Small Business Loans

Best Cities for Small Business

by
Updated
There are more than five million companies in the U.S. And more than 76% of them have less than 10 employees, according to the U.S. Census Bureau.
Young adults sharing a meal
Young adults sharing a meal Source: Getty Images

There are more than five million companies in the U.S. And more than 76% of them have less than 10 employees, according to the U.S. Census Bureau.

Small businesses are an important part of the economy. To determine the best cities in the country for small businesses, we looked at 11 data points from eight reputable sources. Below you will find our results, as well as a detailed methodology explaining how we arrived at them.

The Best Cities for Small Business Owners

To determine the best cities for small business ownership, we analyzed factors relating to taxes as well as the economic and the business environments. We then combined all of these three categories and ranked them from the best to the worst.

1. Boulder, CO

  • Taxes: 14
  • Economy: 6
  • Business Community: 17

2. Fort Collins, CO

  • Taxes: 14
  • Economy: 9
  • Business Community: 19

3. Columbus, OH

  • Taxes: 6
  • Economy: 17
  • Business Community: 26

4. Charlottesville, VA

  • Taxes: 1
  • Economy: 34
  • Business Community: 21

5. Austin-Round Rock, TX

  • Taxes: 49
  • Economy: 2
  • Business Community: 8

The Rest of the Best

The five above were tops, but 195 other cities were under consideration. Where did yours rank?

