The majority of small business owners in the US are optimistic about current business conditions, according to multiple polls. But if you're one of the many Americans who dream about opening your own business, it's important to remember that starting a business is never a sure bet — and it's worth researching which areas have the best conditions for getting started.
Financial website WalletHub published a study on Monday that looks at 100 large US cities to determine which ones offer the best conditions for launching a new business. Three Florida cities are among the five best large cities for starting a business, according to WalletHub, while New York City and Los Angeles don't even crack the top 25.
For its study, WalletHub compared 100 different cities — ranging in size from Baton Rouge (population of roughly 225,000 people) to New York City (8.6 million population) — and evaluated them based on three elements: the business environment, access to resources and business costs. Within those three categories, WalletHub rates each of the 100 cities based on 19 key metrics, including start-ups per capita, the number of working age and college-educated residents in the area, local cost of living and labor costs, among others. Each city received a total score on a 100-point scale based on how it performed in each metric.
Orlando, the Florida city of over 280,000 people landed the top spot on the site's ranking. The home of Walt Disney World scored the top spot thanks to ranking sixth overall in terms of the local business environment, while WalletHub ranked the city 17th overall in terms of business costs. On the other hand, Orlando ranked 50th in the "access to resources" category.
Oklahoma City, which topped WalletHub's 2018 ranking of the best large cities for starting a business, placed second on this year's list. Meanwhile, two other Florida cities — Miami and Tampa — landed top-five spots on WalletHub's ranking, finishing at third and fifth, respectively. Austin, Texas landed in the fourth spot.
Here are the top 10 best large cities in which to start a business, according to WalletHub.
1. Orlando, Florida
2. Oklahoma City, Oklahoma
3. Miami, Florida
4. Austin, Texas
5. Tampa, Florida
6. Charlotte, North Carolina
7. Durham, North Carolina
8. Raleigh, North Carolina
9. Atlanta, Georgia
10. Denver, Colorado
The two biggest US cities by population, New York City and Los Angeles, ranked 66th and 25th overall on WalletHub's list. Both cities' rankings were weighed down by the high costs that business-owners face in those areas, as both New York and Los Angeles are among the 10 least affordable metro areas in the country in terms of the cost of living.
Cleveland and Pittsburgh are two of the cities that fell to the bottom of WalletHub's rankings for the best large cities for starting a business — they're 98th and 99th, respectively — while Chesapeake, Virginia (population: 240,000) ranks last.
Other details WalletHub found in compiling the rankings include the fact that Toledo, Ohio, while ranked 96th overall, offers the lowest annual rent for office space, at $11.93 per square foot. That's 6.7 times cheaper than San Francisco, where the price is $80.22 per square foot, according to WalletHub.
Meanwhile, Miami boasts the most start-ups per 100,000 residents, with 234.7. And 57th-ranked Detroit has the lowest labor costs, with a median annual income of $27,838, compared to Fremont, California (ranked 90th overall), which has the highest labor costs at a median annual income of more than $122,000.
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