Best Large Cities to Start a Business

Americans have long had a strong entrepreneurial spirit. From the Gold Rush and the Industrial Revolution to the Internet Age, periods of innovation have shaped our economy and driven major societal progress. However, the past few years have been particularly challenging for business owners in the U.S., due to factors such as the COVID-19 pandemic, the Great Resignation and high inflation.

To help aspiring entrepreneurs — from restaurant owners to tech innovators — improve their chances of long-term success in today’s difficult economic environment, WalletHub compared startup opportunities across 100 U.S. cities. The analysis is based on 19 key metrics, including the five-year business survival rate, labor costs and office-space affordability. 

For a breakdown of smaller markets, check out WalletHub’s Best Small Cities to Start a Business ranking.

“Starting a business can be very scary, considering one in every five startups doesn’t make it past the first year. That’s why it’s especially important to live in a city that provides an environment where new businesses can thrive, with enough capital, workers and customers to keep it going long-term.”

Chip Lupo, WalletHub Analyst

In-Depth Look at the Best Large Cities to Start a Business

Tampa, FL

Tampa, FL, is the best large city for starting a small business, in part because it has a low corporate tax rate, allowing businesses to keep more of their revenue. It also has a high number of investors per capita, and the combination of low taxes and high capital gives businesses more resources to survive the difficult initial years.

The monetary benefits of Tampa are evident in the fact that the city scores very high on the Entrepreneurial Activity Index, which indicates that there is a large number of startups in the city and those startups have a high survival rate. 

Orlando, FL

Orlando, FL, is the second-best large city to start a business in, due in part to the fact that the number of small businesses has grown faster than in most other cities. It’s also one of the top cities on the Kauffman Early-Stage Entrepreneurship Index, which means that in addition to Orlando having a lot of startups, those startups also have a high survival rate.

One of the reasons why startups are so prevalent and successful in Orlando is that the city has a very high number of investors per capita, so new businesses are able to get the funding that they need to survive and thrive.

Furthermore, although Orlando is known as a retirement haven, it has one of the highest growth rates for the working-age population, so businesses have plenty of potential new employees.

Jacksonville, FL

Jacksonville, FL, is the third-best large city to start a small business in, and it has the highest Entrepreneurial Activity Index score in the country, indicating a very active start-up environment that helps many different types of new businesses launch and grow successfully. In addition, the city has some of the lowest corporate taxes in the country, which can provide a boost to new businesses by allowing them to reinvest more of their capital.

Businesses that are currently in Jacksonville are thriving, as the city has a very high number of startup firms per capita, indicating a strong environment for launching new businesses. It also has some of the highest rates of growth in business revenues in the country, which suggests that companies in the city have strong potential to expand and succeed. 

Methodology

In order to determine the best cities for launching a business, WalletHub compared 100 cities, across three key dimensions: 1) Business Environment, 2) Access to Resources and 3) Business Costs. The sample considers only the city proper in each case, excluding cities in the surrounding metro area. They evaluated the three dimensions using 19 relevant metrics. Each metric was graded on a 100-point scale, with a score of 100 representing the most favorable conditions for startups. Data for metrics marked with an asterisk (*) were available at only the state level.They then determined each city’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank-order our sample.