Launching a small business is a challenge, especially these days. With that in mind, it makes sense to think long and hard about where to set up shop, weighing the various factors that could give you any much-needed advantage.
That's the idea behind the latest ranking of the best large U.S. cities for starting a business from financial website WalletHub, which compared data for 100 of the largest U.S. cities and ranked them based on metrics like average business costs and availability of startup resources.
Here are the seven best large U.S. cities for starting a small business in 2023, according to WalletHub's rankings:
- Orlando, Florida
- Jacksonville, Florida
- Miami, Florida
- Tampa, Florida
- Durham, North Carolina
- Boise, Idaho
- Atlanta, Georgia
Topping this year's list is Orlando, a city closely associated with one of the largest companies in the world, The Walt Disney Company — which also happens to be engaged in a high-profile legal battle with the state's governor, Ron DeSantis.
The top four cities on the ranking are all Floridian, largely due to criteria like low unemployment and relatively low corporate tax rates. Florida ranked 11th on CNBC's own list of the top U.S. states for businesses in 2022, for similar reasons.
However, over the past year, Florida has also seen backlash from numerous corporations, including Disney, pushing back against the state's controversial legislation banning the discussion of sexual orientation or gender identity in public schools, dubbed the "Don't Say Gay" bill by opponents.
Most Florida companies don't seem to be fleeing the state. Florida's commercial real estate market heated up in 2022, suggesting businesses were leasing more space. Businesses like tech startup LeverX and billionaire Ken Griffin's hedge fund Citadel moved their headquarters to Florida from California and Illinois, respectively, over the past year.
Some home insurance companies are leaving Florida over fears of increasing severe weather, financial services company Bankrate reported on Monday.
For those who don't want to move to Florida, cities like Durham and Boise offer bona fide alternatives. North Carolina, for example, ranked as CNBC's top state for businesses in 2022, due to a strong economy and the wealth of highly-educated workers in the vaunted "research triangle" area.
On the bottom end of WalletHub's ranking, Washington, D.C. finished dead last — despite boasting a population with the third-highest share of working-age people holding a college degree. The nation's capital also suffered due to some of the longest average work weeks and highest office space costs.
New York City didn't rank much higher, finishing 97th. Its large population and reputation as the world's financial capital do make it attractive to entrepreneurs. But New York is a costly place to do business, with relatively high corporate tax rates and some of the highest office space costs in the country, WalletHub noted.
To determine its rankings, WalletHub graded cities across 19 weighted metrics including cost of labor, office space affordability, corporate tax rates, loans and venture investments per capita, and availability of educated workers.
Much of that data came from the U.S. Census Bureau, the Bureau of Labor Statistics, the Ewing Marion Kauffman Foundation, the National Venture Capital Association, and other sources including WalletHub's own research.
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