Silicon Valley. It’s the place to be for a tech startup. Or is it? The area’s cool factor may lose some of its appeal when you add up the exorbitant business and living costs. Have you thought about Lincoln, Nebraska? Or what about Columbus, Ohio?
What’s important in real estate is also key in business success: location, location, location.
Look for a business-friendly environment
“Young entrepreneurs hoping to strike startup gold have a lot to take into consideration, and which U.S. city will provide the friendliest environment and the best shot at success for their new venture should absolutely be on the list,” Kathryn Dill writes in this Forbes article.
The personal finance site NerdWallet developed a list of the top cities based on access to funding, opportunities for networking and mentorship, the local economy and cost of living. It also reviewed the value of small business loans, networking and mentorship opportunities and the percentage of residents age 25 to 34 and the percent of population over age 25 with at least a bachelor’s degree.
Some surprising cities
Arlington, Virginia topped the list for its large population of well-educated young adults–at least 74 percent of the city’s residents over 25 hold a bachelor’s or higher degree.
“Arlington, Virginia makes sense because it’s in the D.C. metro area,” according to NerWallet analyst Sreekar Jashti, who was quoted in Forbes. “A lot of the numbers we looked at Arlington ranks really high for: Per capita income, the number of businesses around, and especially educated peers – education rates in Arlington are extremely high.”
But you probably wouldn’t guess some of the top cities on that list: Madison, Wisconsin; Lincoln, Nebraska; and Minneapolis, Minnesota.
When deciding where to start your business, don’t overlook cities that offer perks such as small business loans and lower costs of living.
“One thing that was a little surprising is that Midwestern cities ranked really well,” Jashti told Forbes. “Lincoln, Nebraska, Madison, Wisconsin – that’s a little surprising at first glance but it makes sense as well. Madison is a very business-friendly environment with low unemployment, a relatively good cost of living index for a big metropolitan city, and lots of people between ages 24 and 34, and those people are well-educated.”
Affordability is an issue
California cities closely associated with the startup scene did not rank well.
“Some of the numbers that California cities lag behind on are affordability,” said Jashti. “We’re looking at where young entrepreneurs can limit their costs when they’re trying to get their business running – California lags behind there. Metrics like unemployment rate or even the funding rate also fell behind.”
Look for cities that offer perks like what this recent Kiplinger’s article calls “free insider assistance.”
Columbus Ohio, ranks as one of the publication’s most affordable big cities with its lower-than-average housing costs. And the city also helps startups cut through red tape.
Small business resources
The city has a “small business concierge,” a newly created position to help entrepreneurs get settled in Columbus. The city recently launched the Small Business Builder, an online resource to guide you through each stage of starting and expanding your business, according to Kiplinger’s.
Columbus is one of a growing number of cities coming up with ways to attract small businesses. So while you’re planning your startup, be sure to think about how geography can help you launch the next big thing.
