1. Indiana 6. Michigan

2. Connecticut 7. Ohio

3. Pennsylvania 8. Louisiana

4. Massachusetts 9. Illinois

5. New York 10. Minnesota

A state's eagerness to help small companies can't make up for a basic lack of capital. Increasingly, however, states are choosing to exercise whatever influence they can muster to create better environments for smaller companies.

As in past years, INC. surveyed the 50 states to determine the levels of official small business support. We measured "support" in terms of whether or not states had small business assistance offices, ombudsmen, governor's advisory councils, legislative committees, statewide conferences, and procurement set-asides for small businesses.

Two years ago, only 29 states had advisory councils on small business; this year, 42 states have them. Similarly, the number of legislative committees on small business has jumped from 26 in 1982 to 33 this year.

The states that made this year's top 10 not only offered all six programs, but also demonstrated energetic efforts to expand existing programs and add new ones. Seven of last year's top 10 -- Pennsylvania, Michigan, New York, Illinois, Indiana, Massachusetts, and Ohio -- maintained the types of initiatives that put them on the list last year. Indiana's advancement from #6 last year to #1 reflects its ongoing efforts to upgrade both its ombudsman's office and the governor's advisory council. Connecticut's placement in the #2 spot is a result of having set up a new advisory council and two legislative committees on small business. Massachusetts, Illinois, and Pennsylvania each expanded or revamped existing programs to better serve the needs of the small business sector. Of all the 50 states, only Wyoming continued to report that it had none of the programs INC. was looking for.