The Definitive Guide to Business

These are the 20 best small American cities for starting a business

Getty Images

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):

20. Bowling Green, Kentucky

Total score: 53.31

Business environment ranking: 48

Access to resources ranking: 235

Business costs ranking: 275

19. Midvale, Utah

Total score: 53.33

Business environment ranking: 411

Access to resources ranking: 20

Business costs ranking: 158

18. LaGrange, Georgia

Total score: 53.34

Business environment ranking: 614

Access to resources ranking: 165

Business costs ranking: 64

17. Shawnee, Oklahoma

Total score: 53.34

Business environment ranking: 528

Access to resources ranking: 265

Business costs ranking: 44

16. Brighton, New York

Total score: 53.36

Business environment ranking: 141

Access to resources ranking: 459

Business costs ranking: 169

15. Sanford, North Carolina

Total score: 53.43

Business environment ranking: 803

Access to resources ranking: 284

Business costs ranking: 5

14. Springville, Utah

Total score: 53.44

Business environment ranking: 22

Access to resources ranking: 599

Business costs ranking: 170

13. Salisbury, North Carolina

Total score: 53.53

Business environment ranking: 133

Access to resources ranking: 563

Business costs ranking: 4

12. Bountiful, Utah

Total score: 53.58

Business environment ranking: 175

Access to resources ranking: 69

Business costs ranking: 173

11. Enid, Oklahoma

Total score: 53.72

Business environment ranking: 213

Access to resources ranking: 375

Business costs ranking: 73

These are the 10 happiest states in the US
These are the 10 happiest states in the US

10. Fort Myers, Florida

Total score: 53.75

Business environment ranking: 120

Access to resources ranking: 136

Business costs ranking: 138

9. Bozeman, Montana

Total score: 53.86

Business environment ranking: 950

Access to resources ranking: 5

Business costs ranking: 212

8. Bismarck, North Dakota

Total score: 54.31

Business environment ranking: 15

Access to resources ranking: 85

Business costs ranking: 454

7. Ogden, Utah

Total score: 54.73

Business environment ranking: 245

Access to resources ranking: 78

Business costs ranking: 31

6. Clearfield, Utah

Total score: 55.68

Business environment ranking: 152

Access to resources ranking: 84

Business costs ranking: 36

5. Cheyenne, Wyoming

Total score: 57.02

Business environment ranking: 1

Access to resources ranking: 582

Business costs ranking: 130

4. Wilson, North Carolina

Total score: 57.07

Business environment ranking: 121

Access to resources ranking: 102

Business costs ranking: 65

3. Aberdeen, South Dakota

Total score: 57.18

Business environment ranking: 233

Access to resources ranking: 132

Business costs ranking: 13

2. St. George, Utah

Total score: 58.39

Business environment ranking: 16

Access to resources ranking: 286

Business costs ranking: 58

1. Holland, Michigan

The Big Red Lighthouse in Holland, MI.
Education Images/UIG | Getty Images

Total score: 60.62

Business environment ranking: 318

Access to resources ranking: 3

Business costs ranking: 42

Like this story? Like CNBC Make It on Facebook!

Don't Miss:

The 10 best places to find a job in 2018

The cities with the 10 highest starting salaries in 2018

Here's how much it costs for a family to live in the 10 biggest US cities
Here's how much it costs for a family to live in the 10 biggest US cities