Moving

Best Cities to Start a Business in 2018

Doral, FL skyline

Who hasn't dreamed of owning a business? There's something undeniably appealing about taking a dream and turning it into a reality, building a team and a fulfilling a mission along the way. But starting a business is hard work, and different spots in the U.S. have very different resources and support systems in place. Some cities take a proactive, supportive approach—and that's the kind of place you want to start your business.

We've done some digging to unearth the best cities in the U.S. for starting a business. Since business needs vary widely, we considered all sorts of factors, including access to talent, local resources for business development, tax climate, the cost of operations, business mentorship opportunities, and more. We especially looked at the Kauffman Index of Entrepreneurship, which ranks and reports on the business climate in America's cities and states.

If you're considering taking the plunge into entrepreneurship, check out our 18 best cities to start a business in the United States, listed in no particular order.

1. Grand Rapids, MI

Grand Rapids Architecture

Grand Rapids is the second-largest city in Michigan and while this riverside gem is known as Furniture City (it's home to five of the world's top furniture companies) there's more to Grand Rapids than coffee tables and chaise lounges. The city hardly needs to chase down businesses: initiatives like Start Garden—a venture capital, incubator, and entrepreneurship fund—are putting Grand Rapids on startup founders' radars.

With at least 15 higher education institutions, Grand Rapids has access to an unbelievably diverse talent pool, and speaking of brains, the city is also home to Acton Institute Think Tank. Add in an affordable average rent for office space—just $14.07 per square foot, per LoopNet—and the state's favorable corporate tax system, and you've got a recipe for business success.

What to Start: Take advantage of the incredible talent pool and existing businesses to launch a technology solution for global manufacturing.
Local Business Highlight: Blue Medora got a boost from Start Garden in 2012 and is on its way to conquering the world.
Insider Tip: Save even more on office space by using storage units in Grand Rapids for extra equipment.

2. Decatur, GA

Revolution Donuts near Downtown Decatur

Georgia is a strong pick for starting a business. According to the Kauffman Index, Georgia ranks 2nd among the larger U.S. states for growth entrepreneurship and 8th in the nation for startup activity. And while its capital, Atlanta, tends to hog all the glory for being business-friendly, nearby neighbor Decatur makes our list for several reasons.

Decatur boasts a well-rounded, work-ready talent pool thanks to its colleges, and the DeKalb County Chamber of Commerce offers plenty of resources for newcomers, including help finding office space and obtaining permits. And if you've ever dreamed of walking to work, this is your spot. Boasting the state's best walk score for a large city (take that, Atlanta), and multiple picture-perfect commercial districts, your commute will be more about steps on your Fitbit than hours spent in traffic. Of course, you'll also find Atlanta's countless incubators, accelerators, and coworking spaces—not to mention its world-class international airport—just a quick MARTA ride away. That's a deal you just can't pass up.

What to Start: Take your pick of what to pursue in diverse Decatur—you'll do well in retail, technology, or food services.
Local Business Highlight: Revolution Doughnuts started in Decatur in 2012 and quickly expanded into Atlanta.
Insider Tip: Savvy startups can save a bundle by renting a Decatur storage unit and coworking alongside other entrepreneurs.

3. Des Moines, IA

Downtown Des Moines Skyline

Iowa's capital city is known for being home to major institutions like Wells Fargo and John Deere, but it's great for startups, too. The city has numerous resources for entrepreneurial types, like Startup Des Moines, which provides information about mentorships, networking, associations, and more. Accelerators like Ag Startup Engine and Global Insurance Accelerator provide support and funding to fledgling businesses in their respective fields. And the city has plenty of coworking space, like Area 515 and Gravitate.

Nearby Iowa State University sponsors Startup Factory, which includes programs like Startup University, a 52-week program designed to take ideas from concept to creation. When your business is ready to expand, you'll find office space is affordable in Des Moines: according to LoopNet, you'll pay an average of just $14.60 per square foot. All this has led to the city seeing many "successful exits," including Banno Software, the SmartyPig app, and Tourney Machine. If you're ready to be one of them, pack your laptop and head to Des Moines.

What to Start: Take advantage of Des Moines' best assets and build apps and software for the agriculture, insurance, or financial industries.
Local Business Highlight: AgriSync, established in 2014, is an app that helps connect partners in agriculture so they can quickly and easily track and fix issues.

4. Medford, MA

Medford, MA Businesses

Nobody will dispute that Boston comprises a powerhouse of higher education institutions (MIT, anyone?) churning out masses of educated, upwardly mobile talent. The area also boasts nearly 50 accelerators, incubators, and other startup-fostering support networks, including MassChallenge, which calls itself "the most startup-friendly accelerator on the planet." You can be successful here, too: According to the Kauffman Index, the Boston metro area has a 54% survival rate for new businesses, which ranks 2nd in the nation.

