Special Report

The Best Small City to Start a Business in Every State

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Starting a successful business is one of the most coveted ways to earn a living. It can provide a steady income and a chance to save for major expenditures, like buying a home, saving for the children’s college education, and building a retirement nest egg — all without having to answer to a boss.

The successfully self-employed tend to be wealthier than the employed, and according to 2019 Federal Reserve data, business ownership makes up 34% of non-financial assets — meaning that business owners (especially non-Hispanic whites) tend to have significant intergenerational wealth.

There are risks involved, however. According to the U.S. Small Business Administration (SBA), there are about 32 million small businesses in the country. But on average, about one in five startups closes within 12 months of opening, while more whither soon after. (What is considered a “small” business depends on the industry. The SBA maintains a table of industry-specific standards for defining the size of a business based on maximum number of employees or average annual revenue.)

The average cost of starting a business depends on so many factors that it’s impossible to come up with a reliable estimate. Some enterprises require office and/or warehouse space and employees to staff them, while others require only (for instance) a CPA certification, a home-office, and a computer. 

For any kind of business, though, expenses like insurance, taxes, legal fees, etc. can add up quickly. That’s why location is an important factor to consider when starting out. Launching a small business from scratch in New York City, for instance, will cost much more than doing the same upstate in Ithaca. (There are, however, large cities where starting a business is worth the risk.) 

To identify the best small cities to start a business in every state, 24/7 Wall St. reviewed data from WalletHub which ranked 1,337 U.S. cities across three key dimensions: business environment, access to resources, and business costs. The site evaluated these dimensions using 21 relevant metrics, such as startups per capita (for business environment), working-age population growth (for access to resources), and cost of living (for business costs). A weighted average of the 21 metrics was calculated to determine an overall score. 

Though there’s at least one small city that’s good for starting a business in every state, WalletHub’s data revealed that the state overall for small-business startup is Utah, which claims almost half the top 50 entries on the site’s list. (Here’s a list, not arranged by state, of the country’s best small cities to start a business.)

Click here to see the best small city to start a business in every state

“Small city” was defined as one with a population of between 25,000 and 100,000 people, and only cities themselves were considered, not the surrounding metropolitan areas. (Population estimates and median household income were obtained from the U.S. Census Bureau’s American Community Survey for 2019. Unemployment rates came from the Bureau of Labor Statistics and are not seasonally adjusted estimates for July 2021.)

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Alabama: Auburn
> Overall score: 57.37
> Best ranking business aspect: Access to Resources
> Median household income: $47,318 — #13 out of 19 small cities in Alabama
> Unemployment rate in July 2021: 2.7% — #10 out of 19 small cities in Alabama
> Population:64,054 — #4 out of 19 small cities in Alabama

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Alaska: Fairbanks
> Overall score: 48.33
> Best ranking business aspect: Business Environment
> Median household income: $62,602
> Unemployment rate in July 2021: 6.0%
> Population:31,551

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Arizona: Prescott Valley
> Overall score: 57.95
> Best ranking business aspect: Business Environment
> Median household income: $51,909 — #16 out of 23 small cities in Arizona
> Unemployment rate in July 2021: 5.2% — #18 out of 23 small cities in Arizona
> Population:44,311 — #11 out of 23 small cities in Arizona

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Arkansas: Bentonville
> Overall score: 58.14
> Best ranking business aspect: Business Environment
> Median household income: $80,392 — #1 out of 19 small cities in Arkansas
> Unemployment rate in July 2021: 2.9% — #17 out of 19 small cities in Arkansas
> Population:49,467 — #8 out of 19 small cities in Arkansas

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California: Chico
> Overall score: 55.35
> Best ranking business aspect: Access to Resources
> Median household income: $53,324 — #185 out of 215 small cities in California
> Unemployment rate in July 2021: 5.9% — #130 out of 215 small cities in California
> Population:94,529 — #6 out of 215 small cities in California

