10. Florida
Florida
2011 startup rate: 380 per 100,000 adults

By touting its business-friendly environment, Florida has become a magnet for technology startups and other small businesses. The best example is Space Exploration Technologies, better known as SpaceX, which recently launched the first private delivery capsule to the International Space Station.

As the U.S. phases out its national space shuttle program, Florida's done some quick thinking to keep the space coast alive by inviting private companies to utilize its existing infrastructure and skilled talent.

And the push goes beyond the space coast. Medical device manufacturers are springing up in Fort Lauderdale. Robotic device makers catering to aerospace and defense companies are expanding around the state.

Small businesses now make up 75% of the state's gross domestic product. One of every five domestic exporters is based in Florida.

To boost its competitiveness, Florida has reduced regulations and business taxes. There's also no personal income tax. Coming soon is a one-stop shop state online portal where entrepreneurs can access all the information they need to start a business.

One drag is high unemployment in the state. Then again, that means a bigger labor pool for small employers.


Source: 2012 Kauffman Index of Entrepreneurial Activity, published by the Kauffman Foundation. The 2011 startup rate for each state is based on a yearly national survey of about half a million people -- adults aged 20 to 64 who start a business each month with 15 or more hours worked. In Arizona, for example, Kauffman found that 520 of every 100,000 adults started businesses in 2011.
By Parija Kavilanz @CNNMoney - Last updated June 13 2012: 1:25 PM ET
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10 most entrepreneurial states

Opening up a small business in a tough economy is a risky gamble. But these ten states saw more startup activity than anywhere else nationwide. Here's why.

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