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Why you should move to the South to start your business

Charlotte, North Carolina.
Skiserge1 | Getty Images
Charlotte, North Carolina.

If you're thinking about starting a business, you may want to move.

Most of the top cities in America for economic opportunity are in the South, according to a recent study by Yelp, which used data from July to September, 2017.

Economic opportunity was determined based on the probability of the area's businesses remaining open for the next three months. This was calculated by using business location, category, and other Yelp-related activity, such as how many people call the establishment or map directions to it.

A recent academic study released by Harvard professors shows that Yelp data can predict business growth, as measured by the Census Bureau, before official statistics are released, with its predictive power increasing with population density, income, and education level. The site has amassed 135 million reviews and tens of millions of users, often making it a better source of information on the economy than government data, says Carl Bialik, Yelp's data science editor.

The top 10 cities in America for economic opportunity are:

1. Charlotte, NC
2. Jacksonville, FL
3. Omaha, NE
4. Orlando, FL
5. Charleston, SC
6. Las Vegas, NV
7. Tampa, FL
8. Dallas, TX
9. Salt Lake City, UT
10. Houston, TX

Populations in the top markets are generally rising faster and are projected to continue to rise at a higher rate than in the other, lower-ranked cities, according to Yelp. Charlotte's population, for example, is expected to double in size by 2030. These expanding communities help spur homebuilding and consumer spending, two of the main forces that help drive economic expansion.

In addition to Charlotte's growing population, the city hosts many corporate headquarters (Bank of America and Duke Energy among them) and boasts a cost of living 1.2 percent below the national average.

The fate of a business ultimately depends on its individual characteristics, but "if it's like the average business in that [high-ranked] area, it will succeed," said Bialik.

Of the 50 cities Yelp looked at, Seattle, Portland, Maine, and Boston had the worst economic opportunity. These areas have more competition, higher rents and a high cost of living.

In July, financial website WalletHub conducted a similar study and found that 10 out of 15 of the best cities in America to start a business are in the South. Charlotte was third on their list.

Apartment List's September study, "which cities offer the greatest economic potential for millennials?", also ranked Omaha, Charleston and Houston among the top 10 metros.