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The Best Cities for Starting a Small Business in 2017

A new report from the financial experts at WalletHub suggests that bigger isn’t always better when it comes to choosing a place to open up shop. Analysts compared the “business-friendliness” of over 1,200 cities with 16 key metrics, including available workforce, cost of office space, labor cost, financing, and growth potential, to determine which cities offer the best opportunity.

According to their research, cities with smaller populations can offer a much higher success rate for many types of business. For example, smaller cities have lower overhead costs, and offer the chance to build stronger relationships with local customers. Basically, it’s good to be a big fish in a little pond. Here are their top five picks:

  1. Holland, MI
  2. Carbondale, IL
  3. Springville, UT
  4. East Chicago, IN
  5. Jefferson City, MO

However, some of the least-efficient places for new small business owners were cities in California, including Saratoga, Castro Valley, Pacifica, Eastvale, and Suisun City. Also, WalletHub’s analysts caution that smaller cities have plenty of business drawbacks as well. There’s not much networking that can be done in less populated areas, there might be limited industry options, and it’s harder to attract and retain top talent. That said, if your dream is open up your own small business, it may not be a bad idea to think small. You can check out the full report here.

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