Where are the best places to start a business in the U.S.? We took a closer look at the top 100 most populous metro areas in the United States to find the cities with the most business-friendly statistics: cities where businesses have a high likelihood of success, low costs to deal with, an available workforce, and lenient taxes. With 10 different data factors, our small-business index highlights the best cities for business for 2020.



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Results: Best Cities to Start a Business

Results: Worst Cities to Start a Business

The Top 10 Best Cities to Start a Business Greensboro-High Point, North Carolina — INDEX: 287.23

Durham-Chapel Hill, North Carolina — INDEX: 277.36

Charlotte-Gastonia-Concord, North Carolina — INDEX: 276.17

Winston-Salem, North Carolina — INDEX: 265.28

Greenville-Anderson-Mauldin, South Carolina — INDEX: 255.34

Columbia, South Carolina — INDEX: 255.34

Charleston-North Charleston, South Carolina — INDEX: 253.27

Boise City, Idaho — INDEX: 247.23

Raleigh, North Carolina — INDEX: 243.47

McAllen-Edinburg-Mission, Texas — INDEX: 236.70

Overall: Many of the best cities to start a business are in low-tax states like North Carolina, which has a state corporate tax of only 2.5% and an unemployment tax rate of only 1%. Add in a low minimum wage and Greensboro’s relatively high unemployment rate of 4.8% and one can see how it would be a perfect place to open a mom-and-pop shop. Best Likelihood for Business Survival: Greensboro doesn’t have the best business survival grades. If you don’t mind taxes or costs but are risk-averse, you might consider Madison, Wisconsin, the best location for business. Madison has only experienced 1,096 establishment deaths between 1989 and 2015, which is especially excellent when compared to the local population. Missouri, Minnesota, and Massachusetts all have great short-term business survival rates over a one-year span, and Pennsylvania and Wisconsin have excellent long-term business survival rates over a 20-year span. Cheapest Startup Locations: If you’re looking for the best places to start over with no money, perhaps Augusta, Georgia, would be the best place to start. The state minimum wage there is $5.15/hour, and studio rentals are at about $742 per month.

The Top 10 Worst Cities to Start a Business Washington-Arlington-Alexandria, DC-Virginia — INDEX: 31.22

San Jose-Sunnyvale-Santa Clara, California — INDEX: 33.72

San Francisco-Oakland-Fremont, California — INDEX: 35.22

San Diego-Carlsbad-San Marcos, California — INDEX: 57.12

Springfield, Massachusetts — INDEX: 59.71

Stockton-Lodi, California — INDEX: 75.36

Sacramento-Roseville-Arden-Arcade, California — INDEX: 81.57

Riverside-San Bernardino-Ontario, California — INDEX: 87.28

Oxnard-Thousand Oaks-Ventura, California — INDEX: 88.51

Bridgeport-Stamford-Norwalk, Connecticut — INDEX: 90.38

Overall: With extremely high rent, high taxes, and a poor 20-year survival rate, Washington, DC, is the worst city for small businesses on our list. It has a high 8.25% corporate tax and a high minimum wage of $14/hour. There’s also low employment, so it’s a worker-favoring city at the moment. Worst Likelihood for Business Survival: Washington, DC, is also the worst-scoring for business survival, with low scores for both one-year survival and 20-year survival as well as a high rate of business deaths per capita. Shortly behind Washington are San Jose and San Francisco. The places with the worst long-term survival rates are Washington state, California, and the District of Columbia. Georgia, Kansas, and Ohio, however, have the worst rates for small businesses in their first year. Most Expensive Places to Get Your Start: San Francisco, San Jose, Washington, DC, Boston, and New York City all have some of the most expensive rents and minimum wages, and hence, they’re some of the costliest places for a startup. However, despite it being financially one of the worst cities for business, San Francisco is considered to be one of the best cities for entrepreneurs because of its potential for networking in specific industries. Just know that its costs, risks, and overall investment required mean that most business owners will lose a great deal of money on their first project.