You already know your business ideas have to be on point to start a successful small business, but what you might not realize is how much location really matters. In fact, the city where you choose to start your business can play a huge hand in its fate, regardless of the industry you work in.
A recent GOBankingRates study analyzed eight factors affecting startups in major metropolitan areas of the United States to find the best and worst cities for a new small business. Take a look at some of the top findings.
Click here to learn about the best and worst states for starting a business.
Small Business Is Booming in Texas
Everything is bigger in Texas, including small-business success. Four of the top 10 cities for starting a business — Austin, Dallas, San Antonio and Houston — are in the Lone Star State.
These four cities offer a winning combination of fantastic entrepreneurial conditions, a cost of living that’s less than or only slightly higher than the U.S. average and solid job-growth projections. If you’re planning to start a new small business, it might be a good idea to move your headquarters to Texas.
Think You’re Ready? Take This Quiz to See If You Have What It Takes to Start a Small Business
Low Cost of Living Doesn’t Equal Small-Business Success
You can have the best small-business ideas in the world, but if you’re not based in a city that supports entrepreneurial efforts, your company might not ever get off the ground. In theory, starting a business in a city with a low cost of living seems like a smart way to reduce your overhead expenses — but it’s not that simple.
Of the 10 worst cities to start a small business, the majority have a cost of living that falls below the national average: Philadelphia; Orlando, Fla.; Jacksonville, Fla.; Pittsburgh; Detroit; and Milwaukee. These cities scored poorly in entrepreneurial-specific categories, meaning the affordable cost of living is offset by poor startup conditions.
It wasn’t always the case, but several of these cities — Philadelphia, Pittsburgh, Milwaukee and Detroit — also had poor job-growth projections. It’s hard for a small business to thrive if the local economy is on the decline, so this is a factor that prospective entrepreneurs should take seriously.
Must-Read: 5 Banks That Make Starting a Small Business Easier
Final Ranking: Best and Worst Cities for Starting a Small Business
If you’re thinking about starting your own business, the city you choose as your launching pad can make all the difference. Here’s a list of 40 cities with the most and least potential for an entrepreneur to have success, ordered from best to worst: