The 25 Best US Cities to Start a Business
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Orlando, Florida is among the best cities to start a business.Every month, thousands of working or job-seeking people give up the traditional workday — or give up the job search — and make the plunge into entrepreneurship. But where a would-be business owner is located could make a big difference to their startup’s success, as some places are better than others.
WalletHub researched and compared 100 big cities across America to see which places might give entrepreneurs a leg up on the competition. Specifically, it ranked and weighed these criteria, from 1 to 100:
- Business environment: Length of the average work week (the longer, the better), average small business growth, startups per capita, growth of small business revenue, business survival rate, industry variety, job growth, entrepreneurship index
- Access to resources: Financing accessibility, venture capital investment per capita, prevalence of investors, number of available workers, share of college-educated population, working-age population growth
- Business costs: Labor costs (double weighted), office space affordability, cost of living, corporate taxes
The following are the 25 best cities to make the list — and they just might be the prime location for your new startup.
25. Los Angeles, California
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Business environment rank: 16
Access to resources rank: 22
Business cost rank: 86
Total score: 53.99
Los Angeles’s Silicon Beach startup scene is poised to take on Silicon Valley. This hot spot for business leaders is home over 175 startups with an estimated $155 billion in valuation, according to the marketing agency MediaKix.
24. Hialeah, Florida
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Business environment rank: 28
Access to resources rank: 96
Business cost rank: 14
Total score: 54.09
Hialeah scored extremely well for business affordability and had the third lowest cost of labor. The city is the sixth most populous city in Florida with over 6 million people, and is home to the largest percentage of Cubans and Cuban Americans in the country.
23. Lubbock, Texas
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Business environment rank: 54
Access to resources rank: 6
Business cost rank: 54
Total score: 54.12
The city of Lubbock is enticing for entrepreneurs looking for financing, as Texas’s 11th-largest city scored No. 2 in most accessible financing. The city is home to numerous colleges, including the Texas Tech University, whose Innovation Hub is a, well, hub for entrepreneurs that hosts events with the local community to promote fledgling companies.
22. Tulsa, Oklahoma
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Business environment rank: 60
Access to resources rank: 56
Business cost rank: 6
Total score: 54.25
Tulsa has a very low cost of business and a number of small business incubators and growth providers, such as The Forge, 36 Degrees North, Fab Lab Tulsa and Kitchen 66. And the city is looking to attract more workers in general — the city’s Tulsa Remote program offers $10,000 for remote workers willing to move and take up residence in Oklahoma’s second-biggest city.
21. Aurora, Colorado
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Business environment rank: 19
Access to resources rank: 87
Business cost rank: 44
Total score: 54.36
Aurora has a cheaper cost of living and a better cost of business ranking than Denver, and it’s just a few miles away from the capitol city. As a state in general, a startup is “born” every 72 hours in Colorado, Laura Blomquist Rodriguez of the Colorado Office of Economic Development told ABC Denver.
20. Irvine, California
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Business environment rank: 10
Access to resources rank: 1
Business cost rank: 97
Total score: 54.65
Irvine has the most educated populace on the list, with 96 percent of Irvine residents having at least graduated from high school and 67.5 percent having a bachelor’s degree or higher. But you’ll need a good amount of seed money for this city, as Irvine ranked 97 out of 100 in business costs.
19. Oakland, California
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Business environment rank: 7
Access to resources rank: 10
Business cost rank: 92
Total score: 54.83
Oakland is at an interesting place right now in the startup sphere. The city wants to grow its startup sector but it also doesn’t want to become “another home of $7 avocado toast and entitled ‘brogrammers,’” according to an article published in the San Francisco Chronicle. There are over 350 start-ups currently in Oakland and with annual average tech salary of $122,000, which probably accounts for its detrimental business score. Oakland is also in the top-five for most expensive office spaces on WalletHub’s scorecard.
18. Laredo, Texas
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Business environment rank: 43
Access to resources rank: 14
Business cost rank: 43
Total score: 55.5
Laredo is a trading hub, with over $234 billion in imports and exports being traded between Mexico and the United States in 2018. The city, and Port Laredo, also trades with China, Malaysia, Thailand and France — entrepreneurs looking to start a business in the import/export world should have Laredo on their radar.