Adventure_Photo / Getty Images

Colorado: Grand Junction
> Overall score: 58.92
> Best ranking business aspect: Business Environment
> Median household income: $52,504 — #17 out of 17 small cities in Colorado
> Unemployment rate in July 2021: 6.6% — #5 out of 17 small cities in Colorado
> Population:62,062 — #5 out of 17 small cities in Colorado

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Connecticut: East Hartford
> Overall score: 49.69
> Best ranking business aspect: Business Costs
> Median household income: $55,967 — #12 out of 22 small cities in Connecticut
> Unemployment rate in July 2021: 9.6% — #3 out of 22 small cities in Connecticut
> Population:50,272 — #7 out of 22 small cities in Connecticut

Ataraxy22 / Wikimedia Commons

Delaware: Dover
> Overall score: 52.81
> Best ranking business aspect: Business Environment
> Median household income: $47,669 — #2 out of 3 small cities in Delaware
> Unemployment rate in July 2021: 9.2% — #1 out of 3 small cities in Delaware
> Population:37,523 — #2 out of 3 small cities in Delaware

LUNAMARINA / Getty Images

Florida: Fort Myers
> Overall score: 62.75
> Best ranking business aspect: Access to Resources
> Median household income: $46,409 — #75 out of 93 small cities in Florida
> Unemployment rate in July 2021: 5.3% — #25 out of 93 small cities in Florida
> Population:79,927 — #11 out of 93 small cities in Florida

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Georgia: Carrollton
> Overall score: 61.14
> Best ranking business aspect: Business Costs
> Median household income: $42,942 — #29 out of 34 small cities in Georgia
> Unemployment rate in July 2021: 3.2% — #11 out of 34 small cities in Georgia
> Population:26,570 — #34 out of 34 small cities in Georgia

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Hawaii: Hilo
> Overall score: 53.78
> Best ranking business aspect: Business Environment
> Median household income: $63,283 — #6 out of 6 small cities in Hawaii
> Unemployment rate in July 2021: 6.9% — #1 out of 6 small cities in Hawaii
> Population:45,056 — #2 out of 6 small cities in Hawaii

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Idaho: Moscow
> Overall score: 59.39
> Best ranking business aspect: Access to Resources
> Median household income: $41,896 — #11 out of 12 small cities in Idaho
> Unemployment rate in July 2021: 3.1% — #4 out of 12 small cities in Idaho
> Population:25,319 — #12 out of 12 small cities in Idaho

Illinois: Carbondale
> Overall score: 55.46
> Best ranking business aspect: Access to Resources
> Median household income: $22,152 — #84 out of 84 small cities in Illinois
> Unemployment rate in July 2021: 6.4% — #32 out of 84 small cities in Illinois
> Population:25,597 — #80 out of 84 small cities in Illinois

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Indiana: Terre Haute
> Overall score: 59.10
> Best ranking business aspect: Business Costs
> Median household income: $36,406 — #29 out of 34 small cities in Indiana
> Unemployment rate in July 2021: 5.9% — #10 out of 34 small cities in Indiana
> Population:60,673 — #9 out of 34 small cities in Indiana

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Iowa: Iowa City
> Overall score: 56.00
> Best ranking business aspect: Access to Resources
> Median household income: $49,075 — #12 out of 16 small cities in Iowa
> Unemployment rate in July 2021: 3.8% — #11 out of 16 small cities in Iowa
> Population:74,950 — #2 out of 16 small cities in Iowa

DenisTangneyJr / Getty Images

Kansas: Manhattan
> Overall score: 57.39
> Best ranking business aspect: Access to Resources
> Median household income: $50,537 — #7 out of 10 small cities in Kansas
> Unemployment rate in July 2021: 4.1% — #6 out of 10 small cities in Kansas
> Population:55,290 — #3 out of 10 small cities in Kansas

