High-performance Companies Live In High-performance States

 

Not surprisingly, there is a direct correlation between the location of the country's fastest-growing, smaller companies and those states with the most positive climate for small business. When we matched up the location of the INC. 200 firms for the last three years and the states that earned an A in our analysis, we found that the top 20% of the states spawned 43% of the fast-growing companies.

From another angle, the relationship between business climate and the concentration of emerging companies becomes more clear. The average number of high-growth firms per state (adjusted) ranges from a high of 12.4 per A state to a low of 0 per F states.

We've adjusted the high-growth-companies-per-state formula to account for two anomalies: New Jersey and Missouri. New Jersey, a D state, has a high number of INC. 200 companies (19) for the last three years. But we discounted that because the business climate probably does less for emerging companies than the state's location in the bustling Northeast corridor. And Missouri is an anomaly: its one INC. 200 company, Billings, only recently moved there from Utah. Because most of the company's growth took place in Utah, we can't really give the credit to Missouri.