17. Irving, Texas
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Business environment rank: 5
Access to resources rank: 37
Business cost rank: 79
Total score: 55.75
Workers might not be the biggest fans of Irving when it comes to the length of the average work week—WalletHub ranks Irving as having the fourth longest work week among these cities. Another 2019 WalletHub study found that Irving was the third hardest-working city in America.
16. San Antonio, Texas
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Business environment rank: 8
Access to resources rank: 58
Business cost rank: 62
Total score: 56.2
San Antonio has a thriving startup scene and there are a number of organizations in place to help out entrepreneurs looking to set up shop in Alamo City. Students and Startups connects undergrads with local startups, while Startups San Antonio keeps business owners in the know about the entire startup scene. San Antonio received $110 million in venture funding in 2018.
15. Dallas, Texas
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Business environment rank: 11
Access to resources rank: 33
Business cost rank: 70
Total score: 56.32
Dallas is tied for fifth place in having the highest growth in number of small businesses, and there are bigger businesses looking to invest in startups: the Dallas-Fort Worth area nabbed a total of $626 million in venture capital in 2018. Since 2013, the city has hosted the annual Dallas Startup Week, which helps entrepreneurs connect with the local community.
14. St. Petersburg, Florida
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Business environment rank: 32
Access to resources rank: 68
Business cost rank: 11
Total score: 56.61
At the state level, Florida has no state or city income taxes and boasts a low corporate tax rate of 5.5 percent. St. Petersburg has a number of co-working spaces and resources for startups, and the area is continually looking for more ways to secure venture capital and nurture its growing tech sector.
13. Houston, Texas
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Business environment rank: 4
Access to resources rank: 55
Business cost rank: 67
Total score: 56.62
The Magnolia City is blooming (and booming). It’s enjoying an almost 20-year record-low unemployment rate, and it’s added an average of 2,340 new businesses per year between 2013 and 2018. Houston has been named the most diverse city in America by WalletHub and placed seventh among the top 10 cities with the most women-owned startups by a Seek Capital study.
12. Jacksonville, Florida
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Business environment rank: 24
Access to resources rank: 77
Business cost rank: 9
Total score: 56.77
Jacksonville has had a steadily growing tech sector since 2012 and workers in the field are paid 15 to 20 percent below the national average, according to a study by Forrester Research. The study also noted that the home of the NFL’s Jaguars also has a “solid track record for attracting millennials.” However, the city also ranked No. 97 for accessible financing by WalletHub, so you might want to move with more than just a pocket full of dreams.
11. Fort Worth, Texas
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Business environment rank: 3
Access to resources rank: 24
Business cost rank: 74
Total score: 57.65
The Dallas-Fort Worth area of Texas is a favorable area for venture capitalists, who receive about 3.4 times ROI, according to a study by PitchBook. From 2010 to 2017, investors poured $5.4 billion into the metro area. According to WalletHub, Fort Worth is tied in fifth place with the highest growth in number of small businesses.
10. Denver, Colorado
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Business environment rank: 14
Access to resources rank: 18
Business cost rank: 59
Total score: 58.03
Denver is a hotspot for new companies, with 92 out of 1,000 businesses being less than one year old, according to Fit Small Business. Millennials also see Denver as a prime place to live, despite the high cost of housing. The city ranked No. 2 on the U.S. News and World Report’s best places to live, with high marks for job availability and quality of life.
9. Atlanta, Georgia
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Business environment rank: 26
Access to resources rank: 19
Business cost rank: 27
Total score: 58.13
A recent report by Startup Genome, a company which studies startup growth around the world, ranked Atlanta as having the 26th best startup ecosystem in the entire world. But while Startup Genome gave Atlanta’s populace second place for having the best talent pool, they might be hard to find and hire. WalletHub ranked Atlanta No. 99 for highest availability of human capital.
