Best Cities for Small Business

 
 
 
 
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by Douglas Burger

There are more than five million companies in the U.S. And more than 76% of them have less than 10 employees, according to the U.S. Census Bureau.

Small businesses are an important part of the economy. To determine the best cities in the country for small businesses, we looked at 11 data points from eight reputable sources. Below you will find our results, as well as a detailed methodology explaining how we arrived at them.

The Best Cities for Small Business Owners

To determine the best cities for small business ownership, we analyzed factors relating to taxes as well as the economic and the business environments. We then combined all of these three categories and ranked them from the best to the worst.

  • Boulder, CO

    • Taxes: 14
    • Business Community: 17
    • Economy: 6
  • Fort Collins, CO

    • Taxes: 14
    • Business Community: 19
    • Economy: 9
  • Columbus, OH

    • Taxes: 6
    • Business Community: 26
    • Economy: 17
  • Charlottesville, VA

    • Taxes: 1
    • Business Community: 21
    • Economy: 34
  • Austin-Round Rock, TX

    • Taxes: 49
    • Business Community: 8
    • Economy: 2

The Rest of the Best

The five above were tops, but 195 other cities were under consideration. Where did yours rank?

Final RankCityTaxesEconomy Business Community
1Boulder, CO14617
2Fort Collins, CO14919
3Columbus, OH61726
4Charlottesville, VA13421
5Austin-Round Rock, TX4928
6Dallas-Fort Worth-Arlington, TX49316
7Cincinnati, OH-KY-IN62841
8Colorado Springs, CO141155
9Ann Arbor, MI294022
10Grand Rapids-Wyoming, MI293234
11Denver-Aurora-Lakewood, CO142464
12Houston-The Woodlands-Sugar Land, TX492628
13Richmond, VA15758
14San Antonio-New Braunfels, TX491557
15Madison, WI223269
16Naples-Immokalee-Marco Island, FL754212
17Provo-Orem, UT107419
18College Station-Bryan, TX494545
18Lansing-East Lansing, MI298723
20Kalamazoo-Portage, MI296153
21Amarillo, TX49788
22Virginia Beach-Norfolk-Newport News, VA-NC137108
23Greeley, CO148127
24Lubbock, TX491887
25Appleton, WI2231111
25Jacksonville, FL754445
27Barnstable Town, MA1003036
27Crestview-Fort Walton Beach-Destin, FL755338
29Green Bay, WI225097
30Waco, TX492999
31Killeen-Temple, TX4925105
32Gainesville, FL759315
33Cape Coral-Fort Myers, FL756350
34Roanoke, VA135155
35Burlington-South Burlington, VT2610363
36Ogden-Clearfield, UT107582
36Orlando-Kissimmee-Sanford, FL757247
38Bridgeport-Stamford-Norwalk, CT368772
38Raleigh, NC1551030
40Sioux Falls, SD1912171
41Atlanta-Sandy Springs-Roswell, GA1123656
41Seattle-Tacoma-Bellevue, WA1285125
43Tallahassee, FL7511913
44Baltimore-Columbia-Towson, MD2010980
44Charleston-North Charleston, SC664895
44Santa Rosa, CA166403
47Wilmington, NC1553818
48Dayton, OH655151
48El Paso, TX4961102
50Lynchburg, VA174138
50Milwaukee-Waukesha-West Allis, WI2212071
52Des Moines-West Des Moines, IA1171384
52Omaha-Council Bluffs, NE-IA911122
54Tampa-St. Petersburg-Clearwater, FL757070
55Kansas City, MO-KS1205842
56Cleveland-Elyria, OH615167
57San Luis Obispo-Paso Robles-Arroyo Grande, CA166581
58Bremerton-Silverdale, WA1286633
59Cedar Rapids, IA1172294
59Lexington-Fayette, KY2773133
61Detroit-Warren-Dearborn, MI2912976
62Charlotte-Concord-Gastonia, NC-SC1552160
62North Port-Sarasota-Bradenton, FL7511744
62Salt Lake City, UT10714115
65Canton-Massillon, OH6123108
66St. Louis, MO-IL1203981
67Laredo, TX4910290
67Palm Bay-Melbourne-Titusville, FL7510660
69Manchester-Nashua, NH658097
70Pittsburgh, PA4013865
71Port St. Lucie, FL7512547
72Worcester, MA-CT10027122
73Portland-South Portland, ME9312532
74Boston-Cambridge-Newton, MA-NH10049102
74Durham-Chapel Hill, NC1552373
76Corpus Christi, TX4971133
76Indianapolis-Carmel-Anderson, IN1402093
76Oxnard-Thousand Oaks-Ventura, CA166807
76Philadelphia-Camden-Wilmington, PA-NJ-DE-MD4017340
80Minneapolis-St. Paul-Bloomington, MN-WI1234289
