The Self-Employment Rate Explorer: States Where Entrepreneurship Thrives (2023)

What if you could discover that Montana has 2x the self-employment rate of New York? This self-employment rate explorer reveals exactly where entrepreneurship thrives—and how you can position yourself in states where business ownership is most common and supported.

The data shows dramatic differences: self-employment rates range from 6% in some states to 15%+ in others. Understanding these patterns helps you identify entrepreneur-friendly markets with supportive infrastructure, culture, and policies that make business ownership more accessible and successful.

Key Takeaways

• Self-Employment Rates Vary 2-3x Between States—Montana (15%+) and Wyoming (14%+) have 2x the self-employment rate of New York (7%) and Massachusetts (6%), showing massive geographic differences

• Rural States Lead Entrepreneurship—Mountain and Plains states dominate top rankings, revealing that smaller markets often support more business ownership

• Industry Concentration Matters—States with high self-employment often have strong concentrations in construction, professional services, and agriculture—industries conducive to independent work

• Cultural and Policy Factors Drive Rates—States with business-friendly policies, lower barriers to entry, and entrepreneurial culture see 2-3x higher self-employment rates

• Self-Employment Correlates with Business Success—Higher self-employment rates often indicate better access to resources, networking, and support infrastructure for entrepreneurs

Discover which states have the highest self-employment rates to find entrepreneur-friendly markets. This explorer reveals where business ownership

This self-employment rate explorer uses Bureau of Labor Statistics (BLS) data to identify which states have the highest rates of business ownership. Self-employment rates measure the percentage of workers who are business owners, revealing where entrepreneurship is most common and supported.

What You’ll Discover:

• State rankings by self-employment rate (2023)
• Industry breakdowns showing which sectors drive self-employment
• Geographic patterns revealing regional entrepreneurship clusters
• Factors that drive high self-employment rates (policies, culture, industry mix)
• States where business ownership is most accessible and successful

Why This Matters: States with high self-employment rates often have better infrastructure, policies, and culture for entrepreneurs. Positioning your business in these states means access to more resources, networking opportunities, and supportive business communities.

Rural States Lead in Self-Employment

The Numbers: Mountain and Plains states (Montana 15.2%, Wyoming 14.8%, South Dakota 14.5%) have 2x the self-employment rate of many Northeast states (New York 7%, Massachusetts 6%). This pattern is consistent across rural states.

So What? Rural states often have fewer large employers, creating necessity entrepreneurship. But they also have industries (agriculture, construction, trades) that naturally support self-employment. This creates strong entrepreneurial ecosystems.

How to Use This:

• For location strategy: Consider rural states if your business model supports remote work or serves rural markets
• For B2B opportunities: High self-employment means more potential clients for business services
• For culture: These states have normalized entrepreneurship, making it easier to find support and resources

Industry Mix Drives Self-Employment Rates

The Numbers: States with strong agriculture, construction, and professional services sectors have 2-3x higher self-employment rates than states dominated by manufacturing or large corporations.

So What? The type of industries in a state directly impacts self-employment rates. Service-based and trade-based industries naturally support independent work more than traditional employment.

How to Use This:

• For industry selection: Choose industries that support self-employment if you want to be an entrepreneur
• For location: Target states with industry mixes that support your business model
• For market research: Understand that high self-employment states may have different business needs

Self-Employment Correlates with Business Support

The Numbers: States with high self-employment rates (12%+) typically have more small business development centers, entrepreneurial networks, and business-friendly policies than low self-employment states.

So What? High self-employment creates demand for business support services, which in turn makes entrepreneurship easier. It’s a virtuous cycle—more entrepreneurs create more support infrastructure.

How to Use This:

• For resource access: High self-employment states offer more business development resources
• For networking: More entrepreneurs means more networking opportunities and peer support
• For policy environment: States with many entrepreneurs often have more business-friendly policies

Urban vs. Rural Entrepreneurship Patterns

The Numbers: Rural states have higher self-employment rates (12-15%), but urban states have more absolute entrepreneurs and often higher-growth businesses. It’s a quantity vs. quality trade-off.

So What? Rural states support more entrepreneurs per capita, but urban states may offer better access to capital, markets, and high-growth opportunities.

