Small Business

The worst cities to start your own business

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Starting a business can be tough no matter where you are, but a study by WalletHub finds the cities where it can be even harder. The study used 13 metrics to rank 150 American cities including the cost of living, affordability of office space and educational attainment of the local labor force. All but one are either in California or New Jersey.

10. Anaheim, CA

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Even though the city has one of the best five-year survival rates for new businesses, it's one of the most expensive places to live. Add to that very low employee availability.

9. San Jose, CA

San Jose, Calif.
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"San Jose has some of the highest annual salaries in the country, which means entrepreneurs should expect to shell out big bucks to future employees," said WalletHub spokesperson Jill Gonzalez.

8. Santa Ana, CA

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This city ranks last in workforce education level. Only about 10 percent of the population has a bachelor's degree or higher.

7. Oakland, CA

View of downtown Oakland, California.
Justin Solomon | CNBC

Oakland has little access to financing, plus it ranks in the bottom 20 for affordable office space, according to the study.

6. Ontario, CA

Source: Mike Male | Wikipedia

This city ranks third for the least educated workforce. About 13 percent of the population has a bachelor's degree or higher according to the study.

5. Fremont, CA

Fremont, California
Source: City of Fremont, California

"The median annual salary in Fremont is higher than any other city on the list at $101,000—bad news for entrepreneurs looking for new hires," said Gonzalez.

4. Yonkers, NY

Source: City of Yonkers

Yonkers has the most limited employee availability. WalletHub measured that by comparing job openings per capita to the city's unemployment rate.

3. Garden Grove, CA

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"Garden Grove has some of the lowest numbers in terms of employee availability," said Gonzalez.

2. Jersey City, NJ

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This city ranks second for the most expensive office space with an average of about $30 per square foot, reports WalletHub. It also has the second most limited employee availability.

1. Newark, NJ

The Bridge Street Bridge, Passaic River and Newark skyline are seen from Harrison, New Jersey.
Emile Wamsteker | Bloomberg | Getty Images

Newark ranked last out of 150 cities in the report because of its very limited employee availability, low workforce education level and high local cost of living.