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Kentucky: Georgetown
> Overall score: 57.82
> Best ranking business aspect: Access to Resources
> Median household income: $65,812 — #3 out of 13 small cities in Kentucky
> Unemployment rate in July 2021: 3.8% — #11 out of 13 small cities in Kentucky
> Population:33,605 — #5 out of 13 small cities in Kentucky

wellesenterprises / Getty Images

Louisiana: Monroe
> Overall score: 53.02
> Best ranking business aspect: Business Costs
> Median household income: $30,438 — #10 out of 10 small cities in Louisiana
> Unemployment rate in July 2021: 7.6% — #3 out of 10 small cities in Louisiana
> Population:48,241 — #4 out of 10 small cities in Louisiana

DenisTangneyJr / Getty Images

Maine: Bangor
> Overall score: 57.45
> Best ranking business aspect: Access to Resources
> Median household income: $46,625 — #3 out of 4 small cities in Maine
> Unemployment rate in July 2021: 5.4% — #2 out of 4 small cities in Maine
> Population:32,095 — #3 out of 4 small cities in Maine

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Eric Fischer / Wikimedia Commons

Maryland: Salisbury
> Overall score: 51.15
> Best ranking business aspect: Business Costs
> Median household income: $41,905 — #37 out of 38 small cities in Maryland
> Unemployment rate in July 2021: 6.3% — #5 out of 38 small cities in Maryland
> Population:32,693 — #27 out of 38 small cities in Maryland

Massachusetts: Lawrence
> Overall score: 46.73
> Best ranking business aspect: Access to Resources
> Median household income: $44,613 — #30 out of 48 small cities in Massachusetts
> Unemployment rate in July 2021: 11.6% — #1 out of 48 small cities in Massachusetts
> Population:79,942 — #8 out of 48 small cities in Massachusetts

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Michigan: Holland
> Overall score: 57.70
> Best ranking business aspect: Access to Resources
> Median household income: $57,002 — #13 out of 39 small cities in Michigan
> Unemployment rate in July 2021: 4.7% — #18 out of 39 small cities in Michigan
> Population:33,402 — #26 out of 39 small cities in Michigan

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Minnesota: Moorhead
> Overall score: 55.54
> Best ranking business aspect: Access to Resources
> Median household income: $60,315 — #33 out of 39 small cities in Minnesota
> Unemployment rate in July 2021: 2.7% — #33 out of 39 small cities in Minnesota
> Population:42,939 — #18 out of 39 small cities in Minnesota

DenisTangneyJr / Getty Images

Mississippi: Hattiesburg
> Overall score: 57.18
> Best ranking business aspect: Business Costs
> Median household income: $34,735 — #11 out of 13 small cities in Mississippi
> Unemployment rate in July 2021: 6.5% — #4 out of 13 small cities in Mississippi
> Population:46,098 — #3 out of 13 small cities in Mississippi

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Missouri: Jefferson City
> Overall score: 59.91
> Best ranking business aspect: Business Costs
> Median household income: $52,253 — #18 out of 22 small cities in Missouri
> Unemployment rate in July 2021: 2.7% — #17 out of 22 small cities in Missouri
> Population:42,919 — #10 out of 22 small cities in Missouri

DianeBentleyRaymond / Getty Images

Montana: Bozeman
> Overall score: 62.29
> Best ranking business aspect: Business Environment
> Median household income: $55,569 — #2 out of 4 small cities in Montana
> Unemployment rate in July 2021: 2.4% — #4 out of 4 small cities in Montana
> Population:46,746 — #3 out of 4 small cities in Montana

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Nebraska: Grand Island
> Overall score: 58.36
> Best ranking business aspect: Access to Resources
> Median household income: $54,965 — #3 out of 4 small cities in Nebraska
> Unemployment rate in July 2021: 2.8% — #1 out of 4 small cities in Nebraska
> Population:51,147 — #2 out of 4 small cities in Nebraska

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Nevada: Carson City
> Overall score: 54.89
> Best ranking business aspect: Business Environment
> Median household income: $55,718 — #2 out of 3 small cities in Nevada
> Unemployment rate in July 2021: 5.3% — #1 out of 3 small cities in Nevada
> Population:54,773 — #2 out of 3 small cities in Nevada