Despite these undeniable perks, Boston itself can be expensive, in terms of both cost of living and office space. Enter Medford: Located just 5 miles northwest of downtown Boston, it's an ideal pick for spreading your wings as you grow your business. With its own pool of smarties graduating from Tufts each year, Medford has no shortage of qualified employees for up-and-coming businesses. Plus, Medford's convenient subway stop—Wellington Station on the Orange Line—makes it simple to access the resources in the heart of Boston, without going broke in the process.

What to Start: Make use of the region's intelligence overload and launch an innovative biotech or pharmaceutical company.
Local Business Highlight: GreenLight Biosciences and Teleos Therapeutics are just two examples of successful smartypants in the area.
Insider Tip: Store those extra lab coats and beakers in a Medford storage unit so you can grab them when you have your next breakthrough.

5. Richmond, VA

Richmond, VA Startups

Richmond is so rich with opportunity for businesses, it's hard to know where to start. The city's Chamber of Commerce runs the Thrive Mentor Network, which offers assistance to small businesses by providing one-on-one mentorship. Richmond is also home to countless startup resources, such as Lighthouse Labs, which is both an accelerator and a mentor network, and Startup Virginia, an incubator. New Richmond Ventures provides angel investment, and there are plenty of coworking spaces to choose from.

When you do need an office of your own, space is affordable, at just $15.92 per square foot, so you can expand without drowning in overhead costs. On top of everything else, Richmond is fortunate enough to be in Virginia, which the Tax Foundation ranks as 6th in the U.S. for best corporate tax rates, and the Kauffman Index ranks Virginia number one for growth entrepreneurship (i.e., ability of startups to grow) among large U.S. states. All in all, the excellent support system for entrepreneurs and favorable financials meant Richmond had to make the list.

What to Start: In Richmond's startup-friendly environment, consider anything that can run on an idea and a dream, from mobile apps to medical solutions.
Local Business Highlight: WealthForge is an online financial broker established in 2009 by two University of Richmond students.
Insider Tip: Financially savvy new businesses will rent storage in Richmond and take advantage of its numerous coworking options.

6. Henderson, NV

Lovelady Brewing Company in Henderson, NV

Low cost of living and proximity to Las Vegas are only part of Henderson's appeal. The city is actively prioritizing economic development, offering tax breaks and deferments to eligible businesses, as well as job training and other incentives. The city is also working to revitalize Water Street, the heart of its very walkable downtown district. With such an attractive business climate and devoted city leadership, it's no surprise that the Kauffman Index ranks the Las Vegas-Henderson metro area 5th in the nation for startup activity.

If those perks weren't enough, Nevada itself offers a plethora of business incentives. For example, if you start an LLC, you'll incur no franchise taxes or personal income taxes, and business owners and shareholders aren't even required to be residents. Elon Musk, founder of Tesla, certainly sees the value in investing in Nevada—he created Las Vegas-based VTF Capital, which invests in area startup ventures, and his own Tesla Gigafactory is located just outside Reno. And as we're sure you know, Elon Musk is more than a little business savvy.

What to Start: Use Nevada's tax and startup-friendly climate to your advantage, and start a sole proprietorship, partnership, or LLC.
Local Business Highlight: Newly opened Lovelady Brewing Co. is the highlight of Henderson's downtown revival project—and a great place for happy hour after a long day.
Insider Tip: Instead of paying extra money for square footage in your office building, rent a storage unit in Henderson.

7. Providence, RI

Providence River

The name Providence means protection, and that's exactly what the city provides for businesses. The city is home to higher education institutions churning out artistic smarties—both Brown University and Rhode Island School of Design call the city home. The Providence-based Business Innovation Factory can help companies large and small create strategies and scale up, and for those who aren't quite there yet, the Founders League coworking space has you covered.

During the past two decades, Providence has also been very generous in awarding tax breaks, which experts agree has resulted in a thriving business climate—the Kauffman Index reports that the Providence metro area has the second-highest established small business rate in the nation. That means jobs, development, and tax revenue for the city. Prominent businesses like eMoney Advisor and GE Digital are opening campuses in downtown Providence, and it's worth setting up shop where the action is. So get to it!

What to Start: Ride Rhode Island's wave of enthusiasm and create an app!
Local Business Highlight: We told you it's all about the apps: Upserve, for restaurant management, and Splitwise, for budgeting, are just two that have been successful so far.
Insider Tip: Rent a nearby storage unit in Pawtucket until you're ready to expand to a larger space.