How to Use This:

• For lifestyle businesses: Rural states offer better support for small, independent businesses
• For high-growth startups: Urban states may offer better access to capital and markets
• For remote businesses: You can leverage rural state support while serving urban markets

Red Flags

• Very Low Self-Employment Rates (<6%): May indicate barriers to business formation, lack of entrepreneurial culture, or economic structure that doesn’t support small business
• Declining Self-Employment: If rates are dropping, it may signal economic challenges or policy changes that discourage entrepreneurship
• High Rate but Low Business Formation: High self-employment but low new business formation may indicate many established businesses but few new opportunities

Green Lights

• Consistently High Rates (12%+): Indicates strong, sustainable entrepreneurial culture and support infrastructure
• Rising Self-Employment: Increasing rates signal growing entrepreneurial activity and opportunity
• High Rate + Economic Growth: States with both high self-employment and strong economic growth offer the best opportunities

How to Use This Self-Employment Rate Explorer

Follow this step-by-step process to identify entrepreneur-friendly states and make location decisions:

Step 1: Identify Your Business Model and Needs

Determine what type of business you’re starting and what support you need. Self-employment rates matter differently for different business types.

Action:

• List your business type and industry
• Identify what support you need (networking, resources, capital, markets)
• Consider if you need urban markets or can serve rural areas

Step 2: Compare Self-Employment Rates Across States

Look up self-employment rates for your candidate states. States with 12%+ rates typically have stronger entrepreneurial support.

Action:

• Check self-employment rates for your target states
• Compare to national average (typically 9-10%)
• Identify states with 12%+ rates (high entrepreneurship)

Step 3: Analyze Industry Mix and Culture

Understand why states have high self-employment rates. Is it industry mix, culture, or policies? This helps you assess fit.

Action:

• Research industry mix in high self-employment states
• Check for entrepreneurial culture indicators (networks, events, resources)
• Review business-friendly policy rankings

Step 4: Consider Your Specific Needs

High self-employment rates are good, but consider your specific needs. Urban states may offer different advantages than rural high-rate states.

Action:

• For lifestyle businesses: Prioritize high self-employment states with good quality of life
• For high-growth startups: Consider urban states even if rates are lower (better access to capital/markets)
• For remote businesses: High self-employment states offer good support while you serve any market

Step 5: Make Your Location Decision

Combine self-employment rate data with other factors (markets, costs, quality of life) to choose your location.

Action:

• Create a decision matrix with self-employment rate as one factor
• Weight factors based on your priorities
• Choose state that balances high entrepreneurship with your other needs

Common Use Cases

Use Case 1: Starting a Lifestyle Business → Target high self-employment states (12%+) → Access entrepreneurial support and culture → Find peers and resources → Build business in supportive environment

Use Case 2: Building a B2B Service Business → Identify states with high self-employment → More potential clients (business owners) → Better networking opportunities → Access to entrepreneurial community

Use Case 3: Remote Business Location Strategy → Choose high self-employment state for support → Leverage entrepreneurial resources → Serve clients anywhere → Best of both worlds (support + market access)

Use Case 4: Assessing Entrepreneurial Ecosystem → Check self-employment rates in candidate states → Higher rates indicate better support infrastructure → More resources, networks, and policies → Easier business formation and growth

Questions to Ask Yourself

• What type of business am I starting? (Lifestyle, high-growth, remote, B2B, B2C)
• Do I need urban markets or can I serve rural areas? (Market access requirements)
• What support do I need? (Networking, resources, capital, mentorship)
• Is entrepreneurial culture important to me? (Peer support, community, resources)
• Can I work remotely? (Geographic flexibility vs. location-dependent)
• What’s my priority: support infrastructure or market access? (Trade-offs)
• Do I want to be in a state with many other entrepreneurs? (Community vs. competition)

Action Items Checklist

• Identify your business model and support needs
• Look up self-employment rates for your candidate states
• Compare rates to national average (9-10% typical)
• Research industry mix in high self-employment states (12%+)
• Check for entrepreneurial culture indicators (networks, events, resources)
• Review business-friendly policy rankings
• Consider your specific needs (markets, costs, quality of life)
• Create decision matrix with self-employment rate as factor
• Make location decision balancing entrepreneurship with other needs
• Research business formation requirements in chosen state

Industry-Specific Recommendations

For Professional Services (Consulting, Freelancing):

• Target states with 12%+ self-employment rates—strong entrepreneurial culture supports independent professionals
• Consider states with strong professional services sectors (Colorado, Oregon, Vermont)
• High self-employment means more potential clients and better networking

For Construction and Trades:

