Small Business News
GOBankingRates Ranks Top U.S. Cities Where Entrepreneurs Thrive
When most people hear the term “startup” it’s common for areas like Silicon Valley to come to mind. That’s why some may be surprised to learn that, when it comes to starting a small business, the U.S. map is filled with cities where entrepreneurs are thriving. Now GOBankingRates (GBR) has released a study ranking the top 20 best cities for new small businesses, including several that aren’t in Northern California.
In order to arrive at their rankings, GOBankingRates look at eight factors that impact startups, such as the rate of new entrepreneurs, the density of startups in a given area, the survival rate for new business, and more. On top of that, other metrics such as the cost of living were also factored in. Much of this info was actually sourced from the 2017 Kauffman Index of Startup Activity, as well as the Index of Main Street Entrepreneurship.
Topping GBR’s list was Austin, Texas. The Lone Star State capital was found to have a new entrepreneur rate of .51%, meaning that percentage of the adult population start businesses each month. Additionally, for every 1,000 business in Austin, 104.5 are startups. Incidentally, although Austin ranked number one overall, it was actually third in both measures called out by GBR. Instead it was number two ranked Miami and number seven ranked Los Angeles that had the highest rate of new entrepreneurs. In both cities approximately 56 out of every 10,000 adults starts a business in a given month. As for startup density, Miami was in first with 107.8 followed by another Floridian city — Orlando, which ranked 10th overall — with 105.5.
Returning to the overall list, Dallas came in third with a 0.37% new entrepreneurship rate and 94.2 startup density, followed by San Diego (0.49% and 95.9) and Denver (0.39% and 92.3). The top 10 was rounded out Phoenix, Arizona; Los Angeles, California; Houston, Texas; Kansas City, Missouri; and Orlando, Florida. With San Diego, L.A., San Fransisco, San Jose, and Riverside all in the top 20, California managed to place the most cities on the list. However GOBankingRates notes that Texas — represented by Austin, Dallas, and Houston — had three cities finish in the top 10.
As we’ve discussed before, studies like this can be helpful in determining what cities are the most small business-friendly and give your startup the best chance to thrive. At the same time this isn’t to say that these are the only locations where you’ll find success. In fact, depending on the market for your business, all or none of these cities may actually be the best option. Because of that, before packing up and moving in pursuit of your entrepreneurial dreams, it may be best to look at your own backyard first.