8. Cheyenne, WY

The Wrangler in Downtown Cheyenne, WY

Corporations—whether they're just starting out, or are already established—are lucky to call Cheyenne home. With office space available at the bargain price of $16.67 per square foot and an incredibly affordable cost of living, the city is attractive for growth-minded organizations looking to expand. Cheyenne, which is the most populous city in Wyoming, as well as the state capital, is also just an hour from the University of Wyoming, making it an attractive option for college grads just starting out their careers.

According to the Tax Foundation, Wyoming ranks 1st in the nation for best corporate tax rates, and the Kauffman Index has awarded Wyoming 3rd place in terms of startup activity among smaller states. The celebrated Wyoming Small Business Development Center has the resources to support local businesses. Still not convinced? Consider this: Downtown Cheyenne is just plain adorable, and its residents are super friendly. If you want a high quality of life as you achieve your business dreams—and of course you do!—put Cheyenne on your short list.

What to Start: A pet boutique, a cute café, or some other fun contribution to a small-town way of life.
Local Business Highlight: Flydragon Design Art Studio is the perfect example of just that: a locally owned gem in that adorable downtown we mentioned.

9. Franklin, TN

Historic Franklin, TN

Female entrepreneurs, rejoice! Franklin is, frankly, one of the best spots for you to do business. Located about 25 minutes from Nashville, Franklin is home to the region's chapter of the Society of Women Business Owners, and the Nashville metro area boasts the third-highest average revenue for women-owned businesses. And it's not all country music and barbecue, either. Wondering what is a good business to start? Tech and science are experiencing an unprecedented boom in Williamson County, and the Kauffman Index ranks the Nashville-Franklin metro area 4th in the entire U.S. in its growth entrepreneurship category.

The state of Tennessee is working its way up the ranks in the startup world, too. It jumped six spots in the last year (from 20th to 14th) on the Kauffman Index's list of startup activity among larger states. But what does all this mean for you? In Franklin, you'll find not only a supportive business environment with plenty of opportunity, but also an ever-growing network of startups and small business owners to lend you their expertise. And with Nashville in your backyard, you'll find plenty of recreation after-hours, too.

What to Start: Given the booming tech and startup industries in Franklin, consider launching a technology or software development firm.
Local Business Highlight: Rustici Software moved into Franklin in 2016 and is still growing.

10. West Fargo, ND

Downtown West Fargo, ND

With a low cost of living and extremely favorable corporate tax rates, North Dakota is considered one of the best states to start a business, and simply had to make our list. North Dakota also shines on the Kauffman Index: among the small U.S. states, it ranks 3rd in growth entrepreneurship, 7th in startup activity, and 4th in main street entrepreneurship. Alright, you're convinced. But where to set up shop? We'd suggest the friendly town of West Fargo, one of the state's fastest-growing cities.

The West Fargo Chamber of Commerce has a plethora of programs for business leaders. It also offers Women Connect, a program for female entrepreneurs, as well as Young Entrepreneurs Academy, which is devoted to the success of rising leaders. You'll also be close to the Small Business Development Center in nearby Fargo for even more support. If you're looking to put down roots in a family-friendly, affordable spot as you grow your business, look no further than West Fargo.

What to Start: Take advantage of the affordable cost of living and open a downtown storefront or environmental consulting company.
Local Business Highlight: Inspire Health Spa just opened in 2017, providing great massages for all the other entrepreneurs in town.

11. Doral, FL

Doral, Florida

The Miami metro area is number one in the U.S. for startup activity, and the city's ultra-cool reputation is no secret. Doral is located just 13 miles west of Miami and only a few minutes from the international airport, for all you jet-setting entrepreneurs out there. The Doral Chamber of Commerce is outstanding, offering support for everything from social media and search engine optimization to networking and strategy. The Miami-based Florida Small Business Development Center offers free consulting services to local businesses hoping to put down roots in the Miami metro area.

Florida as a whole is a powerhouse for business, especially when it comes to taxes. The Tax Foundation ranked it the 4th best corporate tax system in the U.S., thanks to its 5.5% state corporate income tax and no personal income tax. If you like to make a lot of money, and then keep most of that money instead of giving it back to the state, you've found your match in Doral.

What to Start: Leverage Doral's international location to create a global consulting or e-commerce startup.
Local Business Highlight: Cipher Business Solutions provides consulting services to the myriad trade and transportation behemoths in the area.
Insider Tip: If you got a little too ambitious buying office equipment, store it in Doral self-storage until you're ready to use it.