80Pensacola-Ferry Pass-Brent, FL759782
82San Jose-Sunnyvale-Santa Clara, CA166854
83Albany-Schenectady-Troy, NY1349131
83Harrisburg-Carlisle, PA40111105
85San Francisco-Oakland-Hayward, CA166865
86Akron, OH6136116
86Santa Maria-Santa Barbara, CA166839
88Toledo, OH6122131
89Beaumont-Port Arthur, TX49100114
89Youngstown-Warren-Boardman, OH-PA6125132
91Savannah, GA1127678
92Louisville/Jefferson County, KY-IN2766176
93Lincoln, NE9119164
93Olympia-Tumwater, WA12812026
95Vallejo-Fairfield, CA1669514
96Brownsville-Harlingen, TX49105122
97Miami-Fort Lauderdale-West Palm Beach, FL7515349
98Deltona-Daytona Beach-Ormond Beach, FL7514559
99Huntsville, AL9311276
100Asheville, NC1559236
100Kennewick-Richland, WA1286392
102San Diego-Carlsbad, CA1661146
103Washington-Arlington-Alexandria, DC-VA-MD-WV35132120
104McAllen-Edinburg-Mission, TX49107133
105Norwich-New London, CT36114141
106Trenton, NJ7178143
107Salisbury, MD-DE20147128
108Santa Cruz-Watsonville, CA1661291
109Greenville-Anderson-Mauldin, SC6658173
110Hartford-West Hartford-East Hartford, CT36159104
111Rochester, NY13410365
112Flint, MI2917699
113Allentown-Bethlehem-Easton, PA-NJ40149120
114Urban Honolulu, HI93100118
115New York-Newark-Jersey City, NY-NJ-PA7116875
116Boise City, ID11154153
117Nashville-Davidson--Murfreesboro--Franklin, TN19516110
117Phoenix-Mesa-Scottsdale, AZ12311484
119Lancaster, PA40154128
120Los Angeles-Long Beach-Anaheim, CA16614611
121Reading, PA40150141
122Sacramento--Roseville--Arden-Arcade, CA16615810
123Columbia, SC66133137
124Portland-Vancouver-Hillsboro, OR-WA14610884
125Salinas, CA16615128
126Buffalo-Cheektowaga-Niagara Falls, NY13411399
127Fort Wayne, IN14051157
128Augusta-Richmond County, GA-SC11290150
128Springfield, MA10063189
130Erie, PA40177138
131New Haven-Milford, CT36172148
132Spokane-Spokane Valley, WA128128105
133Ocala, FL75171118
134Syracuse, NY13414390
135Tucson, AZ123133112
136Oklahoma City, OK16445160
137Champaign-Urbana, IL18614342
137Prescott, AZ12316979
139Atlantic City-Hammonton, NJ71180122
139Modesto, CA16617334
141Springfield, MO120117138
142Chico, CA16618824
143Winston-Salem, NC15545181
144Lakeland-Winter Haven, FL75162145
145Stockton-Lodi, CA16616751
145York-Hanover, PA40166178
147Baton Rouge, LA14914195
148Greensboro-High Point, NC15589143
149Myrtle Beach-Conway-North Myrtle Beach, SC-NC66156170
150Chicago-Naperville-Elgin, IL-IN-WI18617539
150Davenport-Moline-Rock Island, IA-IL11799184
150Fayetteville, NC155123122
150Spartanburg, SC66137197
154Evansville, IN-KY14077186
154Salem, OR146110147
156Scranton--Wilkes-Barre--Hazleton, PA40185179
157Topeka, KS19056161
158Utica-Rome, NY134141133
159Binghamton, NY134159116
159Tulsa, OK16482163
161South Bend-Mishawaka, IN-MI14083190
162Birmingham-Hoover, AL93159162
162Hickory-Lenoir-Morganton, NC15574185
164Merced, CA16619754
165Fresno, CA16620052
166Riverside-San Bernardino-Ontario, CA16618174
167Visalia-Porterville, CA16619662
168Anchorage, AK49184192
169Yakima, WA128148152
170Knoxville, TN19569166
171Bakersfield, CA16619867
172Jackson, MS71179182
173Macon, GA112163158
174Duluth, MN-WI123140175
175Hagerstown-Martinsburg, MD-WV149133158
176Eugene, OR146183112
177Columbus, GA-AL112165169
178Providence-Warwick, RI-MA104178167
179Albuquerque, NM110189153
180Fayetteville-Springdale-Rogers, AR-MO19266198
181Wichita, KS19079188
182New Orleans-Metairie, LA149182130
183Chattanooga, TN-GA19593174
184Reno, NV144154165
184Tuscaloosa, AL93187183
186Little Rock-North Little Rock-Conway, AR19298176
187Clarksville, TN-KY195139146
187Mobile, AL93193194
187Montgomery, AL93192195
190Memphis, TN-MS-AR19596191
191Charleston, WV105190196
192Peoria, IL186157155
193Rockford, IL186164149
194Huntington-Ashland, WV-KY-OH105199199
195Lafayette, LA149191168
196Shreveport-Bossier City, LA149193172
197Las Vegas-Henderson-Paradise, NV144186187
198Fort Smith, AR-OK192129200
199Gulfport-Biloxi-Pascagoula, MS149195180
200Kingsport-Bristol-Bristol, TN-VA195170193

