The 10 Best Cities to Start a Business
Boulder, Colorado-based Grasshaven Outdoor sells canvas tepees, durable dinnerware and patterned picnic coolers: accessories necessary for glamorous camping (or “glamping,” as founder Dawn Bitz calls it). Since she quit her corporate job to start the company in 2012, Dawn has been called the “Martha Stewart of camping” and the “camping style diva.” She got the idea for the business when she was planning a camping trip with her husband and kids, but couldn’t find gear that was stylish and functional.
“It was literally one of those middle-of-the-night epiphanies,” she says, describing the moment the idea came to her.
With an e-commerce site, 17 retail locations in RV dealerships across the country and a flagship store in Boulder, the company has grown quickly. Bitz attributes much of that success to the city’s “entrepreneurial spirit,” which has helped her meet mentors, find great employees and even get access to capital. Grasshaven Outdoor employs four full-time workers and several part-time and contract employees. As she looks to expand, Bitz plans to improve the company’s website, and she hasn’t had trouble finding people to help her do that in Boulder.
“There’s just a hotbed of talent here to tap into,” Bitz says.
Bitz and other small-business owners know that choosing a location is one of the first and most important decisions business owners make. A business’s location shapes its customer base, its workforce and its access to capital and mentorship.
To understand where entrepreneurs in the U.S. can find the most success, finance site NerdWallet analyzed 183 metropolitan areas with 15,000 or more businesses and populations over 250,000. They considered six metrics to gauge business success city by city and the area’s overall economy.
Here’s what they learned:
Smaller markets pay off. All of the places on the top 10 list have populations under 1 million. The Bridgeport-Stamford-Norwalk metro area in Connecticut has the largest population of the top 10 places at 926,233, and Wilmington, North Carolina, has the smallest at 259,815.
Consider the Midwest. When you think of successful locations, places on the coasts often are the first to come to mind. However, cities in the Midwest offer a lower cost of living and less competition. Five of the top 10 places on our list are in the Midwest, including two in Indiana and one in Illinois, Iowa and Wisconsin.
Beaumont-Port Arthur, Texas, stands out. This southeast Texas metro area stands out because of its low annual housing costs and high business revenues. On average, businesses here earn 155 percent more than businesses in the other metro areas we studied.
Top 10 Places to Start a Business
1. Boulder, Colorado
With stunning Rocky Mountain views, a booming technology scene, a large natural food industry and a culture that appreciates locally made goods, it’s no surprise that Boulder tops the list. Nationally recognized brands hail from the city, including Justin’s, a maker of organic nut butters, and Crocs, the casual footwear company famous for brightly colored clogs. Boulder has abundant resources for entrepreneurs, including several co-working spaces, capital investors and incubators. Business owners can also join the Boulder Chamber to attend networking events, get listed in its directory and find out about programs such as Boulder Young Professionals, which hosts social, volunteering and professional development events.
2. Wilmington, North Carolina
A growing population, strong tourism industry and proximity to the beach make this port city ideal for businesses. Wilmington has about 15 businesses for every 100 people—the highest volume of businesses in the top 10. Nearly 900 of those businesses are downtown, including Flytrap Brewing, a craft brewery, and Fuzzy Peach, a frozen yogurt chain started by three friends who met at the University of North Carolina-Wilmington. Businesses can join the Wilmington Chamber of Commerce to get listed in its business directory, attend training seminars and go to biannual business-to-business networking expos.
3. Bridgeport-Stamford-Norwalk, Connecticut
In southwest Connecticut, just north of Long Island, the Bridgeport-Stamford-Norwalk area has a strong arts scene, educated population and financially successful businesses. The annual median income here—$63,369—is the highest of all places in the top 10. Local businesses include Amodex, a family-owned company that makes an ink and stain remover, and Mike’s Ristorante, a family-owned Italian eatery. Businesses in the area can join the Greater Norwalk Chamber of Commerce or the Bridgeport Regional Business Council to attend networking events, get listed in their business directories and get access to insurance programs through the Chamber Insurance Trust.