New Hampshire: Concord
> Overall score: 48.82
> Best ranking business aspect: Access to Resources
> Median household income: $66,719 — #3 out of 4 small cities in New Hampshire
> Unemployment rate in July 2021: 3.0% — #4 out of 4 small cities in New Hampshire
> Population:43,244 — #2 out of 4 small cities in New Hampshire

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New Jersey: Princeton
> Overall score: 47.35
> Best ranking business aspect: Access to Resources
> Median household income: $137,672 — #4 out of 32 small cities in New Jersey
> Unemployment rate in July 2021: 3.9% — #30 out of 32 small cities in New Jersey
> Population:31,000 — #23 out of 32 small cities in New Jersey

New Mexico: Carlsbad
> Overall score: 59.75
> Best ranking business aspect: Business Environment
> Median household income: $69,193 — #1 out of 8 small cities in New Mexico
> Unemployment rate in July 2021: 7.4% — #5 out of 8 small cities in New Mexico
> Population:29,158 — #8 out of 8 small cities in New Mexico

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New York: Ithaca
> Overall score: 57.66
> Best ranking business aspect: Access to Resources
> Median household income: $34,424 — #54 out of 57 small cities in New York
> Unemployment rate in July 2021: 5.2% — #23 out of 57 small cities in New York
> Population:30,569 — #32 out of 57 small cities in New York

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North Carolina: Morrisville
> Overall score: 60.14
> Best ranking business aspect: Business Environment
> Median household income: $101,738 — #4 out of 31 small cities in North Carolina
> Unemployment rate in July 2021: 2.9% — #28 out of 31 small cities in North Carolina
> Population:26,280 — #30 out of 31 small cities in North Carolina

Andrew Filer from Seattle (ex-Minneapolis) / Wikimedia Commons

North Dakota: Williston
> Overall score: 66.39
> Best ranking business aspect: Business Environment
> Median household income: $84,710 — #2 out of 5 small cities in North Dakota
> Unemployment rate in July 2021: 6.4% — #1 out of 5 small cities in North Dakota
> Population:27,250 — #5 out of 5 small cities in North Dakota

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Ohio: Sandusky
> Overall score: 54.17
> Best ranking business aspect: Access to Resources
> Median household income: $38,380 — #45 out of 56 small cities in Ohio
> Unemployment rate in July 2021: 9.0% — #3 out of 56 small cities in Ohio
> Population:24,829 — #56 out of 56 small cities in Ohio

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Oklahoma: Stillwater
> Overall score: 58.09
> Best ranking business aspect: Business Costs
> Median household income: $34,309 — #12 out of 12 small cities in Oklahoma
> Unemployment rate in July 2021: 2.4% — #10 out of 12 small cities in Oklahoma
> Population:49,952 — #6 out of 12 small cities in Oklahoma

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Oregon: Redmond
> Overall score: 61.99
> Best ranking business aspect: Business Environment
> Median household income: $65,088 — #9 out of 17 small cities in Oregon
> Unemployment rate in July 2021: 5.9% — #2 out of 17 small cities in Oregon
> Population:30,167 — #14 out of 17 small cities in Oregon

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Pennsylvania: Lancaster
> Overall score: 51.06
> Best ranking business aspect: Access to Resources
> Median household income: $45,514 — #8 out of 19 small cities in Pennsylvania
> Unemployment rate in July 2021: 7.4% — #9 out of 19 small cities in Pennsylvania
> Population:59,433 — #5 out of 19 small cities in Pennsylvania

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Rhode Island: Woonsocket
> Overall score: 53.79
> Best ranking business aspect: Access to Resources
> Median household income: $42,595 — #5 out of 5 small cities in Rhode Island
> Unemployment rate in July 2021: 7.1% — #1 out of 5 small cities in Rhode Island
> Population:41,603 — #5 out of 5 small cities in Rhode Island

