Florida deemed best for small businesses, according to WalletHub study
Sunday, April 28, kicks off National Small Business Week, with no shortages of businesses to support in the Sunshine State.
WalletHub released a new report on 2024′s Best Large Cities to Start a Business, with five Florida cities taking up the Top 10 slots.
“Starting a business can be very scary, considering one in every five startups doesn’t make it past the first year,” Cassandra Happe, WalletHub analyst, said. “That’s why it’s especially important to live in a city that provides an environment where new businesses can thrive, with enough capital, workers and customers to keep it going long-term.”
What makes a city best for starting a business?
In order to determine the best cities for launching a business, WalletHub compared 100 cities, across three key dimensions:
- Business environment
- Access to resources
- Business costs
Its sample considers only the city proper in each case, excluding cities in the surrounding metro area.
What is the best U.S. city to start a business? Hint — it’s found in Florida
WalletHub’s study found that Orlando is the best large city to start a business in, due in part to the fact that the number of small businesses has grown faster than in most other cities.
“It’s also one of the top cities on the Kauffman Early-Stage Entrepreneurship Index, which means that in addition to Orlando having a lot of startups, those startups also have a high survival rate,” WalletHub experts write. “One of the reasons why startups are so prevalent and successful in Orlando is that the city has a very high number of investors per capita, so new businesses are able to get the funding that they need to survive and thrive.”
Starting a business in Orlando:
- 1st – Growth in number of small businesses
- 42nd – Labor costs
- 45th – Cost of living
- 20th – Length of average workweek (in hours)
- 31st – Share of college-educated population
- 24th – Industry variety
Although Orlando is known as a retirement haven, it has one of the highest growth rates for the working-age population, so businesses have plenty of potential new employees.
What are the Top 10 U.S. cities to start a business?
Within the Top 10 slots, Florida cities take up five. Here’s all the cities that make up the top list:
- Orlando
- Tampa
- Charlotte, North Carolina
- Jacksonville
- Miami
- Atlanta, Georgia
- Forth Worth, Texas
- Austin, Texas
- Durham, North Carolina
- St. Petersburg
WalletHub also dived deeper into the second best city for entrepreneurs, Tampa taking the title. The company highlighted its low corporate tax rate, allowing businesses to keep more of their revenue. It also has a high number of investors per capita, and the combination of low taxes and high capital gives businesses more resources to survive the difficult initial years.
“The monetary benefits of Tampa are evident in the fact that the city scores very high on the Entrepreneurial Activity Index, which indicates that there is a large number of startups in the city and those startups have a high survival rate.”
What are the advantages and disadvantages of starting a business in a big city?
Talking with various business owners and experts, WalletHub collected some advice and wisdom for potential entrepreneurs. They asked their experts about the pros and cons of starting a business in a big city.
Miranda J. Welbourne Eleazar, assistant professor of management and entrepreneurship at the University of Iowa, shared that big g cities provide valuable opportunities in terms of networks, co-working spaces, and potential customers, co-founders, and employees. However, there’s some down sides.
” … they come with greater costs and competition. It may be hard to get up and running if you cannot afford the basic necessities of your new business such as employees and real estate,” Welbourne Eleazar said. “It may also be harder to stand out if many competitors are providing a similar product or service.”
Felipe G. Massa, associate professor at the University of Vermont, addressed that while bigger cities are hubs for human and financial capital, smaller cities are often more supportive of homegrown entrepreneurial efforts.
“You are more likely to get support from mentors, have customers who care deeply about your success, and have better access to government and university support.”
Want to start a business? WalletHub asks experts to give tips for aspiring entrepreneurs
In addition to general wisdom on starting a business in a large city, WalletHub’s panel of experts also shared their tips to upcoming entrepreneurs.
Christopher E. Stevens, associate professor of entrepreneurship at Gonzaga University, advised those to “start small and realistic.”
“Early-stage venture founding is a risky proposition, and it makes a difference if you approach it with realistic goals, a network of support and advice in place, and if you scale your goals around what is both realistic and manageable – especially if most of your resources will come from your personal savings or credit, as it does with most small businesses started in the US,” Stevens said.
Dr. Briana Stenard, associate professor of management and entrepreneurship at Mercer University, recommended to start your business in the leanest way you can. She added if you start leanly, you can develop a customer base and collect feedback on your prices and products/services while saving up money for your potential business.
“You will prove the model before you spend money on physical space. This would allow you to save up enough capital from your lean business to fund the growth/expansion of your business,” Stenard said.