Final Rank
City
Taxes
Economy
Business Community 1
Boulder, CO
14
6
17 2
Fort Collins, CO
14
9
19 3
Columbus, OH
6
17
26 4
Charlottesville, VA
1
34
21 5
Austin-Round Rock, TX
49
2
8 6
Dallas-Fort Worth-Arlington, TX
49
3
16 7
Cincinnati, OH-KY-IN
6
28
41 8
Colorado Springs, CO
14
11
55 9
Ann Arbor, MI
29
40
22 10
Grand Rapids-Wyoming, MI
29
32
34 11
Denver-Aurora-Lakewood, CO
14
24
64 12
Houston-The Woodlands-Sugar Land, TX
49
26
28 13
Richmond, VA
1
57
58 14
San Antonio-New Braunfels, TX
49
15
57 15
Madison, WI
22
32
69 16
Naples-Immokalee-Marco Island, FL
75
42
12 17
Provo-Orem, UT
107
4
19 18
College Station-Bryan, TX
49
45
45 18
Lansing-East Lansing, MI
29
87
23 20
Kalamazoo-Portage, MI
29
61
53 21
Amarillo, TX
49
7
88 22
Virginia Beach-Norfolk-Newport News, VA-NC
1
37
108 23
Greeley, CO
14
8
127 24
Lubbock, TX
49
18
87 25
Appleton, WI
22
31
111 25
Jacksonville, FL
75
44
45 27
Barnstable Town, MA
100
30
36 27
Crestview-Fort Walton Beach-Destin, FL
75
53
38 29
Green Bay, WI
22
50
97 30
Waco, TX
49
29
99 31
Killeen-Temple, TX
49
25
105 32
Gainesville, FL
75
93
15 33
Cape Coral-Fort Myers, FL
75
63
50 34
Roanoke, VA
1
35
155 35
Burlington-South Burlington, VT
26
103
63 36
Ogden-Clearfield, UT
107
5
82 36
Orlando-Kissimmee-Sanford, FL
75
72
47 38
Bridgeport-Stamford-Norwalk, CT
36
87
72 38
Raleigh, NC
155
10
30 40
Sioux Falls, SD
19
12
171 41
Atlanta-Sandy Springs-Roswell, GA
112
36
56 41
Seattle-Tacoma-Bellevue, WA
128
51
25 43
Tallahassee, FL
75
119
13 44
Baltimore-Columbia-Towson, MD
20
109
80 44
Charleston-North Charleston, SC
66
48
95 44
Santa Rosa, CA
166
40
3 47
Wilmington, NC
155
38
18 48
Dayton, OH
6
55
151 48
El Paso, TX
49
61
102 50
Lynchburg, VA
1
74
138 50
Milwaukee-Waukesha-West Allis, WI
22
120
71 52
Des Moines-West Des Moines, IA
117
13
84 52
Omaha-Council Bluffs, NE-IA
91
1
122 54
Tampa-St. Petersburg-Clearwater, FL
75
70
70 55
Kansas City, MO-KS
120
58
42 56
Cleveland-Elyria, OH
6
151
67 57
San Luis Obispo-Paso Robles-Arroyo Grande, CA
166
58
1 58
Bremerton-Silverdale, WA
128
66
33 59
Cedar Rapids, IA
117
22
94 59
Lexington-Fayette, KY
27
73
133 61
Detroit-Warren-Dearborn, MI
29
129
76 62
Charlotte-Concord-Gastonia, NC-SC
155
21
60 62
North Port-Sarasota-Bradenton, FL
75
117
44 62
Salt Lake City, UT
107
14
115 65
Canton-Massillon, OH
6
123
108 66
St. Louis, MO-IL
120
39
81 67
Laredo, TX
49
102
90 67
Palm Bay-Melbourne-Titusville, FL
75
106
60 69
Manchester-Nashua, NH
65
80
97 70
Pittsburgh, PA
40
138
65 71
Port St. Lucie, FL
75
125
47 72
Worcester, MA-CT
100
27
122 73
Portland-South Portland, ME
93
125
32 74
Boston-Cambridge-Newton, MA-NH
100
49
102 74
Durham-Chapel Hill, NC
155
23
73 76
Corpus Christi, TX
49
71
133 76
Indianapolis-Carmel-Anderson, IN
140
20
93 76
Oxnard-Thousand Oaks-Ventura, CA
166
80
7 76
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
40
173
40 80
Minneapolis-St. Paul-Bloomington, MN-WI
123
42
89 80
Pensacola-Ferry Pass-Brent, FL
75
97
82 82
San Jose-Sunnyvale-Santa Clara, CA
166
85
4 83
Albany-Schenectady-Troy, NY
134
91
31 83
Harrisburg-Carlisle, PA
40
111
105 85
San Francisco-Oakland-Hayward, CA
166
86
5 86
Akron, OH
6
136
116 86
Santa Maria-Santa Barbara, CA
166
83
9 88
Toledo, OH
6
122
131 89
Beaumont-Port Arthur, TX
49
100
114 89
Youngstown-Warren-Boardman, OH-PA
6
125
132 91
Savannah, GA
112
76
78 92
Louisville/Jefferson County, KY-IN
27
66
176 93
Lincoln, NE
91
19
164 93
Olympia-Tumwater, WA
128
120
26 95
Vallejo-Fairfield, CA
166
95
14 96
Brownsville-Harlingen, TX
49
105
122 97
Miami-Fort Lauderdale-West Palm Beach, FL
75
153
49 98
Deltona-Daytona Beach-Ormond Beach, FL
75
145
59 99
Huntsville, AL
93
112
76 100
Asheville, NC
155
92
36 100
