For many aspiring entrepreneurs, launching a small business represents the ultimate dream – the chance to turn an idea into reality and shape their own futures. A record 5.5 million new business applications were filed in the U.S. in 2023 alone. Yet, as any seasoned entrepreneur will tell you, starting a business involves much more than just ambition; location plays a pivotal role in determining success.
CoworkingCafe analyzed 136 cities across various metrics such as gross domestic product (GDP), number of business applications, labor costs and more to find out which cities are the best for small businesses in 2024. Spoiler alert: Southern cities are thriving, with 14 of the top 20 located below the Mason-Dixon line. From Miami to Austin, here’s where aspiring entrepreneurs should look when choosing a base for their business ventures.
1. Scottsdale, Arizona: 73.75 points
Scottsdale tops the list with its booming economy, which saw a 38% GDP growth between 2018 and 2022. Known for being a startup hub, Scottsdale’s proximity to Phoenix, low disaster risk and excellent infrastructure make it a prime location for both new and established businesses. Around 16% of the city’s business owners are self-employed, the second-highest rate in the country. Entrepreneurs here benefit from a supportive environment that helps them grow and succeed.
2. Miami, Florida: 73.37 points
Business is thriving in Miami, with a staggering 5,320 business applications per 100,000 residents – the highest in the nation. Nearly 18% of the workforce is self-employed, a testament to the entrepreneurial spirit in the city. Despite a cost of living that is 18% higher than the national average, Miami’s lower-than-average labor costs make it a favorable environment for business owners. The city’s low corporate tax rate and 32% GDP growth also position it as an attractive spot for startups in finance, tech and logistics.
3. Atlanta, Georgia: 70.89 points
Atlanta combines Southern charm with a dynamic business environment. It boasts the highest density of coworking spaces in the U.S., providing small businesses with flexible, cost-effective workspaces. Nearly 40% of the city’s workforce holds a bachelor’s degree, which supports a growing tech, media and logistics sector. With a 25% GDP growth and a low unemployment rate of 5.8%, Atlanta is a hotspot for entrepreneurs looking to scale their businesses.
4. Orlando, Florida: 70.39 points
Orlando’s diverse economy is about more than just theme parks. It boasts the fourth-highest rate of business applications per 100,000 residents (3,689), making it a bustling environment for startups. Labor costs are moderate, and its 35% GDP growth reflects its rise as a hub for tech and creative industries. This combination of affordable living and growth potential makes Orlando a solid choice for new businesses.
5. Austin, Texas: 70.12 points
Known as “Silicon Hills,” Austin is a magnet for tech startups and entrepreneurs. The city ranks high with a business application rate of 2,772 per 100,000 residents and nearly 40% of its population holding a bachelor’s degree. Austin also has the highest GDP growth rate in the country at 46%. While labor costs are higher, the low unemployment rate and business-friendly environment make Austin a thriving city for small businesses.
6. Tampa, Florida: 70.11 points
Tampa offers a perfect balance of lifestyle and business opportunities. With a cost-of-living index sitting at 96.9, below the national average, entrepreneurs can enjoy coastal living without breaking the bank. Tampa ranks high in business applications and coworking spaces, and its 36% GDP growth signals a strong economy. Its dynamic business environment and affordable costs make Tampa an appealing spot for small businesses.
7. Fort Lauderdale, Florida: 70.06 points
Fort Lauderdale blends sunshine with opportunity, ranking fourth in self-employment rates nationwide. The city’s business environment is supported by 25 coworking spaces, while reasonable labor costs and a 32% GDP growth make it a hotspot for startups in tourism, tech, and marine industries. Although the cost of living is higher than average, Fort Lauderdale’s business climate remains strong and diverse.
8. Boise, Idaho: 69.79 points
Boise’s small-town charm is paired with big opportunities. With a 41% GDP growth rate and a low unemployment rate of 3.8%, Boise is gaining attention as a small business-friendly city. The city’s tech sector is growing rapidly, and low coworking costs – with an average of $255 per month – create an inviting atmosphere for entrepreneurs seeking affordability and community support. Boise is an ideal destination for startups looking to thrive in a burgeoning economy.
9. McAllen, Texas: 68.84 points
McAllen shines for its affordability, boasting the lowest cost of living among the top cities at 82.0. Its strategic location near the U.S.-Mexico border drives growth in sectors like logistics and retail, and with a 28% GDP growth, McAllen is an emerging city for entrepreneurs looking for low startup costs and unique business opportunities. The city’s high self-employment rate (14.7%) further underscores its entrepreneurial spirit.
10. Huntsville, Alabama: 68.51 points
Known for its aerospace industry, Huntsville also provides fertile ground for small businesses. The city boasts a low unemployment rate of 4.6% and labor costs under $40,000, creating an affordable environment for startups. With a 31% GDP growth rate and a focus on tech and research industries, Huntsville is drawing entrepreneurs looking for stability and long-term growth potential.
Honorable Mentions
While these top 10 cities lead the pack, there are several other cities worth mentioning for their strong small business environments:
- Provo, Utah: Affordable coworking spaces, low labor costs, and a nearly 46% GDP growth make Provo a rising star for entrepreneurs.
- Denver, Colorado: A diverse economy, high coworking space density and strong GDP growth offer plenty of opportunities for small businesses to flourish in the Rockies.
- Wilmington, North Carolina: Wilmington combines lower labor costs with strong GDP growth, making it a vibrant city for creative and tech industries.
