Baltimore, January 22, 2026
A recent study by WalletHub has revealed that Maryland is the 49th best state to start a business in 2026, just ahead of Rhode Island. High operational costs, particularly in labor and office-space affordability, have contributed to this low ranking, along with a lack of industry variety. Despite a highly educated workforce, Maryland faces significant barriers for new entrepreneurs. Florida was highlighted as the best state for starting a business, demonstrating more favorable conditions for growth and development.
Maryland Ranks Second-Worst for Starting a Business in 2026, New Study Finds
Baltimore, MD – A recent study by WalletHub has ranked Maryland as the 49th best state to start a business in 2026, placing it just ahead of Rhode Island. This positions Maryland as the second-worst state for new entrepreneurs in the nation.
The study evaluated all 50 states across 25 key indicators of startup success, including access to financing, labor costs, office rent, workforce availability, and economic growth. Maryland’s low ranking is primarily attributed to high operational costs and stagnant growth metrics. Specifically, the state ranked last (50th) for labor costs and 46th for office-space affordability. Additionally, Maryland placed 49th in industry variety, indicating a lack of diverse sectors to support new ventures.
Despite these challenges, Maryland offers a highly educated workforce, with 43% of adults holding a bachelor’s degree or higher. However, the high costs associated with hiring and maintaining physical locations create significant barriers for startups. Analysts suggest that states with lower corporate tax rates and more affordable real estate are more conducive to new business growth.
In contrast, Florida topped the list as the best state for starting a business in 2026, praised for its rapid growth in small businesses, lower corporate taxes, and a growing working-age population.
For Marylanders considering new ventures, the study highlights that while the state offers a high average length of workweek, external economic pressures like inflation and high entry costs remain primary obstacles to long-term survival.
Key Factors Influencing Maryland’s Business Climate
The WalletHub study sheds light on several factors impacting Maryland’s ranking:
- Labor Costs: Ranked at 50th nationwide, high labor costs serve as a significant barrier for potential startups.
- Office-Space Affordability: With a ranking of 46th, the cost of leasing commercial spaces inhibits entrepreneurial growth.
- Industry Variety: Maryland ranks 49th in industry variety, suggesting that a myriad of sectors is essential for stimulating new business opportunities.
Educational Advantages
While the overall environment is less favorable, it is notable that Maryland boasts a highly educated workforce, with 43% of adults holding a bachelor’s degree or higher. This aspect offers a potential competitive edge for innovative companies looking to tap into a skilled labor pool.
Comparative Analysis with Other States
As Maryland grapples with its challenges, states such as Florida demonstrate how reduced regulatory burdens and lower costs can foster a thriving startup ecosystem. Florida’s ranking as the top state for business creation signals a contrasting approach that Maryland might consider emulating.
Conclusion
The findings from the WalletHub study serve as a wake-up call for Maryland policymakers and local entrepreneurs. To enhance the state’s appeal and foster economic resilience, there must be an ongoing conversation around reducing operational costs and encouraging a more diverse industry landscape. Individuals looking to embark on new ventures in Baltimore and beyond are urged to support local businesses as they navigate these economic challenges and seek innovative solutions to thrive.
Frequently Asked Questions (FAQ)
What is WalletHub’s ranking of Maryland for starting a business in 2026?
WalletHub ranked Maryland as the 49th best state to start a business in 2026, placing it just ahead of Rhode Island.
What factors contributed to Maryland’s low ranking?
Maryland’s low ranking is primarily due to high operational costs and stagnant growth metrics, including ranking last for labor costs and 46th for office-space affordability.
How does Maryland’s workforce compare nationally?
Maryland boasts a highly educated workforce, with 43% of adults holding a bachelor’s degree or higher, which is above the national average.
Which state was ranked the best for starting a business in 2026?
Florida was ranked the best state for starting a business in 2026, praised for its rapid growth in small businesses, lower corporate taxes, and a growing working-age population.
What challenges do Maryland entrepreneurs face according to the study?
Entrepreneurs in Maryland face challenges such as high operational costs, inflation, and high entry costs, which are significant obstacles to long-term survival.
Key Features of Maryland’s Business Climate in 2026
| Feature | Maryland’s Ranking | National Ranking |
|---|---|---|
| Overall Business Climate | 49th | 50th |
| Labor Costs | 50th | 50th |
| Office-Space Affordability | 46th | 50th |
| Industry Variety | 49th | 50th |
| Workforce Education Level | 43% with Bachelor’s Degree or Higher | Above National Average |
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