Survey Reveals Top Cities For Small Businesses

For the fifth year in a row, Austin, TX, has been named the best city to start and grow a small business, outranking 100 other U.S. metro areas with populations of at least half a million, according to a study released by The American Cities Business Journals.

The booming metro boasts a growing population, adding more than 106,000 at the start of this decade; strong private-sector job growth, its employment base nearly 14% larger in 2013 than it was in 2008; and a 1.73% increase in the number of small businesses between 2010 and 2011, based on the most recent data available.

This data is in line with Advantages’ recent “Regional Sales Report” issue, which ranks Texas as a whole at number-one for ad specialty sales, with sales of $2.3 billion. DeAnn Wells, co-owner of Exclusively Yours, a Texas-based distributorship, notes the increase in small businesses in the area as well. “Everything from dog-sitters to landscaping to boutique clothing stores. I think the biggest increase is the small-business startups,” she told Advantages. “College kids are graduating and realizing they don’t necessarily want the corporate rat race, so they are starting their own businesses, too.”

The Business Journals has been analyzing federal statistics to analyze small-business vitality in 101 metropolitan areas since 2005. The highest scores go to regions with prosperous economies, rapid population expansion and a density of businesses with 99 or fewer employees. Overall, the South is the most promising region for entrepreneurs with 10 of the 20 best metros for small businesses. The West had seven, the East two and the Midwest one in the top 20.

Miami-Fort Lauderdale ranked second in The Business Journals’ list this year, with a strong concentration of 30 small businesses for every 1,000 residents. Typical markets had just 22 per 1,000. Number 3 is Provo, UT, with private-sector jobs spiking 5.5% between December 2012 and 2013. The other top markets for small businesses this year? San Jose, CA; Houston; Bradenton-Sarasota, FL; Oklahoma City; Orlando, FL; Denver; and Raleigh, NC.

Down at 101, in last place, is Memphis, TN, which continues to lose jobs and businesses. Private-sector employment in the Memphis area declined by 11,800 jobs, or 2.2%, over the past five years. The number of small businesses there dropped by 2.4%, from 2010 to 2011. Rounding out the bottom five, in descending order, are Lakeland, FL; Wichita, KS; Stockton, CA; and Youngstown, OH.