City size matters when choosing a launching pad for a startup. And as many veteran entrepreneurs — and failed startups — understand well, bigger is not always better. Depending on an entrepreneur’s type of business and personal preferences, a city with a smaller population can be a better option.
Of course, every small city offers unique advantages and disadvantages to prospective ventures. Lower overhead costs, stronger relationships with customers and the potential to become a big fish in a little pond are among the benefits. But the drawbacks come plenty as well. For one, entrepreneurs seeking to cultivate a large professional network aren’t likely to fill their roster in a town with fewer residents. Other restrictions might include limited industry options, a less diverse customer base and difficulty attracting top talent.
Ahead of National Small Business Week, WalletHub’s analysts compared the business-friendliness of 1,268 small-sized cities to identify the best overall for launching an enterprise. Our data set of 15 key metrics ranges from “average growth in number of small businesses” and “prevalence of investors” to “office-space affordability” and “corporate taxes.” Scroll down for the winners, advice from business experts and a full description of our methodology.
|Overall Rank||City||Total Score||Business Environment Rank||Access to Resources Rank||Business Costs Rank|
|2||North Chicago, IL||48.57||1||655||626|
|4||Jefferson City, MO||45.08||554||96||3|
|5||La Vergne, TN||45||6||738||396|
|6||Inver Grove Heights, MN||44.82||2||561||887|
|10||Deerfield Beach, FL||44.47||23||1052||219|
|14||East Chicago, IN||44.24||31||1109||187|
|15||Deer Park, TX||44.06||4||909||857|
|18||Riviera Beach, FL||43.89||66||890||234|
|19||Maryland Heights, MO||43.83||76||517||166|
|20||Rapid City, SD||43.81||189||526||15|
Reported by WalletHub