Best Cities for Small Business Startups

Comparing lists of top cities for small businesses reveals 5 excellent places to start yours.
austin city lights
Reviews of the best cities for small business reveals five of the most standout choices. (Photo: Stuart Seeger/Flickr)

If you could choose where to start your small business, which city would you pick?

The Small Business Friendliness Survey from Thumbtack.com asked nearly 18,000 small business owners to rate their cities on how small business-friendly they are. Entrepreneur magazine looked for cities worth moving to if you want to start a business, and Nerdwallet examined the most entrepreneurial states.

A comparison of these lists and other reviews of the best cities for small business reveals five truly standout choices.

Austin Texas

The state of Texas has no corporate or individual income tax. (Photo: Jeremy Keith/Flickr)

Austin, Texas

Austin, the tech capital of Texas, is booming. Not only was it named the number one city for young entrepreneurs this year by Nerdwallet, but it ranked number three in overall small business friendliness in Thumbtack.com’s survey.
The state of Texas has no corporate or individual income tax, a very business-friendly regulatory structure and the second largest GDP behind California. It has bounced back from the recession due in large part to a supportive business development environment and robust network of small business development centers.

The University of Texas, a thriving city center and a cultural scene that includes museums, art galleries and ballet make the “live music capital of the world” an attractive place to do business, and live.

Nashville Tennessee

With a metro area population of 1.5 million and a pool of students and graduates from six major colleges, new small businesses have access to a well-educated workforce.(Photo: f11photo/Shutterstock)

Nashville, Tennessee

Number three on Entrepreneur magazine’s list of 9 hot startup cities and number six on Thumbtack.com’s list of the most small business-friendly cities, Nashville is a music hub, but it is also a center for digital media, healthcare and technology.

With a metro area population of 1.5 million and a pool of students and graduates from six major colleges, new small businesses have access to a well-educated workforce.

The cost of living is low, and business costs are estimated to be 5.1 percent below the national average. Combine those savings with nonprofits that support business startups, a regulatory structure friendly to small business and access to venture capital, and Nashville may be a grand ole place to start your small business.

Denver Colorado

The small business opportunities in Denver center on high-growth industries such as computer platform design, aerospace, real estate and technology. (Photo: Larry Johnson/Flickr)

Denver, Colorado

The mile-high city has made its way to most lists of the best places to start a small business. It was number four on Nerdwallet’s list of the best cities for young entrepreneurs and number two on Forbes’ 2014 list of best places to launch a startup. Colorado is number two on Nerdwallet’s list of most entrepreneurial states, with a high rate of small business loans and an active venture capital network.

The small business opportunities in Denver center on high-growth industries such as computer platform design, aerospace, real estate and technology.

With museums, galleries, the second largest performing arts center in the nation after New York’s Lincoln Center, outdoor recreation galore and a lively inner city night life, it’s little wonder that in 2016 Denver topped U.S. News’ list of best places to live.

Salt Lake City, Utah

Salt Lake City was number three on Nerdwallet’s best cities for young entrepreneurs. (Photo: Garrett/Flickr)

Salt Lake City, Utah

Salt Lake City was number three on Nerdwallet’s best cities for young entrepreneurs, and the state of Utah was their number one pick for the most entrepreneurial state.

Known as the “silicon slopes” because of the thriving computer software and hardware industry, Salt Lake City is home to computer giants including Adobe and Workday. Close proximity to major software companies and more than $1 billion spent by venture capitalists make Salt Lake City a promising place for launching a small business in the technology sector.

Two universities contribute to the highly educated workforce, and the beautiful terrain offers opportunities for first-class skiing and other winter sports.

Oklahoma City

Oklahoma City has a low cost of living and therefore a low cost of doing business.(Photo: Matthew Rutledge/Flickr)

Oklahoma City, Oklahoma

Entrepreneur Magazine chose Oklahoma City as their number one city worth moving to if you want to start a new business, as did Kiplinger. Thumbtack.com gave Oklahoma City an A+ for ease of starting a small business, small business friendly regulations, employment, labor and hiring rules and licensing.

Oklahoma City has a low cost of living — 10 percent below the national average — and a low cost of doing business. No wonder it has one of the highest rates of small businesses startups of any major city in the United States.

Though taxes are higher than in the other cities on this list, the government has established incentives to help offset these costs. Oklahoma City also offers strong business lending and nonprofits dedicated to small business investing.

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