Best US Cities to Start a Business

We constantly monitor everything that happens in the field of startups. In 2019, the Stanford Graduate School of Business, which shared the top spot with Harvard Business School for many years.

became the leader in the number of new businesses founded by its alumni. On the one hand, this is natural, given that Stanford is located in the heart of Silicon Valley, on the other hand, it is still strange that Harvard, which graduates over 900 MBAs a year, is inferior to Stanford, where this figure does not exceed 500.

When an entrepreneur finds a favorable business environment—and when their “Grand Design” is aided by good luck—a miracle happens. After all, Uber, for example, started with an idea, and only then the company had investors and a loyal clientele, which allowed it to become a multinational giant that dominates the market today.

Where can you find the most favorable environment for your “Grand Design”? Volusia, an e-commerce platform that supports small businesses, has released its annual list of the best American cities for starting and growing startups. This year, Seattle, Washington took first place. (Seattle is home to several startups that make the list of top venture capital stocks, such as Booster Fuels and Fly Homes.)

The top five also included: Austin-Round Rock, Texas (2nd), San Jose-Sunnyvale-Santa Clara, California (3rd), Nashville-Davidson-Murfreesboro-Franklin, Tennessee (4- the place) and Denver-Aurora-Lakewood, Colorado (5th place).

“Some startups become successful over time, but not all grow,” writes Kevin Fowler, head of SEO at Volusia. – Choosing a city with a good business environment will help you find talent, improve your chances of getting funding, and reduce your tax and business costs. A startup’s location can determine its survival.”

The most favorable urban agglomerations for the development of start-ups

Seattle is not only home to the headquarters of major companies like Amazon, Microsoft, and Starbucks, it is also one of the most attractive cities on the West Coast for aspiring entrepreneurs – and for good reason. According to Fowler, 1.9% of firms in Seattle receive venture capital investments. In addition.

the local government actively supports the development of start-ups and small businesses, offering them special grants through the “Only in Seattle” initiative, which aims to “promote innovation in key areas and sectors.” What’s more, the Washington state government doesn’t levy income tax on startups to “help start-up entrepreneurs.”

Another influential player in the Seattle business ecosystem is the Foster School of Business at the University of Washington, best known as a technology center with 60% of alumni going to work in the industry.

The business school also ranks 24th in the U.S. for the number of entrepreneurs among its former students, according to U.S. News & World Report. In general, the business school is known for providing employment for 99% of its graduates. As a rule, they work in large companies in Seattle, but recently more and more Washington Foster alums are starting their own enterprises.

A similar situation has developed in the urban agglomeration, which took second place in the Volusia list. Fowler writes that Austin is “rapidly emerging as a hotbed of new ventures, especially in technology. The low cost of living and doing business has made Austin an attractive alternative to major cities like New York and San Francisco.

Austin is home to Rig Up, which has been on the lists of successful startups many times.

As Fowler notes, no ranking of the best places to grow startups would be complete without Silicon Valley, which came in third on the list this year.

Fowler says Stanford Graduate School of Business – known for its incredibly rigorous selection – is not the only option for young entrepreneurs who are eager to start their own business.

Startups boost employment, which benefits the economy

The Volusia platform uses an interesting technique to create a list of the best cities for entrepreneurship in the US. Data from the US Census Bureau’s Annual Entrepreneurial Survey, US Bureau of Economic Analysis Regional Price Parity, and the US Census Bureau’s 2017 Public Use Micro Data Sample are analyzed.

A total score is then calculated based on start-up density (percentage of all firms that have been in existence for less than two years), small business density (percentage of all firms with 50 or fewer employees), number of firms receiving venture capital investment, cost of living, and other factors.

The study asks the following question: how many business owners do not consider “lack of work” an important factor when starting their own business?

This allows you to find out other motives of entrepreneurs, for example, the unwillingness to obey anyone, the search for opportunities to realize their creative ideas, the desire to work on a flexible schedule, etc. In addition, the number of recent college graduates among city residents is counted. This indicator indicates the presence of employees who can become employees of start-ups.

“It is noteworthy that the majority of entrepreneurs in the US (76.8%) did not open their business because they did not have a job. However, building a business from scratch is an extremely difficult task.

Startups face many challenges related to funding, production costs, and finding the talent and resources needed to expand the enterprise. For example, only 0.48% of startups receive venture capital funding. Factors that increase the likelihood of success include: reduced overhead costs, the availability of talented job applicants, access to capital, as well as other start-ups and ideas.

Startups make up 9.2% of all enterprises in the country, but not everywhere there are favorable conditions for their development

As with established businesses, the number of start-ups depends on the state of the economy, he said. For example, before the global economic crisis, the number of young enterprises reached a record 457,223, but in just four years – from 2006 to 2010 – this figure fell sharply to 326,091. Since then, start-ups have regained lost ground, but their number has not reached pre-crisis levels. According to Fowler, there were 416,853 firms in 2018 that were less than one year old.

The advantage of startups is that even during periods of economic downturn, they continue to generate employment growth, which benefits the economy.

“Compared to established businesses, start-ups create more jobs despite lower overall employment. In 2018, start-ups created 1,700,208 jobs, while established businesses created only 518,384.

Remarkably, during the Global Economic Crisis, established companies lost many jobs—including four million in 2010—whereas in start-ups, the number of workers places continued to grow. Like the number of new start-ups, employment growth driven by young companies is slowly picking up, but is still below pre-crisis levels.”