Michigan’s rise as the third-best state for entrepreneurial success in 2025 tells a story of resilience, ingenuity, and transformation. With an 8.9% growth in business establishments between 2022 and 2023, the state continues to redefine its economic landscape. This growth reflects a dynamic shift in opportunities across industries, fueled by local talent and community-driven initiatives.
Michigan saw the creation of 26,612 new businesses, increasing from 298,855 in 2022 to 325,467 in 2023. This accomplishment places the state just behind Montana, which achieved a 9.4% growth rate, and Oregon, which led the nation with a 9.9% increase in new businesses. While the numbers provide a clear picture of upward momentum, the lived experiences of entrepreneurs across Michigan give depth to this narrative.
Detroit, Michigan’s largest city, plays a critical role in this transformation. Entrepreneurs in Detroit are capitalizing on its rich cultural heritage while leveraging its emerging role as a hub for technology and innovation. The city is home to an increasing number of Black-owned businesses that reflect its historic resilience and creative energy. Local entrepreneurs are building startups in tech, retail, and food services, all while prioritizing their communities. These efforts breathe new life into neighborhoods that have long been overlooked.
The Michigan Economic Development Corporation has been instrumental in supporting small businesses and startups. Through grants, mentorship programs, and access to capital, entrepreneurs in Michigan are finding pathways to success that might have been inaccessible in the past. Initiatives like Motor City Match, which provides funding and resources to new businesses in Detroit, have enabled entrepreneurs to turn their visions into tangible, community-focused ventures.
Black entrepreneurs across Michigan are pushing the boundaries of what’s possible. These business leaders are not only launching new ventures but also creating generational wealth in historically marginalized communities. Programs focused on diversity and inclusion are making a measurable impact, providing Black-owned businesses with the tools to scale and thrive. This shift represents a meaningful departure from decades of systemic barriers that left many entrepreneurs behind.
Entrepreneurship is also flourishing outside of Michigan’s urban centers. Smaller cities and towns across the state are seeing growth as new businesses open their doors. In Grand Rapids, innovative food entrepreneurs are redefining the local culinary scene. In Flint, community leaders are turning to small business as a vehicle for revitalization. These efforts reflect the state’s diverse economy and its ability to adapt to change.
Oregon’s top ranking, with a 9.9% growth in businesses, demonstrates what’s possible when state policies align with entrepreneurial needs. Michigan’s rise highlights the importance of pairing state-level support with local innovation. While Oregon added 18,273 new businesses, Michigan’s net increase of over 26,000 shows that the scale of its entrepreneurial success is significant. Entrepreneurs in Michigan are building on the state’s industrial legacy while charting a new course for the future.
Montana, which ranked second, saw a net increase of 5,762 businesses, growing from 61,185 in 2022 to 66,947 in 2023. Though smaller in scale, Montana’s 9.4% growth rate underscores the potential for entrepreneurship in less densely populated areas. Michigan’s ability to achieve an 8.9% growth rate while supporting a large and diverse population showcases its broad economic impact.
The study also reveals that not all states are experiencing similar success. Virginia, which recorded a 5% decline in businesses between 2022 and 2023, underscores the challenges states face when they fail to create supportive environments for entrepreneurs. Michigan’s growth provides a sharp contrast, showing that deliberate efforts to invest in small businesses can lead to significant progress.
Entrepreneurs in Michigan are addressing more than just market opportunities. Many are solving critical challenges within their communities. From tackling food insecurity to creating sustainable solutions in clean energy, Michigan’s businesses are shaping a future that prioritizes equity and innovation. Entrepreneurs are leveraging local resources while building businesses that reflect their values and aspirations.
The growth in Michigan’s entrepreneurial sector is creating ripple effects throughout the state’s economy. New businesses generate jobs, revitalize neighborhoods, and contribute to the tax base. These economic benefits strengthen communities and provide opportunities for individuals and families to build wealth. Michigan’s success is not just an economic story; it’s a social one, grounded in the belief that communities thrive when businesses are supported.
Virginia’s decline, with a net loss of 16,522 businesses, serves as a reminder of what’s at stake when states fail to prioritize entrepreneurs. Michigan’s rise illustrates the power of strategic investments and the value of fostering an environment where businesses can grow. Entrepreneurs in Michigan are leading the way by showing how community-focused initiatives can drive broader economic progress.
Michigan’s growth as the third-best state for entrepreneurial success is more than a ranking—it’s a reflection of the people who make this state what it is. Every new business represents someone’s hard work, vision, and determination. Entrepreneurs in Michigan are proving that success is not limited to one industry or one city. Instead, it’s a collective effort rooted in community and driven by innovation.
The state’s progress is also a call to action for policymakers, business leaders, and community members to continue investing in entrepreneurs. The momentum Michigan has built is just the beginning. By continuing to address barriers to entry, expanding access to capital, and fostering inclusivity, the state can solidify its position as a leader in entrepreneurship. Michigan’s story is not just about where it ranks—it’s about where it’s headed. Entrepreneurs in Michigan are building a future that reflects the state’s values, creativity, and resilience.