Between startup costs, regulations, and legal hurdles, there are many factors to consider when starting a business. But as a recent study shows, sometimes the most important one could be the city itself.
WalletHub recently conducted a study of more than 1,300 small cities — each with a population of 25,000 to 100,000 — to determine which were the best for starting a business. The personal finance website evaluated each city across three categories: business environment, access to resources, and business costs.
The business environment category considered average commute time, startups per capita, and industry variety, among other factors. Access to resources considered factors such as higher education access and investor access, while business costs factored in cost of living, taxes, labor costs, and office-space affordability.
WalletHub gave each city a score based on its weighted average across the metrics and ranked each city based on this overall score.
The analysis used data from the US Census Bureau, Bureau of Labor Statistics, Federal Deposit Insurance Corporation, Indeed, and other sources.
“The benefits of starting a business in a small city include lower overhead costs, stronger relationships with customers and the potential to become a big fish in a little pond,” WalletHub analyst Chip Lupo said in the report.
Lupo also noted the shortcomings of starting a business in a small city. “Entrepreneurs who want to build a large professional network aren’t likely to make as many connections in a town with fewer residents,” he said. “Other restrictions might include limited industry options, a less diverse customer base, and difficulty attracting and keeping top talent.”
California appeared most often in the list of 1,334 cities, while Florida and Utah dominated the top 15 with a total of 10 cities between them.
Alaska and Vermont appeared least on the full list, each represented by only one city: Fairbanks, Alaska, and Burlington, Vermont.
See the top 15 small cities in WalletHub’s report.
When photos of some cities were unavailable, Business Insider used photos of nearby cities.
15. Palm Beach Gardens, Florida
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14. Midvale, Utah
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13. Post Falls, Idaho
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12. Lake Worth Beach, Florida
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11. South Bradenton, Florida
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10. Dover, Delaware
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9. Ocala, Florida
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8. Cheyenne, Wyoming
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7. Boca Raton, Florida
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6. Cedar City, Utah
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5. Greenville, South Carolina
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4. Bozeman, Montana
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3. Washington, Utah
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2. Fort Myers, Florida
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1. St. George, Utah
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