One of the biggest questions for an entrepreneur is to figure out the best city to start their company. Forbes recently released their list of the top places to launch a startup for the year 2014.
The data was collected from an evaluation of the 50 most populous cities in the U.S. based on a number of criteria that promotes community engagement and access to resources. Why you ask? Because based on Forbes study, they believe that these are the factors that the next generation of entrepreneurs are looking at when choosing a city to set up base.
1. Small businesses as a percentage of total businesses. Cities that boast the highest relative concentration are more likely to offer access to resources that benefit small businesses than those that don’t.
2. Percentage of small businesses that accept credit cards. Such businesses are more likely to stay abreast of new technology—and more likely to earn higher revenues. A 2012 GoPayment survey estimated that small businesses that don’t accept plastic miss out on $100 billion in sales annually; those that do accept credit cards are likely to process more transactions and close more sales than those that do not.
3. Percentage of small businesses in high growth industries. The national economies with the highest median family incomes correlate closely with the nation’s fastest growing industries. Industry growth can predict housing, income, and population booms, and where cities grow, their businesses reap the benefits—a benefit even to startups in businesses outside the key industries. We awarded special weight to cities with high concentrations of businesses in computer software and services as it’s the second most trusted institution–just behind small businesses–according toPew Research, has grown consistently over a number years, and has been linked to overall community job growth. (According to Sageworks, those fastest growing industries of privately held companies are: support activities for mining; oilseed and grain farming; beverage manufacturing; agriculture, construction and mining machinery manufacturing; other crop farming; computer systems design and related services; offices of real estate agents and brokers; chemical and allied products merchant wholesalers/distributors; personal and household goods repair and maintenance; and employment services.)
4. Percentage of small businesses with Facebook pages and websites. It turns out that Internet-savvy businesses are likely to grow faster than those that don’t, and are also more likely to advertise online. Radius research also found that small businesses that stay active online receive more favorable feedback from customers. Web presence indicates adaptability and likelihood to innovate—creating a network effect for communities dedicated to growth and positive change.
5. Percentage of businesses with online reviews. A recent study from Pew Research Center identified small businesses as the most trusted group in the country. Analysis of online reviews reveals where the most well-liked (and least-liked) businesses in the country concentrate, signaling communities that embrace or reject locally-owned businesses. A concentration of small businesses with high (four- and five-star) online review ratings can also indicate where the most community-oriented business owners cluster.
The list is provided below: