Unlike some countries where most of the economic action is concentrated in one or two dominant cities, the U.S. is a massive, geographically diverse economy. With dozens of major cities boasting unique qualities, there are many attractive places to start a business.
As a business owner, you have to think about a lot of factors before you choose where to start a business, form an LLC or expand your business to a new location in another state. Regardless of where you end up, your choice of location will play a significant role in your long-term success.
Some cities are friendlier to new businesses than others. For example, you might relish the idea of establishing your company in a bustling business district like midtown Manhattan — until you find out how much the rent is. Or you might opt for a cheaper cost of living city and then be stifled by a sluggish economy.
As a business owner, you have to strike the right balance between choosing a city based on the costs of doing business and the potential opportunities there. Aside from rent and labor costs, there are plenty of other variables to consider when you start a business. Having a realistic idea of what to expect from your new location may help you make the best decision.
WalletHub recently released a study on the “Best Large Cities to Start a Business,” where they evaluated 100 cities on factors such as the business climate, affordability of office space, five-year business survival rate, availability of financing, and more.
Here are WalletHub’s recommendations for the 10 best cities to start a business — is your city on this list?
Best Large Cities to Start a Business
1. Orlando, FL
Orlando earned the top honors for WalletHub’s 2019 survey of the best large cities to start a business. Out of the top 10 cities, it had the third-best score in the “Business Costs” and “Business Environment” dimensions. The survey found that it had the fourth highest average growth of small businesses in the country. These factors help make it an exceptional city to start a new business.
2. Oklahoma City, OK
Oklahoma City ranked second overall in the WalletHub survey, and 10th out of 100 cities based on “Business Costs,” which included metrics such as “Office-Space Affordability” and “Labor Costs.” Compared to higher-cost cities like New York or San Francisco, Oklahoma is a surprisingly inexpensive place to live and work. This is a simple but important detail to consider when you’re deciding where to start a business.
3. Miami, FL
Miami finished third overall in the survey, and was ranked second in the “Business Environment” category. Miami has long established itself as a major tourist and cultural hub and is often described as “the capital of Latin America.” A steady influx of new residents and resources supports this vibrant, multifaceted economy.
4. Austin, TX
Business is booming in the capital city of “The Lone Star State.” The 2019 WalletHub survey placed Austin as the fourth overall best city to start a business, and it tied for first place in the “Average Growth in Number of Small Businesses” metric. Austin is home to a potent blend of industries — government, education, tourism and technology — which make it a terrific city to start a business.
5. Tampa, FL
The business forecast in Florida is very sunny! Tampa finished fifth overall in the WalletHub survey, and ranked 16th in the key dimension of “Business Costs.” This entitles Tampa to some friendly bragging rights — it scored even higher in this metric than its fellow Florida cities Orlando and Miami.
6. Charlotte, NC
Charlotte ranked sixth overall in the survey. It is the biggest city in the state and a major banking center, but it’s also doing lots of good things for “the little guy.” Charlotte is one of three cities that tied to lead the survey in the “Average Growth in Number of Small Businesses” category.
7. Durham, NC
Durham finished seventh overall, and had the fourth-best score in the “Business Costs” dimension of the top 10 overall cities. Durham shares a lot of the same attributes of cities that scored higher overall, but you’ll probably pay less for your expenses if you open a business there. Durham, along with Raleigh and Chapel Hill, makes up the Research Triangle of North Carolina, which is home to an impressive array of technology startups, medical centers and life sciences companies.
8. Raleigh, NC
WalletHub ranked Raleigh eighth overall in the survey. In the key dimension of “Access to Resources,” Raleigh had the best score of any other city on the top 10 list. The metrics in that category include “Venture Investment per Capita” and “Human-Capital Availability.” The ability to secure investors and hire qualified employees for your company makes Raleigh an attractive destination for a new business.
9. Atlanta, GA
Coming in at ninth place in the survey is the state capital of Atlanta. It scored highly in the “Access to Resources” category, finishing with the fourth-best score of all the top 10 cities in that key dimension. As Georgia’s most populous city, it offers a deep labor pool for a new business to hire from. Scores of working-age and college-educated people are moving to Atlanta for the opportunities there.
10. Denver, CO
Denver ranked 10th overall in the survey, and had the fifth-best score on the top 10 list for the “Business Environment” dimension. There are a lot of startups per capita and a variety of businesses opening, and many of those businesses are gaining traction and staying open.
WalletHub’s survey is a general overview of some of the major indicators of a city’s economic climate. There are a host of factors to consider when you’re determining where to start your business. Do your research, try to think critically about what matters most to you and go from there. If your new business meets the needs of your chosen city, it might be the last time you ever need to move.
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