Location is key to startup success, and Colorado is among the top 10 states to start a business, according to a new study by WalletHub released July 20.

WalletHub compared the 50 states across 28 key indicators to determine the most fertile grounds in which to launch and grow an enterprise.

Overall, Colorado ranked seventh overall as one of the best states to establish a new business.

The Centennial State scored high in the category of most educated population, ranking No. 2 and outranked only by Massachusetts.

The state also scored high in average growth in the number of small businesses, coming in at No. 5 in that category, and ranked ninth in both business environment and access to resources.

Colorado fell lower on a measure of business costs, coming in at No. 33.

According to WalletHub, an AI-driven financial advisory site, “about a fifth of all startups typically don’t survive past year one of operation, and nearly half never make it to their fifth anniversary.” And that’s not even considering the economic damage done by the COVID-19 pandemic.

A bad location is one of the most common reason startups fail, so the location of a new business is crucial to its success.

“A state that provides the ideal conditions for business creation — access to cash, skilled workers and affordable office space, for instance — can help new ventures not only take off but also thrive,” the site stated.

To determine the best and worst states to start a business, WalletHub compared the states across three key dimensions: business environment, access to resources and business costs.

Each state’s average across 28 weighted metric was used to calculate its overall score. Among the metrics were growth in number of small businesses, startups per capital, five-year business survival rate, job growth, GDP growth, financing accessibility, venture investment per capital, higher education assets, office space availability, labor costs, taxes and cost of living.

The top 10 states were:

  1. Texas
  2. Georgia
  3. California
  4. Florida
  5. Idaho
  6. Utah
  7. Colorado
  8. North Dakota
  9. North Carolina
  10. Massachusetts

Ranked at the bottom of the list was New Jersey, due to factors like high labor costs and expensive office space.

View the full study here.