Location, location, location
With over 400,000 new business started every year in the U.S. yet such grim success rates, small businesses have to ensure the most profitable variables are utilized. The first one that comes to mid is location; a factor that can make, or break, the best of ideas.
Because of such risks, the financial wizards at WalletHub compiled a list of the most suitable locations to break ground for small businesses to-be.
Prime small business spots
The top five picks based on a “business-friendliness” analysis of over 1,200 cities and 16 metrics including labor cost, cost of office space and growth potential are as follows:
1. Holland, MI
2. Carbondale, IL
3. Springville, UT
4. East Chicago, IN
5. Jefferson City, MO
What’d You Expect?
I assumed because of their popularity, that a few major cities would make this list like Los Angeles, Atlanta, or New York, but on the contrary, small cities are better for small businesses. According to WalletHub this is true because cities with smaller populations have inherently lower startup costs and make it easier to establish stronger relationships and subsequent customer loyalty.
This doesn’t however mean you should pack up and head to the closest small city to set up shop.
There are also cons to small cities like limited resources, limited networking, and limited customers among others.
Least efficient for small business
Alternatively are the cities you should avoid for your small business venture. That list starts off with five California cities: Saratoga, Castro Valley, Pacifica, Eastvale, and Suisun City. The huge population of The Golden State, business saturation and proximity, are just a few reasons these cities aren’t the best.
Remember the goal is to be the big fish in a small pond.
Moving to these places may not be feasible for some, but the list establishes a good outline to follow if you are planning a small business: Find a smaller city with the right amount of resources for your industry and build relationships with the smaller and therefore easier to access customer pool.