If you’re thinking about starting a business in Washington this year, the odds might be tougher than you think.

A new study has labeled Washington as the worst state in the country for business survival, with more than half of new ventures failing within their first five years. The analysis, conducted by Ringy, tracked businesses across the U.S. from 2019 to 2024. While the national average for survival is about 51%, Washington fell far behind at just 41.1%.

Out of the 22,326 businesses that opened their doors in 2019, only 9,183 were still running by 2024. This dismal success rate put Washington at the very bottom of the rankings, sitting behind Missouri and the District of Columbia.

In contrast, West Virginia took the top spot in the nation. A new business in West Virginia has a 57.6% chance of making it to the five-year mark, which is 16.5% higher than the odds for a business owner in Washington.

Competition vs. survival

Interestingly, the study found that having a huge number of new businesses doesn’t guarantee a healthy environment.

California saw a massive 139,250 businesses start in 2019 and still managed to keep over 54.6% of them alive. Alaska had very few startups (only 1,071) but saw a high survival rate of 56%.

Washington sits in a difficult middle ground, with a high volume of people trying to start businesses but very few of them lasting long-term.

What makes the difference?

Carlos J. Correa, Chief Operating Officer at Ringy, noted that where you choose to set up shop can change everything. He suggested that states with higher success rates often have lower operating costs, less overwhelming competition, or more supportive local government policies.

“The five-year mark represents a critical milestone,” Correa explained. “Companies that survive their first five years have typically established solid customer bases and operational efficiencies.”

For Washington entrepreneurs, the data is a reminder that the first few years are an uphill battle. While the state is known for its big-name tech giants, small businesses are finding it increasingly difficult to stay afloat in the current economic landscape.

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