Even McDonald’s began as a simple one-location hamburger shop. Department-store giant Macy’s original store made only $11.06 the first day. Most businesses, in fact, get started as small businesses.
A small business needs a good idea, a determined founder and, let’s be honest, some money to get launched. In a business-forward atmosphere like the U.S., companies can and do begin everywhere from Alaska to Hawaii and from sprawling cities to tiny towns.
Some cities, however, make it easier than others. Finance site WalletHub compared small-business opportunities, looking at 19 criteria in 100 large U.S. cities. Cities were scored in three main areas, business environment, access to resources and business costs, and were assigned a score between 1 and 100.
The results may surprise you. The top city for starting a small business isn’t New York City or Los Angeles. It’s a place you probably know, but for not for starting a business.
Read on for the best large cities for starting a small business, from good to best.
Total score: 58.03
WalletHub scores the Mile-High City high for its business environment, which includes factors such as startup per capita, five-year business survival rate and job growth.
The 40th annual Emerging Trends in Real Estate report, which is detailed in “The 10 Best Cities to Invest in Real Estate Now,” also ranks Denver high for real-estate investing. Denver was singled out by WalletHub for strong homebuilding and real estate development and investment prospects as well as its youthful population of potential workers.
Total score: 58.13
If you’re thinking of a small-business location, do as the song urges: Get Georgia on your mind.
WalletHub ranks Atlanta ninth overall and third for access to investor capital. The city earned points for job growth and for its large college-educated population.
Hot and happening Atlanta also made the grade in “The 25 Best U.S. Cities to Be Your Own Boss.” The Expert Market survey in that report ranked Atlanta high for such urban necessities as Wi-Fi access, coffeehouses and co-working spaces.
8. Raleigh, North Carolina
Total score: 58.61
Raleigh, the capital of North Carolina, is the first of three cities in the Tar Heel State to make this list. North Carolina cities get high marks in this WalletHub study for their business-friendly corporate taxes.
Booming Raleigh earned high marks for small businesses’ access to resources. That takes into consideration a city’s prevalence of investors, venture investment, higher-education assets and college-educated population.
Raleigh landed second among cities on this list for job growth, and a large percentage of its population is of working age.
7. Durham, North Carolina
Total score: 58.86
Durham, along with Raleigh and Chapel Hill, make up an area known as North Carolina’s Research Triangle. The region is anchored by three major universities and numerous technology companies. So, it’s not surprising that Durham, like Raleigh, scores high on WalletHub’s list.
Like Raleigh, Durham enjoys the state’s business-friendly corporate taxes. WalletHub also gave Durham high marks for job growth, venture investment and for its large college-educated and working-age populations.
6. Charlotte, North Carolina
Total score: 59.03
North Carolina’s third winner in this study is Charlotte. The state’s most-populous city, Charlotte is just a few hours west of the Raleigh-Durham area.
If you set up your small business here, you’ll be in good company: Charlotte tops this WalletHub list for its average growth in the number of small businesses. Charlotte got credit for its job growth, industry variety and its higher percentage of working-age population.
Charlotte also stood out in “The 10 Best Cities to Invest in Real Estate Now.” The city won praise from the Emerging Trends in Real Estate report for its strong real-estate and homebuilding markets and its development and redevelopment opportunities.
5. Tampa, Florida
Total score: 59.29
Longing to soak up some sun in the Sunshine State? Do it while starting a business in Tampa, which scores high for both for its advantageous business costs and business environment. The business costs ranking looks at such factors as office space affordability, labor costs, corporate taxes and the cost of living. A city’s business environment is assessed by considering its five-year business survival rate, the length of its average work week and other criteria.
Tampa, one of three Florida cities earning high points in this small-business ranking, also made the top 10 in the recent Emerging Trends in Real Estate report on the best cities for real estate investing.
4. Austin, Texas
Total score: 60.05
Texas’ laid-back capital came in fourth on this list, and it earned top honors for its business environment.
WalletHub also gave Austin high marks — along with Charlotte and Winston-Salem, N.C. — for having a high average growth in the number of small businesses.
Austin appears in other business-friendly lists at Money Talks News recently, including:
- “The 10 Best Cities to Invest in Real Estate Now”
- “You Might Be Surprised Which U.S. City Has the Fastest Job Growth”
Total score: 60.48
Move over, Tampa. This Florida city scored even higher for small-business amenities, earning high marks especially in the vital business environment category.
Miami isn’t a cheap place to live or work, however. It takes a $78,337 salary to buy a median-priced, $353,000-home here, according to “How Much You Need to Earn to Own a Home in 50 Top Cities.”
2. Oklahoma City
Total score: 60.73
“Oklahoma City looks mighty pretty,” wrote songwriter-actor Bobby Troup, in the travel ballad, “(Get Your Kicks on) Route 66.”
Oklahoma’s capital city looks mighty pretty to small-business people, too. It landed the No. 2 spot on this list.
WalletHub ranked Oklahoma City high for its average growth of business revenues, financing accessibility and, especially, for its low cost of living. Of the 100 major cities studied, only two had a cheaper cost of living.
You might even want to end your days here. A GOBanking Rates analysis detailed in “$1 Million Will Last Retirees 26 Years in This Big City” names Oklahoma City the second-most affordable major city for retirees, behind only Houston. A million dollars in retirement funds should last a retiree 24.58 years here, that study concludes.
1. Orlando, Florida
Total score: 60.93
Florida scores a trifecta in this study: Orlando wins top honors, with Miami and Tampa not far behind.
Orlando may be known best to many for its sprawling theme parks, from Walt Disney World to Legoland. And yet, as a WalletHub spokesperson tells Money Talks News, Orlando nabbed this top spot thanks to high rankings for:
- Startups per capita
- Average growth in the number of small businesses
- Job growth
- Prevalence of investors
Small businesses also must surely like that Florida is one of only a handful of states with no income tax.
The report cited in “The 25 Best U.S. Cities to Be Your Own Boss” also ranked Orlando high.
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