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South Carolina: Greenville
> Overall score: 59.86
> Best ranking business aspect: Access to Resources
> Median household income: $56,609 — #7 out of 14 small cities in South Carolina
> Unemployment rate in July 2021: 3.7% — #10 out of 14 small cities in South Carolina
> Population:67,737 — #3 out of 14 small cities in South Carolina

Gelshore2 / Wikimedia Commons

South Dakota: Aberdeen
> Overall score: 63.36
> Best ranking business aspect: Access to Resources
> Median household income: $52,651 — #1 out of 2 small cities in South Dakota
> Unemployment rate in July 2021: 2.9% — #1 out of 2 small cities in South Dakota
> Population:28,225 — #2 out of 2 small cities in South Dakota

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Tennessee: Spring Hill
> Overall score: 58.51
> Best ranking business aspect: Business Environment
> Median household income: $90,778 — #6 out of 22 small cities in Tennessee
> Unemployment rate in July 2021: 3.0% — #19 out of 22 small cities in Tennessee
> Population:39,711 — #11 out of 22 small cities in Tennessee

RoschetzkyIstockPhoto / Getty Images

Texas: Georgetown
> Overall score: 57.77
> Best ranking business aspect: Business Environment
> Median household income: $73,822 — #32 out of 82 small cities in Texas
> Unemployment rate in July 2021: 5.2% — #42 out of 82 small cities in Texas
> Population:71,004 — #16 out of 82 small cities in Texas

Eddie Maloney from North Las Vegas, USA / Wikimedia Commons

Utah: St. George
> Overall score: 67.67
> Best ranking business aspect: Business Environment
> Median household income: $58,259 — #27 out of 30 small cities in Utah
> Unemployment rate in July 2021: 2.8% — #12 out of 30 small cities in Utah
> Population:84,500 — #4 out of 30 small cities in Utah

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Vermont: Burlington
> Overall score: 44.35
> Best ranking business aspect: Access to Resources
> Median household income: $51,394 — #1 out of 1 small cities in Vermont
> Unemployment rate in July 2021: 3.1% — #1 out of 1 small cities in Vermont
> Population:42,545 — #1 out of 1 small cities in Vermont

SeanPavonePhoto / Getty Images

Virginia: Lynchburg
> Overall score: 55.20
> Best ranking business aspect: Business Costs
> Median household income: $46,409 — #18 out of 22 small cities in Virginia
> Unemployment rate in July 2021: 5.1% — #4 out of 22 small cities in Virginia
> Population:80,569 — #4 out of 22 small cities in Virginia

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Washington: Lacey
> Overall score: 56.51
> Best ranking business aspect: Access to Resources
> Median household income: $67,687 — #19 out of 36 small cities in Washington
> Unemployment rate in July 2021: 5.0% — #16 out of 36 small cities in Washington
> Population:49,248 — #17 out of 36 small cities in Washington

BackyardProduction / Getty Images

West Virginia: Morgantown
> Overall score: 55.23
> Best ranking business aspect: Business Costs
> Median household income: $42,966 — #3 out of 5 small cities in West Virginia
> Unemployment rate in July 2021: 4.1% — #5 out of 5 small cities in West Virginia
> Population:30,712 — #3 out of 5 small cities in West Virginia

Wisconsin: Manitowoc
> Overall score: 58.00
> Best ranking business aspect: Access to Resources
> Median household income: $47,861 — #22 out of 28 small cities in Wisconsin
> Unemployment rate in July 2021: 4.0% — #11 out of 28 small cities in Wisconsin
> Population:32,702 — #22 out of 28 small cities in Wisconsin

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Wyoming: Cheyenne
> Overall score: 60.28
> Best ranking business aspect: Business Environment
> Median household income: $64,598 — #2 out of 4 small cities in Wyoming
> Unemployment rate in July 2021: 4.1% — #3 out of 4 small cities in Wyoming
> Population:63,607 — #1 out of 4 small cities in Wyoming

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