Kennewick-Richland, WA
128
63
92 102
San Diego-Carlsbad, CA
166
114
6 103
Washington-Arlington-Alexandria, DC-VA-MD-WV
35
132
120 104
McAllen-Edinburg-Mission, TX
49
107
133 105
Norwich-New London, CT
36
114
141 106
Trenton, NJ
71
78
143 107
Salisbury, MD-DE
20
147
128 108
Santa Cruz-Watsonville, CA
166
129
1 109
Greenville-Anderson-Mauldin, SC
66
58
173 110
Hartford-West Hartford-East Hartford, CT
36
159
104 111
Rochester, NY
134
103
65 112
Flint, MI
29
176
99 113
Allentown-Bethlehem-Easton, PA-NJ
40
149
120 114
Urban Honolulu, HI
93
100
118 115
New York-Newark-Jersey City, NY-NJ-PA
71
168
75 116
Boise City, ID
111
54
153 117
Nashville-Davidson--Murfreesboro--Franklin, TN
195
16
110 117
Phoenix-Mesa-Scottsdale, AZ
123
114
84 119
Lancaster, PA
40
154
128 120
Los Angeles-Long Beach-Anaheim, CA
166
146
11 121
Reading, PA
40
150
141 122
Sacramento--Roseville--Arden-Arcade, CA
166
158
10 123
Columbia, SC
66
133
137 124
Portland-Vancouver-Hillsboro, OR-WA
146
108
84 125
Salinas, CA
166
151
28 126
Buffalo-Cheektowaga-Niagara Falls, NY
134
113
99 127
Fort Wayne, IN
140
51
157 128
Augusta-Richmond County, GA-SC
112
90
150 128
Springfield, MA
100
63
189 130
Erie, PA
40
177
138 131
New Haven-Milford, CT
36
172
148 132
Spokane-Spokane Valley, WA
128
128
105 133
Ocala, FL
75
171
118 134
Syracuse, NY
134
143
90 135
Tucson, AZ
123
133
112 136
Oklahoma City, OK
164
45
160 137
Champaign-Urbana, IL
186
143
42 137
Prescott, AZ
123
169
79 139
Atlantic City-Hammonton, NJ
71
180
122 139
Modesto, CA
166
173
34 141
Springfield, MO
120
117
138 142
Chico, CA
166
188
24 143
Winston-Salem, NC
155
45
181 144
Lakeland-Winter Haven, FL
75
162
145 145
Stockton-Lodi, CA
166
167
51 145
York-Hanover, PA
40
166
178 147
Baton Rouge, LA
149
141
95 148
Greensboro-High Point, NC
155
89
143 149
Myrtle Beach-Conway-North Myrtle Beach, SC-NC
66
156
170 150
Chicago-Naperville-Elgin, IL-IN-WI
186
175
39 150
Davenport-Moline-Rock Island, IA-IL
117
99
184 150
Fayetteville, NC
155
123
122 150
Spartanburg, SC
66
137
197 154
Evansville, IN-KY
140
77
186 154
Salem, OR
146
110
147 156
Scranton--Wilkes-Barre--Hazleton, PA
40
185
179 157
Topeka, KS
190
56
161 158
Utica-Rome, NY
134
141
133 159
Binghamton, NY
134
159
116 159
Tulsa, OK
164
82
163 161
South Bend-Mishawaka, IN-MI
140
83
190 162
Birmingham-Hoover, AL
93
159
162 162
Hickory-Lenoir-Morganton, NC
155
74
185 164
Merced, CA
166
197
54 165
Fresno, CA
166
200
52 166
Riverside-San Bernardino-Ontario, CA
166
181
74 167
Visalia-Porterville, CA
166
196
62 168
Anchorage, AK
49
184
192 169
Yakima, WA
128
148
152 170
Knoxville, TN
195
69
166 171
Bakersfield, CA
166
198
67 172
Jackson, MS
71
179
182 173
Macon, GA
112
163
158 174
Duluth, MN-WI
123
140
175 175
Hagerstown-Martinsburg, MD-WV
149
133
158 176
Eugene, OR
146
183
112 177
Columbus, GA-AL
112
165
169 178
Providence-Warwick, RI-MA
104
178
167 179
Albuquerque, NM
110
189
153 180
Fayetteville-Springdale-Rogers, AR-MO
192
66
198 181
Wichita, KS
190
79
188 182
New Orleans-Metairie, LA
149
182
130 183
Chattanooga, TN-GA
195
93
174 184
Reno, NV
144
154
165 184
Tuscaloosa, AL
93
187
183 186
Little Rock-North Little Rock-Conway, AR
192
98
176 187
Clarksville, TN-KY
195
139
146 187
Mobile, AL
93
193
194 187
Montgomery, AL
93
192
195 190
Memphis, TN-MS-AR
195
96
191 191
Charleston, WV
105
190
196 192
Peoria, IL
186
157
155 193
Rockford, IL
186
164
149 194
Huntington-Ashland, WV-KY-OH
105
199
199 195
Lafayette, LA
149
191
168 196
Shreveport-Bossier City, LA
149
193
172 197
Las Vegas-Henderson-Paradise, NV
144
186
187 198
Fort Smith, AR-OK
192
129
200 199
Gulfport-Biloxi-Pascagoula, MS
149
195
180 200
Kingsport-Bristol-Bristol, TN-VA
195
170
193

