The Best U.S. Cities for Small Companies

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The best urban landing spots for new businesses

According to the U.S. Small Business Administration [1], there were 30.7 million small businesses operating in the U.S. in 2018, employing 59.9 million people, or 47.3% of all U.S. employees, the SBA notes.

While these small businesses are spread across every state and city in the country, some cities stand out as being more welcoming for small companies than others, especially entrepreneurial startups just opening their doors.

Which U.S. cities provide the best base for fledgling companies? These five cities should be at the top of any entrepreneur's list.

Austin, TX

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Austin routinely gets high marks for its entrepreneurial spirit, and keeps right on rolling. Home to the University of Texas, the city is growing at four times the rate of Silicon Valley. [2]

What do business startup owners like about Austin? For starter, a reasonable cost of living, a low unemployment rate (a full percentage point below the U.S. national average in 2018 [3] and a smart and talented workforce (44.8% of Austin adults have a college degree, compared to 32% nationally). [4]

Plus, it doesn't hurt to be known as the “Live Music Capital of the World"

Salt Lake City, UT

The Great Salt Lake area is another U.S. urban center that rolls out the welcome mat for new business owners.

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Why not, as major companies like Adobe, Electronic Arts, Ancestry.com, and Oracle already call Salt Lake City home? Like Austin, Salt Lake City offers a pleasant climate and a low cost of living relative to big cities like New York, San Francisco, Los Angeles, and Boston.

Salt Lake City is currently welcoming new companies—and new residents—in droves. The city has attracted five new companies valued at USD 1 billion or more, and its new job growth rate was ranked first in the U.S. in 2017/2018 by the U.S. Bureau of Labor. [5]


Raleigh, NC

The Raleigh-Durham area is rapidly becoming a hotspot for new U.S. companies, especially when it comes to the technology and software sectors.

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The area is home to the University of North Carolina, North Carolina State University, and Duke University and has the fourth-most educated populace in the U.S., with 47% of the region's workforce holding a college degree.

New companies come to the region for the temperate weather, smart and talented workers, and yes, great college basketball. They stay for the ability to grow their companies in an ideal business climate.

Nashville, TN

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Nashville lies 538 miles due west from Raleigh-Durham. It’s the home of country music and is now home to a growing number of new businesses, many of them in the booming health care sector.

Overall, Nashville has about 800 health care businesses, while six of the nation's top 10 for-profit hospitals are also located there. [6]

U.S. News ranks Nashville as the 11th best city to live in and the seventh-best city to retire. The city's low unemployment rate of 3.0% and its average median monthly rent of $899 make it appealing to the young career professionals that small businesses need to build a burgeoning business. [7]

Portland, OR

Portland is already well known as the home of Nike, the sports shoe and apparel giant, but it's also making its mark in the technology and health care sectors, where companies see Portland as a vibrant and exciting city to open a business.

The city's job growth rate was a robust 2.9% in 2018, while future growth is expected to be 41% over the next decade, ahead of the U.S. national average. [8]

Retailers like Portland as the city has no sales tax. The city ranks in Forbes' top five U.S. cities for business, thanks to its ample (and college-trained) millennial base. The younger set is drawn to Portland for its easy, comfortable vibe, which allows new companies to attract smart, plugged-in workers who want to live in one of the greenest and most eclectic cities in the country.

Summary: Urban oases for new companies

Entrepreneurs looking for a great city to hang an “open for business" sign can't go wrong with any of the five cities listed above. All have smart workers, a good business climate, a vibrant quality of life, and great growth prospects relative to other U.S. cities.

Other businesses have already figured that out — and yours can, too.




Sources

  1. U.S. Small Business Administration (2019). 2019 Small Business Profile

  2. https://www.inc.com/surge-cities/best-places-start-business.html

  3. https://www.bls.gov/regions/southwest/summary/blssummary_austin.pdf

  4. https://www.austinchamber.com/economic-development/austin-profile/workforce

  5. https://www.sltrib.com/news/politics/2018/08/17/utah-again-leads-nation/

  6. https://www.bizjournals.com/nashville/news/2019/01/04/report-nashville-among-10-best-cities-for-starting.html

  7. https://realestate.usnews.com/places/tennessee/nashville

  8. https://www.bestplaces.net/economy/city/oregon/portland



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