4. Evansville, Indiana-Kentucky
Evansville is an economic and commercial hub in the Indiana-Kentucky-Illinois Tri-State area. The city’s biggest employers include two medical centers, the local school district and Berry Plastics, a company that makes plastic packaging products. Evansville also has several cultural districts with entertainment venues, local restaurants and boutiques. Businesses can join the Southwest Indiana Chamber to get listed in its directory, get discounts on business services and join local groups, including the Diverse Business Alliance and the Downtown Alliance. The Growth Alliance for Greater Evansville also has resources including free site selection services, business expansion programs and a technology incubator.
5. Portland-South Portland-Biddeford, Maine
A small community with a big culinary culture, many of Portland’s local businesses involve food. Maine Foodie Tours offers culinary walking tours of the city, and Bite Into Maine is a popular food truck specializing in lobster rolls. Portland is also home to the SBA’s Maine Young Entrepreneur of 2010, Becky McKinnell, who founded the web design studio iBec Creative. For budding businesses, the Portland Regional Chamber of Commerce provides members with free meeting space and discounts on cellphone plans, health insurance, credit card processing and Apple products. Members of the Biddeford+Saco Chamber of Commerce & Industry are included in its business directory, can attend networking events and training workshops and get discounts on health insurance programs through the Alliance of Maine Chambers.
6. Cedar Rapids, Iowa
Cedar Rapids has a low cost of living, a downtown district with local shops and restaurants and an economy driven by food processing, manufacturing, distribution, wind energy, electronics and financial services. Local businesses include Fix Salon, a hair and beauty salon, and Brewed Awakenings, a coffee shop. The unemployment rate of 3.8 percent is the lowest of the top 10. Businesses can join the Cedar Rapids Metro Economic Alliance to get listed in its annual business directory and to attend networking events.
7. Beaumont-Port Arthur, Texas
This area, in Southeast Texas, near the Louisiana border, is home to Cajun culture, views of the Gulf of Mexico and an affordable cost of living. The average household pays $8,316 a year for housing, the lowest in the top 10, but businesses earn $2.8 million a year in revenue on average, the highest of the top 10 cities. Businesses can join the Greater Beaumont Chamber of Commerce or the Greater Port Arthur Chamber of Commerce to be included in business directories, attend networking events and participate in referral groups.
8. Green Bay, Wisconsin
Home to the Packers football team, Green Bay draws visitors from across the state for home games at Lambeau Field. In addition to football, Green Bay’s downtown has parks, museums, theaters, shops, restaurants and the CityDeck, a boardwalk along the Fox River. Almost a third of businesses here have paid employees, including Hinterland, a brewery and restaurant featuring locally sourced food. Businesses can join the Greater Green Bay Chamber to be included in its directory and attend networking events. The Chamber’s Advance Microloan program offers loans up to $75,000 for new businesses in need of startup capital.
9. Fort Wayne, Indiana
As Indiana’s second-largest city, Fort Wayne has a low cost of living, family friendly neighborhoods and a vibrant downtown. Local businesses here include The Olive Twist, an olive oil and balsamic vinegar boutique, and Pure Movement Pilates, a Pilates studio. Businesses can join Greater Fort Wayne Inc. to get listed in its business directory, attend networking events and get business referrals. The city also has a step-by-step guide to starting a business in Fort Wayne.
10. Peoria, Illinois
This college town has a low cost of living and it’s equidistant from Chicago and St. Louis. Bradley University and Caterpillar, the global construction equipment manufacturer, are located here, providing employment opportunities and drawing customers to local businesses, including The Chef and the Baker, a family-owned restaurant that sells box lunches and sweets. Peoria’s RiverFront District is the city’s main attraction, with festivals, live music, art, restaurants and shopping. Businesses can join the Peoria Chamber of Commerce to get listed in its directory, attend networking events and find advertising opportunities.
Methodology: In each place, NerdWallet looked at the average revenue of businesses, the percent of businesses with paid employees and the number of businesses for 100 people, all key indicators of success. NerdWallet evaluated the median annual income, median annual housing cost and unemployment rate in each place to assess the environment for entrepreneurs.
Ready to be your own boss? Check out 5 ingredients for startup success.
This article originally appeared on the NerdWallet Small Business Guide.
NerdWallet.com provides information, insight and consumer-driven advice about personal finance, helping people lead better lives through financial education and empowerment.
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