The Best Cities for New Small Businesses (Infographic)

A new study looks at where young businesses are thriving.

learn more about Jessica Thomas

By Jessica Thomas

Joe Rebello | Getty Images

Starting a business is an inherently risky endeavor, especially when headlines and statistics tout findings that around 20 percent of small businesses fail within the first year and 50 percent within five years. But those prospects can change dramatically based on where you headquarter your business.

A recent study from online business loan site LendingTree found that certain cities in the U.S. are better places to start new small businesses than others. To determine the rankings, LendingTree looked at the data it has from companies applying for loans and studied the percentages of businesses that were profitable, the percentage less than six years old, the percentage with less than $1 million in revenue and the percentage with fewer than 250 employees across U.S. metro areas.

Related: Infographic: The 10 Best Cities for Young Entrepreneurs in the U.S.

The city that took the top spot? Seattle, where more than 95 percent of businesses have fewer than 250 employees. Around 70 percent earn less than $1 million in revenue, and 71 percent are profitable.

The biggest surprise on the list is the state that dominated the top 10: Florida. Maybe thanks in part to business-friendly tax policies and relatively low cost of living, three cities in Florida made the top 10 ranking. Here's the complete list:

  1. Seattle

  2. Denver

  3. Tampa, Fla.

  4. Miami

  5. Portland, Ore.

  6. Atlanta

  7. Orlando, Fla.

  8. Los Angeles

  9. New York

  10. Minneapolis

A fourth Florida city, Jacksonville, barely missed the top 10 with its eleventh-place ranking. Results suggested that, comparably, the "worst" cities to start a business were Birmingham, Ala., Hartford, Conn. and Memphis, Tenn., where big corporations dominate.

Related: The Top Cities for Minority Entrepreneurs (Infographic)

See the below infographic and the complete study for more information on the top three cities on the list and what makes a city friendly to new small businesses.

Related: Infographic: Here Are the 15 Most Entrepreneurial Cities in the U.S.

Jessica Thomas

Entrepreneur Staff

Senior Digital Content Director

Jessica Thomas is the senior digital content director at Entrepreneur. Prior to this role, she spent nearly five years on staff at Worth magazine and was a staff writer for Bustle. 

Related Topics

Editor's Pick

Have More Responsibilities at Work, But No Pay Bump? Use This Script to Get the Raise You Deserve.
Black and Asian Founders Face Opposition at All Levels — Here's Why That Has to Change
Living

Invest in Yourself: 10 Things Every Working Woman Should Do This Year

When striving for success, it is easy to forget about your mental and physical health. But without health, you cannot fully succeed. Follow these ten lifestyle strategies for success in your personal and professional life.

Thought Leaders

5 Small Daily Habits Self-Made Millionaires Use to Grow Their Wealth

We've all seen what self-made millionaires look like on TV, but it's a lot more subtle than that. Brian Tracy researched what small daily habits these successful entrepreneurs adopted on their journey from rags to riches.

Leadership

5 Internal People Every CEO Needs

No leader should ever find themselves alone in their struggles and decisions. Leadership is about having a team of people to provide help and support through the difficult moments of the hour.

Business News

'Completely Absurd': The Average U.S. Male Can't Fit Into Universal Studio's New 'Blatantly Fatphobic' Mario Kart Ride

Mario Kart: Bowser's Challenge formally opens to the public as a part of Super Nintendo World inside of Universal Studios Hollywood on February 17.