12. South Bend, IN

LaSalle Kitchen and Tavern in Downtown South Bend

South Bend presents a tantalizing spread of opportunities for aspiring businesses. With startlingly inexpensive office space (it's $13.86 per square foot, according to LoopNet) and an exceptional transportation and infrastructure system—including road, water, rail, and air—the city makes an exceptional pick for setting up shop. While you may think of farms and cows when you think of Indiana, the most exciting things happening in South Bend are actually downtown.

South Bend's downtown district is thriving. It boasts a welcome program for new businesses, grants galore for those hanging a shingle downtown, and bike-friendly initiatives designed to attract more visitors to the area. Add to that the liquor license incentives designed to encourage riverfront revitalization efforts, plus tax abatements and other incentives, and South Bend is an attractive pick for pretty much any type of business.

What to Start: South Bend is all about supporting its downtown scene, so open a fun boutique or gourmet riverfront grill and bar.
Local Business Highlight: Follow in the footsteps of LaSalle Kitchen and Tavern, established in 2013, and you'll thrive in no time.

13. Katy, TX

Downtown Katy, TX

Once considered a suburb of nearby Houston, Katy has emerged to become a prominent city in its own right. Katy enjoys all the perks of its famous neighbor, minus the lofty real estate prices and traffic jams. It's close enough to the Houston Energy Corridor to make it attractive for clean energy and tech entrepreneurs, and its high density of businesses—there's an estimated 46 businesses for every 100 people—creates a sense of camaraderie that's difficult to match.

The Katy Area Economic Development Council actively promotes the area's rich talent pool and ample office space, and the city's unemployment rate is an impressive 3.7%. The state of Texas overall has long been considered a top pick for businesses, and not just corporations. The Kauffman Index ranks it 2nd in startup activity among larger states, and its entrepreneurial spirit and can-do attitude are contagious, in the best way.

What to Start: Harness the region's energy expertise and start your own solar energy consulting firm.
Local Business Highlight: Take a page from the business playbook of KT Solar Systems, established in 2014.
Insider Tip: Save space and money when you keep any extra solar panels and equipment in a storage unit in Katy.

14. Lincoln, NE

Downtown Lincoln, NE

Lincoln has so many business resources available, it's hard to keep track. The Lincoln Partnership for Economic Development spends its days supporting local businesses, linking them with planning, financing, staffing, and other resources, including grants and loans for eligible businesses. All that networking, plus collaborative endeavors like Turbine Flats and FUSE Coworking, creates an awesome business environment with tons of camaraderie. Another thing contributing to all that satisfaction: Nebraska has an exceptionally high survival rate for new businesses, at 55%.

Need funding? NMotion is a Lincoln-based startup accelerator focusing on software and tech solutions for numerous industries, while Nebraska Global is a Lincoln-based venture capital fund dedicated to promoting sustainable software and tech endeavors in the state. The state's Nebraska Advantage tax package also targets companies involved in research and development (read: tech companies), and those who hire locals. In fact, Nebraska's pro-business tax climate and startup-friendly attitude has earned it the moniker "Silicon Prairie." Forget San Francisco—Lincoln is the next big thing.

What to Start: Embrace the startup mentality and launch a software startup offering unique business solutions.
Local Business Highlight: Don't Panic Labs is a software engineering company established in 2010 that's already helped corporations like HobbyTown.

15. Murray, UT

Intermountain Medical Center Murray, UT

Murray is only about a 20-minute drive from Salt Lake City, but has its own culture and infrastructure, blending the best features of a big city and a small town. Its proximity to SLC exposes it to an abundance of talent from Brigham Young University and other colleges, and the area is home to many startup-friendly initiatives, including the mentor-based BoomStartup accelerator, life-sciences-based BioInnovations Gateway incubator, and Salt Mine collaborative workspace.

Murray is also conveniently located between two small business development centers, which provide mentorship and support. Utah is a business-friendly state to begin with. It has the 4th lowest corporate taxes in the nation according to the Tax Foundation, and is 1st in growth entrepreneurship and 8th in startup activity among smaller states in the Kauffman Index. And did we mention it's a totally gorgeous and super-active place to live? "Work hard, play hard" might as well be Utah's state motto, so those who live by those words will fit right in.

What to Start: Murray is totally eclectic—launch anything from a life-sciences startup to an e-commerce company.
Local Business Highlights: The city is home to loads of quirky, offbeat e-commerce and retail startups, like Manhood Beard Co., Maven Botanics, Remedy Tattoo, and Float Within spa.
Insider Tip: Retail and e-commerce businesses can take advantage of Murray storage units to keep extra inventory handy.

