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Best cities to start a business in 2016

Thinking about a startup? Be undefeated in your research

So many people have been inspired to start their own small business. My great-uncle once told me to never count on my main income to be my main source of income. It took me a little while to figure out what the heck that meant, but now I understand.

I once took on the challenge of running a small business and a nonprofit agency part time while raising my daughter as a young single parent. While it was rewarding in so many ways (including setting my own hours), it required tons of research.

One question I’ll always have is what if I had started my business in a different city? Could I have been more successful if I looked at other places to launch? I’m sure many people wonder the same things.

There has been a boom in business startups. Twenty percent of Americans are currently exploring entrepreneurship. Several reasons surround this decision.

Massive job cuts took place between 2008 and 2012, thanks to bookended recessions. And some recent graduates are still struggling to find work despite the boost in hiring in the past several years. According to an article on FiveThirtyEight.com, 2014 was the best year for jobs since 1999.

Regardless, some cities are better than others for startup businesses. If you are thinking about starting your business, understand that location is everything.

With that in mind, I went on a search to find the best cities to start a new business. I assessed several different factors for cities in all 50 states where access and availability to resources, business-friendly government, small-business lending environment, business tax rates and hiring pool are all important.

I also evaluated cities where small businesses thrive. I looked at cities where businesses are internet-savvy, where there’s a major social-media presence and places that have online surveys. These cities made the top 10.

Nashville, Tenn.

There is no state tax in Tennessee, where the Tennessee Small Business Development Centers Network provides small business startup services including business-plan development, financial-planning assistance, marketing-plan development, sources of capital and social-media guidance. The center, which is hosted by Nashville’s Tennessee State University, also assists existing businesses in business-growth planning. Nashville also has a low cost of living.

Austin, Texas

The cost of living in Austin is impeccable. You can run a business from a home office while in the infancy stage and take advantage of tax breaks. Texas does not have an individual or corporate income tax.


If you’ve done your homework, private funding is readily available. There were 4,200 startups in 2012.

Oklahoma City

It’s much easier to secure a small-business loan in Oklahoma City than in most cities, and the cost of living is low.


This beautiful city has lots of business incubators, and it hosts annual events geared to business owners.


Denver has a higher cost of living, but it ranks among the best cities to start a business because of recent growth. As Colorado’s capital city, Denver is home to a high number of small-business investors. There are plenty of business resources.


Black-owned businesses thrive in Atlanta. The city has a load of small-business centers. It also has a high rate of government contracts available for minorities. Atlanta does a great job with disseminating contract information to the general public. Georgia State University has a resource center available for information. The state also offers great tax rebates to startups.

Rockville, Maryland

Rockville is located close to Washington, D.C., where some of the most powerful resources are available. More than half of its residents hold bachelor’s degrees, while 32 percent have graduate degrees.

Santa Monica, California

Great businesses are already harbored here. There are more than 23,000 small businesses and 32 percent are owned by women. It hosts many digital-media companies and it’s close to Los Angeles.

San Francisco

There are venture capital and technology giants all over the place in San Francisco. There are universities throughout the region where resources can be obtained. Entrepreneurs have been successful in San Francisco and most of the businesses have a heavy online presence.

For more information on the hottest places to start a new business, check out this Forbes list.

Kelley Evans is a digital producer at Andscape. She is a food passionista, helicopter mom and an unapologetic Southerner who spends every night with the cast of The Young and the Restless by way of her couch.