There’s bad news for Michiganders, especially those looking to start a business. The state’s ranking for entrepreneurs continues to slide downward.

A new Simplify LLC report found that the Wolverine State ranked as the 41st best state for entrepreneurs this year, down six spots from last year’s rankings.

Ohio (No. 16), Illinois (No.29) and Indiana (No. 30) all ranked far ahead of Michigan. However, Michigan ranked ahead of Wisconsin (No. 43).

To compile its annual study of the “Best & Worst States for Entrepreneurs in 2025,” Simplify used data from multiple sources, including the U.S. Census Bureau, the U.S. Department of Commerce’s Bureau of Economic Analysis, the Tax Foundation and the U.S. Senate. It analyzed “six key categories” for all 50 states and the District of Columbia to determine the rankings, including consumer spending growth, the corporate tax rate, inflation, the job creation rate and the net migration of educated workers.

According to the analysis, Michigan’s ranking fell six spots. The change partly stems from a sharp decline in consumer spending growth — the state ranked No. 48 — and slower job creation — the state came in as the 34th best.

The analysis also dinged Michigan for its worker migration, seeing a net loss of 7,186 educated adults, ranking the state No. 40.

Simplify cited a finding from the U.S. Department of the Treasury, which in September released data showing 430,000 new businesses opened each month in 2024. According to the agency, that marks a 50% increase since 2019, and small businesses created more than 70 percent of the net new jobs since 2019.

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While remote work, the gig economy, and AI are helping to fuel a “workforce transformation” and create hot spots nationwide for entrepreneurs, Michigan isn’t one of them.

The analysis identified Washington, Texas, Maine, Nevada and Oregon as the five best states for entrepreneurs this year. Conversely, it found Alabama, Iowa, Minnesota, Mississippi and West Virginia were the five states at the bottom of the list.

The best-performing areas for new business included retail, such as e-commerce and brick-and-mortar stores. The report also included professional, scientific and technical services — such as legal and accounting — and residential and non-residential construction.

It’s not for a lack of trying — or throwing tax dollars at the problem.

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Earlier this month, Gov. Gretchen Whitmer announced the second round of State Small Business Credit Initiative 2.0 funds, doling out nearly $79.3 million to state small businesses. In the first round, the MEDC supported 636 loans, totaling $72 million.

“Michigan’s small businesses are the driving force behind our economy,” Whitmer said in a release. She may believe it, but many Michigan residents seemingly do not.

The Simplify finding that Michigan is not among the best states for entrepreneurs is only part of the bad news.

Michigan’s unemployment continued a months-long rise in December, which marked the ninth straight month unemployment has increased, hitting its highest point since October 2021. With the December numbers, 2024 ended with 45,000 more Michiganders out of work than a year earlier.

Numbers from the U.S. Census show the state struggles to keep its residents. The state’s ranking as the tenth most populous state in the country would likely decline precipitously without the addition of migrants.

The Census numbers reveal that while the state lost 67,785 domestic residents, it also saw 164,465 international migrants move in. The addition of international migration saw the Great Lakes State add 96,680 residents between April 1, 2020, and July 1, 2024.

The estimates indicate Michigan’s population stood at nearly 10.08 million on April 1, 2020. The Wolverine State’s population dropped to about 10.04 million in 2021.

It increased to more than 10.08 million on July 1, 2023, and more than 10.1 million on July 1, 2024.