Call now for free quote! (855) 204-9132

The Best US Cities for Starting a Small Business

There are plenty of factors to consider when starting your small business, and high on that list should be location, location, location. You might be surprised to learn how much difference it can make to the success and longevity of your business that you choose the right city as your starting point. You should think about legal, tax and cost implications that determine how easy it is to get off the ground, but you also need to take into account the potential for growth in your chosen city. Launching your small business is just the first hurdle, after all!


So how do you know where to start? The key factors to take into consideration are:

  • Current business environment
  • Access to resources, including funding and labor
  • Business costs

A Small Business in a Big City looked at over 300 cities in North America, large and small, and ranked them based on financial and demographic factors, as well as general friendliness to start-ups and small businesses. These were their top 5 recommendations:

  1. 1.     San Francisco, CA
  2. 2.     Austin, TX
  3. 3.     Minneapolis, MN-WI
  4. 4.     San Jose, CA
  5. 5.     Columbus, OH

According to, the average rate of growth for start-ups in San Francisco is 106.9%, so it’s pretty much unrivalled when it comes to a positive business environment. It’s also full of millennials, entrepreneurs, young talent and venture capitalists who are ready to invest in the next big thing! Starting and growing your business in a big city does tend to make it easier to network with other industry professionals, and to attract investments and talent.

A Small Business in a Smaller City

Sometimes it pays to be a big (or growing!) fish in a small pond, however. While larger cities offer more access to venture capital, a wider workforce, and potentially more graduates and young professionals, the higher costs of living, property and labor can be prohibitive for growth. 

Bearing this in mind, WalletHub’s 2018 survey of small US cities (with a population of 25,000 to 100,000 people) and came up with a very different top 5:

  1. Holland, MI – affordable business costs and a large, skilled workforce
  2. 2.     St. George, UT – ranked well for a ripe business environment
  3. 3.     Aberdeen, SD – relatively low business costs
  4. 4.     Wilson, NC – ranked in the top 10% for business environment, costs and access to resources
  5. 5.     Cheyenne, WY – ranked top for business environment

It may be easier to get your small business off the ground in one of these cities because of the lower cost of living and associated business costs (for office space and labor, for example). Holland also benefits from the availability of a large, qualified workforce as it’s not far from the highly populated Grand Rapids, as well as Western Michigan University.

Smaller cities offer other potential advantages, too, such as stronger relationships with customers, partners and service providers, which is particularly important for hospitality businesses such as bars and restaurants. There also tends to be less immediate competition, so it can be easier to make your mark.

Support & Funding

While venture capital is far harder to come by in smaller cities, Holland proves that there are some valuable funding and support options out there as these areas push to foster entrepreneurship and attract new business growth.

For example, Holland has been made a satellite SmartZone, which means it can harness state increases in education taxes and put these funds towards economic development – particularly to support technology and businesses. The Small Business Association of Michigan promotes entrepreneurial activity, supports and advocates on behalf of small businesses, and Amber Grants for Women awards a $1000 grant every month to an American businesswoman, as well as $10,000 to an overall winner at the end of the year 

Of course, your choice of location, and your chances of success, will also depend on the nature of your small business. It’s worth getting clued up on the differences between various cities, in terms of opportunities and potential for start-ups and small businesses in your industry, before making a decision, to give yourself the best chance of starting out strong, growing and thriving.



Request A Free Quote