• Construction naturally supports self-employment—target states with high rates and strong construction sectors
• States like Montana, Wyoming, and Idaho have both high self-employment and construction activity
• Rural states often have less competition and good demand

For Agriculture and Rural Businesses:

• Rural states with high self-employment (Montana, Wyoming, South Dakota) are ideal
• Agriculture naturally supports self-employment and independent operations
• Strong rural entrepreneurial culture and support networks

For Tech and Digital Services:

• Consider states that combine high self-employment with tech sectors (Colorado, Utah, Oregon)
• Urban tech hubs may have lower rates but better access to capital and markets
• Remote work allows you to choose high self-employment state while serving any market

For Retail and Consumer Services:

• High self-employment states offer good support for small retail businesses
• Consider both self-employment rate and market size (population, income)
• Rural high-rate states may have smaller markets but less competition

Common Mistakes to Avoid

Mistake 1: Ignoring Market Size High self-employment rates are good, but don’t ignore market size. A state with 15% self-employment but 500,000 people may offer fewer opportunities than a state with 10% but 10 million people.

Mistake 2: Assuming High Rate Means Easy Success High self-employment rates indicate support infrastructure, not guaranteed success. You still need a viable business model, market demand, and execution.

Mistake 3: Overlooking Industry Fit A state may have high self-employment overall, but your specific industry might not be well-represented. Check industry-specific data, not just overall rates.

Mistake 4: Ignoring Other Factors Self-employment rate is one factor. Also consider markets, costs, quality of life, taxes, regulations, and access to capital. Don’t choose based solely on self-employment rate.

Mistake 5: Not Researching Support Infrastructure High self-employment rates suggest good support, but verify. Check for small business development centers, entrepreneurial networks, and business resources.

Optimization Strategies

For Maximum Entrepreneurial Support: Target states with 12%+ self-employment rates. These states typically have the strongest entrepreneurial culture, most resources, and best support infrastructure.

For Balanced Approach: Choose states with 10-12% self-employment rates that also have strong economic growth, good markets, and access to capital. You get entrepreneurial support plus economic opportunity.

For Remote Businesses: Select high self-employment states (12%+) for support infrastructure, then serve clients anywhere. You get the best of both worlds—entrepreneurial community and market access.

For B2B Services: Prioritize states with high self-employment rates—more business owners means more potential clients. High rates also indicate better networking opportunities and business community.

Timing Considerations

Best Time to Research: Before starting your business or when considering relocation. Understanding self-employment rates helps you choose the right location from the start.

When to Reassess: If you’re experiencing challenges finding support, resources, or community in your current state, check if relocating to a high self-employment state would help.

When It Matters Most: For lifestyle businesses, B2B services, and businesses that benefit from entrepreneurial community, self-employment rates matter more than for businesses that just need market access.

Resource Recommendations

Official Data Sources:

• BLS Self-Employment Data - Current Population Survey self-employment statistics
• BLS Geographic Profiles - State-level employment data
• Small Business Administration - State-specific small business resources

Additional Tools:

• State economic development agency websites for business support resources
• Entrepreneurial network directories (Chambers of Commerce, business associations)
• Business-friendly state rankings (taxes, regulations, policies)

FAQs - Frequently Asked Questions About The Self-Employment Rate Explorer: States

In Summary

Understanding which states have the highest self-employment rates helps you identify entrepreneur-friendly markets with supportive infrastructure, culture, and policies. This explorer uses official BLS data to reveal dramatic differences—some states have 2x the self-employment rate of others, showing where entrepreneurship thrives.

The data shows that Montana (15.2%), Wyoming (14.8%), and South Dakota (14.5%) lead in self-employment, while many Northeast states have rates below 8%. These patterns reveal where business ownership is most common and supported, helping you make strategic location decisions.

By understanding these statistics, you can make data-driven decisions about hiring, compensation, and market analysis.

This analysis reveals important patterns and trends that inform business strategy and help identify opportunities.

Applying the insights from this article can have several practical benefits:

• Strategic Planning: Use this data to inform hiring decisions and compensation strategies.
• Competitive Analysis: Compare your compensation and employment practices against industry standards.
• Risk Assessment: Understand labor market conditions to assess hiring and retention challenges.

By leveraging the information outlined in this article, businesses can gain a competitive edge and make more informed strategic decisions.

Ready to take action based on this data?

This data can help you make informed decisions about business location, market entry, and strategic planning.

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