Small-business confidence has surged to record levels in 2018, with many small-business owners optimistic about recent tax reforms, according to the latest CNBC/SurveyMonkey Small Business Survey. However, as any entrepreneur knows, starting your own business is never a sure bet.
While starting a new business in a less-populated area has its risks — fewer people can mean less talent and resources, or even fewer customers — smaller cities also tend to offer lower costs for anything from office space to labor.
With that in mind, financial website WalletHub looked at 1,261 U.S. small cities with populations between 25,000 and 100,000 people and ranked them based on their potential attractiveness to small-business owners.
The site rated the locations on 18 key metrics across three different categories: Business Environment (including average revenue growth per business, start-ups per capita and average length of work week and commute times), Access to Resources (number of working age, college-educated residents in the area, etc.) and Business Costs (cost of living, office space affordability and others).
So where is the best small city in America to start a new business?
Holland, Michigan easily topped WalletHub's rankings, thanks to a combination of relatively low business costs and easy access to resources like a qualified workforce. The city of just over 33,000 people is located near the shores of Lake Michigan in the western part of the state, about a half-hour drive from Michigan's second most-populated city, Grand Rapids, and roughly an hour from Kalamazoo, the home of Western Michigan University, which has an enrollment of nearly 23,000 students.
And though WalletHub's rankings include small cities located all over the U.S., Utah fared well with six different cities in the top 20. Last year, USA Today named Utah the U.S. state with the best business climate, thanks to a growing working-age population and friendly regulatory environment. North Carolina had three in the top 20.
Check out the 20 best small cities for starting a business in the U.S., based on WalletHub's rankings (the city's rankings in each of the three categories are below, along with a total score on a 100-point scale):