WalletHub – Best and Worst Small Cities For Entrepreneurs to Launch a New Business (2018)
Here is a great study of entrepreneurial capitalism across the United States
Personal finance website WalletHub analyzed data of more than 1,200 small-sized cities using 18 metrics, from investor access to labor costs, to determine this year’s best and worst small cities to grow a business.
Here are the top 20 small cities in which to start a business:
1. Holland, Michigan
2. St. George, Utah
3. Aberdeen, South Dakota
4. Wilson, North Carolina
5. Cheyenne, Wyoming
6. Clearfield, Utah
7. Ogden, Utah
8. Bismarck, North Dakota
9. Bozeman, Montana
10. Fort Myers, Florida
11. Enid, Oklahoma
12. Bountiful, Utah
13. Salisbury, North Carolina
14. Springville, Utah
15. Sanford, North Carolina
16. Brighton, New York
17. Shawnee, Oklahoma
18. LaGrange, Georgia
19. Midvale, Utah
20. Bowling Green, Kentucky
Here are the worst small cities in which to start a business:
1. Suisun City, California
2. Eastvale, California
3. Saratoga, California
4. Belmont, California
5. Crofton, Maryland
6. Norco, California
7. Pacifica, California
8. Westfield, New Jersey
9. Potomac, Maryland
10. Wilmette, Illinois
11. Ridgewood, New Jersey
12. Castro Valley, California
13. Chino Hills, California
14. San Carlos, California
15. Ellicott City, Maryland
16. Pleasant Hill, California
17. Trumbull, Connecticut
18. Arlington, Massachusetts
19. Shaker Heights, Ohio
20. Northampton, Massachusetts
In order to determine the best small cities in which to start a business, WalletHub compared 1,261 cities across three key dimensions: 1) Business Environment, 2) Access to Resources and 3) Business Costs. For our sample, we chose cities with a population of between 25,000 and 100,000 residents. “City” refers to city proper and excludes the surrounding metro area.
We evaluated each of the three key dimensions using 18 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the most favorable conditions for launching a business.
We then determined each city’s weighted average across all metrics to calculate its total score and used the resulting scores to rank-order our sample.
Business Environment – Total Points: 50
Average Length of Work Week (in Hours): Full Weight (~5.56 Points)
Average Commute Time: Full Weight (~5.56 Points)
Average Growth in Number of Small Businesses: Double Weight (~11.11 Points)
Startups per Capita: Double Weight (~11.11 Points)
Average Revenue per Business: Full Weight (~5.56 Points)
Average Growth of Business Revenues: Full Weight (~5.56 Points)
Industry Variety: Full Weight (~5.56 Points)
Access to Resources – Total Points: 25
Financing Accessibility: Double Weight (~5.56 Points)
Note: This metric was calculated as follows: Total Annual Value of Small-Business Loans / Total Number of Small Businesses
Investor Access: Double Weight (~5.56 Points)
Human-Resource Availability: Full Weight (~2.78 Points)
Note: This metric was calculated by subtracting the “unemployment rate” from the “number of job openings per number of population in labor force.”
Higher-Education Assets: Full Weight (~2.78 Points)
Note: This metric is based on WalletHub’s 2018’s College & University Rankings.
Workforce Educational Attainment: Full Weight (~2.78 Points)
Note: This metric measures the percentage of the population with at least a bachelor’s degree.
Working-Age Population Growth: Full Weight (~2.78 Points)
Note: “Working-Age Population” includes those aged 16 to 64.
Job Growth (2016 vs. 2012): Full Weight (~2.78 Points)
Business Costs – Total Points: 25
Office-Space Affordability: Full Weight (~6.25 Points)
Note: This metric measures the per-square-foot cost of commercial office space.
Labor Costs: Full Weight (~6.25 Points)
Note: This metric measures the median annual income.
Corporate Taxes: Full Weight (~6.25 Points)
Note: Data for this metric were available only at the state level.
Cost of Living: Full Weight (~6.25 Points)