"This city and state were made for entrepreneurs," says John Rogers, whose Tech Counsel technology consultancy thrives on the robust small business community in Portland, Maine. In fact, 98% of state businesses have 100 employees or less, and 91% of the state's employers claim less than 20 workers. And there's no shortage of organizations to support such small companies, such as the Maine Technology Institute and the Resource Hub, where chef Rob Evans and his fiancé e, Nancy Pugh, met an adviser who helped them secure a $25,000 bank loan to buy Hugo's, a local restaurant, last year. "There's a lot of support and a great network for small businesses," says Pugh, who notes that the locally owned Coffee By Design seems more popular than Starbucks here. Since 1991, the city has leveraged $143 million in loans to start-ups and expanding small businesses -- the majority of which continue to flourish.

The same could be said about the lifestyle, enhanced by its envious location. "If you want to take off work early on a Friday afternoon and sail, you can," says Peter Murray, founder of software firm Quantrix, who left Silicon Valley seven years ago. Besides a picture-perfect waterfront, Portland boasts a bustling restaurant scene (including good sushi for a small town) and rich arts and cultural community. Young singles flock to the cobblestoned streets of quaint commercial district Old Port, on Casco Bay, where a two-bedroom apartment rents for about $950 per month. Nightlife, however, tends to be a bit sleepy -- many establishments close at 9 p.m., bars at 1 a.m. (and parking tends to be scarce and pricey). Families head to the Victorian buildings of the West End or less than 10 miles away to higher-end suburbs on the water like Falmouth or Cape Elizabeth, where the median price for a four-bedroom house is $342,000 to $370,000.

Six highways run through and around greater Portland. Some residents say they don't know what a traffic jam feels like ("Rush hour lasts 15 minutes," according to Rogers), but Portland International Jetport is served by only six airlines to 13 cities. You'll have to go to Boston (Amtrak's high-speed Downeaster train will get you there in under three hours) for more options.

Founded: 1632

Population: 63,000 (city); 270,000 (greater Portland)

Corporate income tax: 3.5 - 8.93%

Property tax (Corporate and personal): $25.72 per $1,000 of valuation

Commercial rentals: $10 - 21 per square foot (annually) notable business incentives: The Employment Tax Increment Financing (ETIF) program returns as much as 75% of a company's withholding tax if it adds at least five new workers in a year. The Business Property Tax Reimbursement Program reimburses a company's local property taxes on facilities built after April 1, 1995, for a maximum of 12 years. The Jobs and Investment Tax Credit helps businesses with an income tax credit on equipment and facilities that generate at least 100 new jobs in two years.

Personal income tax: 2 - 8.5%

Retail sales tax: 5% (7% for meals and lodging)

Education: With a highly ranked public school system, Maine is also the first state to have all its schools and libraries linked via the Internet. Last year, it began a program of providing laptops for all seventh graders, to keep as they progress into high school.

Religious Life: 168 churches and 3 synagogues

Weather: Average temperatures are 23ºF (winter), 82ºF (summer).