs, custom packaging, promotional items, custom stickers and custom label printing. All of these are vital – especially when a business has little to no record. An effective brand will convey exactly what the business does, what the business stands for, and ensure a consistent message is communicated. This helps customers return to buy products and stay loyal, all while offering the opportunity to increase prices as the perceived product value may be higher.
Costs for branding, however, will vary depending on the type of business, meaning that it’s something owners will have to factor into their outgoings.
Businesses with the lowest initial branding costs
We found that bakeries often have the cheapest initial marketing costs, scoring a perfect 100. Branding costs for a bakery in the US are between $300 and $2,000, with the average spend on stickers and labels starting at $700.
Florists then come close behind, scoring 95.9 and having branding costs between $1,000 and $5,000. Their sticker and label prices sit at $600-$700, making them slightly cheaper than bakeries.
Then the third cheapest is pet grooming businesses, with a score of 92.9. Pet groomers will need to spend somewhere between $500-$10,000 on initial marketing across the US. But, with more affordable sticker and label prices of $600-$700, this helps reduce the financial burden.
Businesses with the highest initial branding costs
At the opposite end of the spectrum, restaurants are the most expensive business type for initial branding costs, ranking last with a score of 0. Anyone looking to start a restaurant will have to find between $17,500 and $75,000 for initial marketing costs! However, with stickers and labels costing just $700-$800, they’re similarly priced to the cheaper businesses.
Owners of laundromats will also need significant funds for branding, with costs initially ranging from $1,000 to $50,000. Though expensive, label and sticker costs are just $500-$600, which is a much more affordable sum.
Coffee shops are also an expensive starter business for branding, with their initial marketing costs sitting in the region of $8,000-$35,000. Like restaurants, coffee shops will need to pay in the region of $700-$800 for their labels and stickers.
How can Pixartprinting help start-up businesses?
We can clearly see that throughout the US, the costs of starting a business can differ drastically depending on where you’re located. Multiple factors must be considered, however, with customer base, market availability, and convenience all coming into play.
Regardless of the state a business chooses to begin in, however, the nature of the business will always dictate certain prices, such as the branding costs required to establish an image for the company and its products. No matter where the business is established or the industry it operates in, these costs can be daunting.
Here at Pixartprinting, we help new and existing businesses get off the ground and really develop an image for themselves. We offer a variety of different online printing services to help create a distinctive brand identity.
In just a few clicks, you can get the exact design you want, with help from our team of professional graphic designers. From designing your artwork to printing promotional products like flyers and leaflets, brochures, business cards, custom stickers, and custom roll labels, we’re here to help.
Methodology
This study converts start-up cost ranges into relative 0–100 affordability scores. Higher scores indicate lower estimated costs; rank one is the cheapest or best result within the states or business types included. We looked at the cost of physical businesses available in the dataset, which totals 14 business types and includes bakeries, florists, pet grooming businesses, catering businesses, yoga studios, ice cream shops, nail salons, hair salons, barbershops, food trucks, daycares, coffee shops, laundromats, and restaurants.
Data source: https://startcosts.com/