Posted on Jun 15, 2017

The Top 10 U.S. Cities Most Friendly to Small Businesses

The city you decide to set up shop in may be just as important as what type of business you start. Make the wrong choice, and you could be setting yourself up for a struggle. According to WalletHub, Suisun City, California is one of the worst places for small businesses. The site took a look at a variety of factors including available funding, affordability and taxes to figure out the best and worst cities.

Other factors besides affordability and funding should factor into your own search for a small business-friendly city. Look at the livability of each city on your wish list, from co-working spaces and business accelerators, to access to culture and fine dining. Weather and recreational opportunities should also factor into your search to give you the work-life balance you’re looking for.

Here’s a look at the top 10 U.S. cities most friendly to small businesses that offer plenty of entrepreneurial resources and overall well-being.


1. Austin

Austin quietly shed its Texan-cowboy-and-country-living reputation and turned into a booming and progressive home for entrepreneurs and small business owners alike. Texas is also one of a handful of states that doesn’t impose personal income tax – which ultimately leaves more money in business owners’ pockets. The low tax is just one lure for business owners: Austin is also one of the leaders in small business growth nationwide – it had a 9.7% increase between 2010 to 2013.

Austin embraces an entrepreneurial lifestyle and progressive mindset. Kevin Johns, Director of the City of Austin’s Economic Development Department summed it up best when he told Fortune Magazine, “Austin is the best place in the nation to grow a small business … because our ecosystem has it all: entrepreneurs, incubators, investors, business school involvement and community-building events.”


2. Houston

Houston startups enjoy a cozy proximity to over over 20 Fortune 500 companies. That may not be good news for startups looking to directly compete with the likes of Targa Resources and Houston’s wealth of energy companies, but it is ideal for entrepreneurs and small businesses looking to work with big corporations and develop strategic partnerships. Houston is also home to many incubators that offer business development and planning assistance.

The combination of major corporations, a thriving startup scene and no personal income tax also attracts top talent to Houston. And the city is considerably more affordable than New York and San Francisco – two cities that squeeze out small business owners due to expensive rents and steep overhead.


3. Atlanta

The capital of the south has rapidly become a hotbed for Fortune 500 companies like Home Depot and Coca-Cola. The City of Trees boasts a thriving healthcare industry, higher education opportunities, and supports a strong startup scene with Atlanta Tech Village and Switchyards tech hubs. Atlanta has also been aggressively recruiting Millennial talent to help drive business and innovation in the city, and currently houses over 1.4 million Millennials.

Atlanta also attracts small businesses because of the ease of doing business there, including accessibility to loans, funds, and grants. And as home to the world’s busiest airport, Atlanta makes it easy for international and domestic business travelers alike to hop on a plane to just about any destination.


4. Boulder

Boulder’s friendly small business and startup scene has grown rapidly, and prompted famed entrepreneur Andrew Hyde of Startup Weekend to create Boulder Startup Week. The city also offers plenty of small business-friendly resources including co-working spaces, access to capital investors, and incubators to help keep entrepreneurs from turning into a failure statistic.

Boulder is unique in its thirst for work-life balance, despite highly ambitious talent and business owners. It’s not unusual for Boulder locals to come to the office early and then take a long break to go for a hike or bike ride in the middle of the day – things you just don’t see in New York City.


5. Las Vegas

Las Vegas still ranks as one of 2017’s best large cities to start a business in, despite being hit hard during the recession and subsequent housing crash. Wages there are a bit lower than the national average – which could be an advantage to business owners – and the city is also attractive to employees looking for reasonable housing costs. Nevada also has nobusiness income tax, personal income tax,franchise tax or even a gift tax.

And there’s more going on in Las Vegas than just casinos and big hotel groups. A shoe company turned ecommerce juggernaut is helping to turn the city around to make it more inviting for startups. Zappos tapped Las Vegas as its home headquarters, and its founder Tony Hsieh launched the Downtown Project with $50 million in funding just for startups. Hsieh is determined to help turn the Las Vegas Strip and surrounding area into an entrepreneurial hub.Las Vegas


6. Manchester

Manchester, New Hampshire attracts small business owners with its support of city agencies and accessible resources. Ease of hiring, regulations and licensing also inched Manchester onto CNN Money’s list of best cities for small business. New Hampshire itself boasts a lower business tax rate than many surrounding northeastern states like Massachusetts, Rhode Island, Vermont and Connecticut.

In addition, the state of New Hampshire attracts shoppers from nearby states due to its lack of sales tax. Manchester also appeals to business owners looking for a lower cost of living than they would find in nearby cities like Boston.


7. Provo

Depending on your political temperament, Provo might be a perfect pick for conservative business owners to set up shop. Provo currently holds the title as the most conservative city in the U.S. The city lies 43 miles south of Salt Lake City and is home to Brigham Young University. Provo attracts technology, healthcare and education business owners with an upswing in job growth and low unemployment. The city has a history of supporting small businesses and startups. In 2010, Brigham Young University ranked third for the highest number of startup companies produced through university research.

But Provo also makes another list that appeals to small business owners looking for more than just work: according to a Gallup and Healthways survey in 2012-2013, Provo ranked as a leader among communities for its overall well-being and as a satisfying place to live.


8. Sarasota

The Sarasota area has grown into a thriving hub for ecommerce businesses. CNBC even named Sarasota as one of its Top 20 Metro Areas to Start a Business in America. The state of Florida also has no income tax, which makes it easier for small business owners to hold onto their cash.

The lifestyle in Sarasota is also highly desirable to educated business owners looking for immediate access to arts and culture. And in comparison to Florida’s big cities like Miami, Sarasota is relatively affordable and still features the best parts of Florida, from year-round warmth to waterside fun and fine dining.


9. Nashville

Nashville may have made its mark as a leader in country music and music production, but it also thrives in areas like health care management, finance, insurance, printing and publishing and technology manufacturing, to name a few. Nashville’s government is also heavily involved in small business growth and works to make licensing regulations easy. Like other states on this list, the state of Tennessee has no income tax. The break further alleviates the financial load on small business owners looking to grow.

Nashville’s small business owners may also be more optimistic than anywhere else in the country. According to The Tennessean, Nashville’s small business owners lead the nation in optimism, as well as capital, customers, innovation, regulations and technology.



10. Ogden

Ogden’s city living surrounded by a mountain landscape draws young business owners looking for a low cost of living and big opportunities. Aerospace, IT software and outdoor recreation are big industries in Ogden, and  the city has a low unemployment rate of just 3.3% with projected growth.

The state of Utah as a whole also ranks high for business owners looking for an educated workforce, low cost of doing business and a thriving economy. Consumer spending is high, and cost of living is reasonable. Ogden is a prime location and has a business-focused environment for entrepreneurial minds looking for a thriving customer base.

There are plenty of cities where you can set up your small business that will appeal to your business savvy and personal sensibilities. But don’t fret if you can’t pick up and relocate just yet. Your own city probably has its own set of resources to help get you started. Check with your local Small Business Administration to ask about loans, classes and one-on-one mentorships to help get your business up and running. Work to connect with local business owners and entrepreneurs to help turn your own city into one of the most friendly places to do business.


What’s your favorite U.S. city to do business in? Did yours make the list? Let us know by leaving a comment below:


Image: Pixabay, Pexels, Pixabay


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