The Top (and Bottom) Five Cities for...

Colorado took the top two spots on the list along with two Texas cities in the top six. Here we take a specific look at a few of the data points and explain them in more detail.

Unemployment Rate

Boulder and Fort Collins, Col., both hold unemployment rates under 3%, according to the Bureau of Labor Statistics, and ranked fifth and seventh in this data point, respectively. California had the six worst rates, all over 8%.

Rank
City
Rate
1Sioux Falls, SD2.2
2Burlington-South Burlington, VT2.5
2Manchester-Nashua, NH2.5
4Boston-Cambridge-Newton, MA-NH2.8
4Boulder, CO2.8
Rank
City
Rate
200Visalia-Porterville, CA11.3
199Merced, CA10.5
198Bakersfield, CA10.3
197Fresno, CA9.7
196Modesto, CA8.7

Cost of Living

A city’s cost of living of living is important both for consumers and businesses. Not all cities had data available on infoplease.com. Those cities were given a base number of 100 for this data point. Texas and Tennessee are some of the cheapest states, holding nine of the top 15 on this list.

Rank
City
COL
1McAllen-Edinburg-Mission, TX85
2Brownsville-Harlingen, TX85.8
3Fort Smith, AR86.1
4Indianapolis-Carmel-Anderson, IN87.2
5Killeen-Temple, TX87.4
Rank
City
COL
200New York-Newark-Jersey City, NY-NJ216.7
199Honolulu, HI165.7
198San Francisco-Oakland-Hayward, CA164
197North Port-Sarasota-Bradenton, FL159
196San Jose-Sunnyvale-Santa Clara, CA156.1

Number of Offices

Small businesses have a lot of obstacles to overcome in order to succeed. A local coffee shop with a Starbucks down the street has to find a way to compete with a large corporation. We took a look at the number of corporate, subsidiary, and regional managing offices in each city (from U.S. Census Bureau data) with a smaller number being more ideal for small businesses.

Rank
City
Offices
1New York-Newark-Jersey City, NY-NJ-PA2,697
2Los Angeles-Long Beach-Anaheim, CA1,824
3Dallas-Fort Worth-Arlington, TX1,705
4Chicago-Naperville-Elgin, IL-IN-WI1,655
5Washington-Arlington-Alexandria, DC-VA-MD-WV1,239
Rank
City
Offices
200Merced, CA7
199Yakima, WA12
198Prescott, AZ15
197Bremerton-Silverdale, WA16
196Kennewick, Richland WA17

Experts' Take

To vary our coverage of the best cities for small business, we put the data aside and sought out experts for answers to questions of concern.

Stay tuned as our experts weigh in.

Methodology

In order to determine the best cities for small businesses in the U.S. we looked at 11 data points from eight reputable sources.

Data for the regulatory environment was not available and was not included in the study. We focused on areas of data that would help a small business be sustainable, but also flourish based on the economic traits of the city.

Below, we breakdown each statistic and point to its origin. Those marked with an asterisk are state-based (not city-based).

Taxes

  1. Average State + Local Sales Tax Rate * / SalesTaxHandbook
  2. Small Business Tax Index * / Small Business Tax Index
  3. 2017 State Business Tax Climate Index * / Tax Foundation

Economy

  1. Unemployment Rate / Bureau of Labor Statistics
  2. Median household income / U.S. Census Bureau
  3. Forbes best states for business * / Forbes
  4. Cost of living / infoplease

Business Community

  1. Percentage of population 25 years and older with at least a bachelor's degree / U.S. Census Bureau
  2. Number of Small Business Association offices/resources * / Small Business Association
  3. Number of mortgage and nonmortgage loan brokers / U.S. Census Bureau
  4. Number of corporate, subsidiary, and regional managing offices / U.S. Census Bureau