The Top (and Bottom) Five Cities for...

Colorado took the top two spots on the list along with two Texas cities in the top six. Here we take a specific look at a few of the data points and explain them in more detail.

Unemployment Rate

Boulder and Fort Collins, Col., both hold unemployment rates under 3%, according to the Bureau of Labor Statistics, and ranked fifth and seventh in this data point, respectively. California had the six worst rates, all over 8%.

RankCityRate
1Sioux Falls, SD2.2
2Burlington-South Burlington, VT2.5
2Manchester-Nashua, NH2.5
4Boston-Cambridge-Newton, MA-NH2.8
4Boulder, CO2.8
RankCityRate
200Visalia-Porterville, CA11.3
199Merced, CA10.5
198Bakersfield, CA10.3
197Fresno, CA9.7
196Modesto, CA8.7

Cost of Living

A city’s cost of living of living is important both for consumers and businesses. Not all cities had data available on infoplease.com. Those cities were given a base number of 100 for this data point. Texas and Tennessee are some of the cheapest states, holding nine of the top 15 on this list.

RankCityCOL
1McAllen-Edinburg-Mission, TX85
2Brownsville-Harlingen, TX85.8
3Fort Smith, AR86.1
4Indianapolis-Carmel-Anderson, IN87.2
5Killeen-Temple, TX87.4
RankCityCOL
200New York-Newark-Jersey City, NY-NJ216.7
199Honolulu, HI165.7
198San Francisco-Oakland-Hayward, CA164
197North Port-Sarasota-Bradenton, FL159
196San Jose-Sunnyvale-Santa Clara, CA156.1

Number of Offices

Small businesses have a lot of obstacles to overcome in order to succeed. A local coffee shop with a Starbucks down the street has to find a way to compete with a large corporation. We took a look at the number of corporate, subsidiary, and regional managing offices in each city (from U.S. Census Bureau data) with a smaller number being more ideal for small businesses.

RankCityOffices
1New York-Newark-Jersey City, NY-NJ-PA2,697
2Los Angeles-Long Beach-Anaheim, CA1,824
3Dallas-Fort Worth-Arlington, TX1,705
4Chicago-Naperville-Elgin, IL-IN-WI1,655
5Washington-Arlington-Alexandria, DC-VA-MD-WV1,239
RankCityOffices
200Merced, CA7
199Yakima, WA12
198Prescott, AZ15
197Bremerton-Silverdale, WA16
196Kennewick, Richland WA17

Experts' Take

To vary our coverage of the best cities for small business, we put the data aside and sought out experts for answers to questions of concern.

Stay tuned as our experts weigh in.

Methodology

In order to determine the best cities for small businesses in the U.S. we looked at 11 data points from eight reputable sources.

Data for the regulatory environment was not available and was not included in the study. We focused on areas of data that would help a small business be sustainable, but also flourish based on the economic traits of the city.

Below, we breakdown each statistic and point to its origin. Those marked with an asterisk are state-based (not city-based).

Taxes

  1. Average State + Local Sales Tax Rate * / SalesTaxHandbook
  2. Small Business Tax Index * / Small Business Tax Index
  3. 2017 State Business Tax Climate Index * / Tax Foundation

Economy

  1. Unemployment Rate / Bureau of Labor Statistics
  2. Median household income / U.S. Census Bureau
  3. Forbes best states for business * / Forbes
  4. Cost of living / infoplease

Business Community

  1. Percentage of population 25 years and older with at least a bachelor's degree / U.S. Census Bureau
  2. Number of Small Business Association offices/resources * / Small Business Association
  3. Number of mortgage and nonmortgage loan brokers / U.S. Census Bureau
  4. Number of corporate, subsidiary, and regional managing offices / U.S. Census Bureau

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