8. Raleigh, North Carolina
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Business environment rank: 40
Access to resources rank: 3
Business cost rank: 23
Total score: 58.61
Venture capitalists see an average of 3.2-times their ROI in Raleigh, according to PitchBook. But that’s not all Oak City has going for it. The city’s Research Triangle is hub for life sciences, and Raleigh has received $425.4 million in venture funding as of 2018. The city may even be poised to become a boomtown and often ranks high on lists related to quality of life and best cities to live in.
7. Durham, North Carolina
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Business environment rank: 39
Access to resources rank: 11
Business cost rank: 18
Total score: 58.86
Durham edged out Raleigh to take the seventh spot on WalletHub’s list. At the state level, North Carolina raised $1.1 billion in funding in 2018. Office space is pretty cheap at about $25.23 per square foot — that’s less than the national average, which hovers around $25.71 per square foot. Not bad for a city that is quickly becoming a national hub for entrepreneurs and a favorite place to live for millennials.
6. Charlotte, North Carolina
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Business environment rank: 18
Access to resources rank: 28
Business cost rank: 29
Total score: 59.03
With a statewide corporate tax rate of just 2.5 percent, it’s no wonder why many big businesses have set up headquarters in North Carolina. In Charlotte, Bank of America, Honeywell, Lowe’s and Duke Energy call the Queen City home. WalletHub ties Charlotte for first place with the highest average growth in number of small businesses. Charlotte placed No. 20 on U.S. News and World Report’s “Best Places to Live” 2019 index, and a relatively low cost of living makes the city one of the best places to set up shop.
5. Tampa, Florida
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Business environment rank: 20
Access to resources rank: 39
Business cost rank: 16
Total score: 59.29
Tampa partly has Tampa Bay Lightning owner and billionaire Jeff Vinik for its thriving startup scene, as the wealthy individual has big plans to turn Tampa into an innovation hub. Tampa’s low cost of living and friendly business environment make the Big Guava a high-ranking destination for entrepreneurs.
4. Austin, Texas
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Business environment rank: 1
Access to resources rank: 5
Business cost rank: 83
Total score: 60.05
Named the No. 1 best place to live by U.S. News and World Report for three years in a row, Austin has been making waves as one of the greatest spots for entrepreneurs. WalletHub tied Austin for first place in highest growth number of small businesses, while other lists, like Inc.’s, name Austin as the premier spot to start a business.
3. Miami, Florida
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Business environment rank: 2
Access to resources rank: 45
Business cost rank: 30
Total score: 60.48
Statewide, Florida receives the fifth-most venture capital funding out of all states, with $511 million pouring in from investors. Most of that capital finds its way to Miami. There are a host of programs, like the Knight Foundation, and venture capital funds, like 500 Startups, along with entrepreneurship programs from local universities. In 2018, Miami ranked No. 1 as having the most co-working spaces anywhere in America. WalletHub ranked Miami as having the fifth-lowest labor costs out of all big cities that made its list, but it also ranked it No. 96 in having the least available human capital.
2. Oklahoma City, Oklahoma
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Business environment rank: 12
Access to resources rank: 40
Business cost rank: 10
Total score: 60.73
If you’re not considering Oklahoma City as a place to start a business, you should. The city has been investing in its burgeoning startup scene for years, and it’s certainly been paying off. Programs and businesses of note include: i2e, a non-profit dedicated to helping startups and has about $60 million in investment capital; OK coders, a coding boot camp; and the Tom Love Innovation Hub out of the University of Oklahoma, which has a host of classes and resources for would-be-business owners.
1. Orlando, Florida
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Business environment rank: 6
Access to resources rank: 50
Business cost rank: 17
Total score: 60.93
Orlando may need to switch its nickname from the Theme Park Capital of the World to the Entrepreneur Capital of the World if its momentum keeps up. The city has a long list of incubators, investment groups, venture capital funds and co-working spaces. The city has experienced huge population growth, with 60,000 new people flocking to the city’s metro area in 2018, and its startup ecocultural is also booming. And forget about an annual startup week or weekend: 1 Million Cups hosts a weekly event for entrepreneurs to meet and exchange ideas.