16. Riverside, CA

Downtown Riverside, CA

That California sunshine means the clean energy industry is thriving here, and Riverside is a top pick for those looking to get in on the action. The town offers countless business incentives, especially for green and energy-based initiatives, making it appealing for entrepreneurs in sustainable industries. The city also boasts four incubators, an accelerator, multiple co-working spaces, and two makerspaces—shared spaces with equipment for rent, enabling users to prototype and manufacture design ideas.

With so much to offer fledgling enterprises, it's no surprise that the Riverside metro area comes in tops for many Kauffman Index categories, including rate of startup growth and business survival rate. UC Riverside's enormous undergraduate business program (it's the largest in the state) and stellar MBA program provide plenty of capable talent. Plus, the robust Inland Empire Small Business Development Center has a location right in Riverside, offering workshops and training. Talent, tax breaks, and tons of support? Riverside is the whole package.

What to Start: Take advantage of those incentives and start a clean energy firm.
Local Business Highlight: New Power solar was established in Riverside in 2009 and quickly grew to multiple locations around the state.
Insider Tip: You're gonna need some room for all those prototypes—rent storage space in Riverside so you never have to get rid of anything.

17. Raleigh, NC

Raleigh, NC Architecture

Rally the troops—it's time to start a business in Raleigh! Raleigh is known for its "Research Triangle," home to tons of high-tech companies. There's plenty of room for more, though: the city is widely recognized as one of the best places to start a business and has multiple incubators, including American Underground. It calls itself "The Startup Hub of the South" and is an official Google for Entrepreneurs startup community. There's even a Raleigh incubator just for women, The Pinkubator!

Raleigh also has about 15 coworking spaces, adding up to over 117,000 square feet. We're not saying you definitely won't need office space, but it's possible. If you land some of the many funding options available here, though, office space costs won't even be an issue. Enter the Cherokee-McDonough Startup Challenge, apply for The Startup Factory's intensive accelerator program, or get your hands on the venture capital and angel investor funds that seem to be just about everywhere in this city. You'll need a competitive spirit and lots of drive to succeed in Raleigh—but if you can make it here, you can make it anywhere.

What to Start: You're right in the Research Triangle—why not start the next big life sciences company?
Local Business Highlight: ImmunoReagents Inc. was founded in the Technology Incubator at NC State University in Raleigh, and it's a certified woman-owned small business.
Insider Tip: Office space here isn't the cheapest on our list, so consider renting a storage unit in Raleigh and working out of one of the many coworking spaces.

18. Lafayette, LA

Downtown Lafayette, LA Sign

Lafayette's climate is hot—especially in terms of business! For a city its size, it's teeming with resources designed to foster economic growth. It's got a Small Business Development Center, and the area initiative One Acadiana is taking a bold stance to make the region a sought-after spot in the South for businesses and talent. Louisiana offers tax incentives and credits to all sorts of industries in the startup sector, including those in entertainment, digital media, and research and development.

For a taste of the startup life, the nearby Acadiana Incubator Kitchen offers everything from testing space for recipe development to support with marketing, accounting, and branding. The city is also home to Opportunity Machine, an accelerator with training and networking resources, as well as scholarships for standout startups. Louisiana might not be the first state that comes to mind when you think "startup," but it should be—and Lafayette should be your destination.

What to Start: A digital and interactive media agency, or a hot restaurant.
Local Business Highlight: Alpha Dog Digital was established in 2010 and quickly stood out among the many digital agencies in town.
Insider Tip: Whether you've got extra uniforms for your restaurant or company swag for your digital media agency, keep extra inventory in a Lafayette storage unit.

It's a great time to be an entrepreneur—the proliferation of incubators, funding, and coworking spaces means the best cities for business exist in all parts of the country. Whether you're more interested in biotech or opening a bar, there's a city that's perfect for you. We hope we've helped you narrow it down a bit. The rest is up to you!

Meredith Castin

Meredith Castin

Meredith is a physical therapist turned writer who enjoys traveling to as many new cities as possible, primarily so she can discover new food to write about. When she isn't eating, you'll find her rock climbing, snowboarding, recording music, and spending time with her husband and three cats.
Meredith Castin

Latest posts by Meredith Castin (see all)

About the author

Meredith Castin

Meredith is a physical therapist turned writer who enjoys traveling to as many new cities as possible, primarily so she can discover new food to write about. When she isn't eating, you'll find her rock climbing, snowboarding, recording music, and spending time with her husband and three cats.

Leave a Comment