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12 Best Small Cities to Start a Business

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Related: 10 Things to Do When You Need to Boost Business

Entrepreneurs looking to start a business would be well advised to consider a small city for their startup, according to new report from WalletHub, a personal finance website.

A city with a relatively small population can offer a greater chance of success, depending on an entrepreneur’s type of business and personal preferences. The best ones can help new businesses survive economic shocks, such as the pandemic.

New business owners can find attractive benefits in small cities, including lower overhead costs, stronger relationships with customers and the potential to become a big fish in a small pond, WalletHub noted. 

But they also present drawbacks. Entrepreneurs who want to build a large professional network are unlikely to make many connections in a town with a smaller number of residents. Other restrictions might include limited industry options, a less diverse customer base and difficulty attracting and keeping top talent.

To determine the best small cities to start a business, WalletHub compared the business-friendliness of 1,334 cities of between 25,000 and 100,000 residents across the key dimensions of business environment, access to resources and business costs. 

Researchers evaluated those dimensions using 18 metrics, and graded each one on a 100-point scale, with a score of 100 representing the most favorable conditions for launching a business. 

They then determined each city’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank-order the sample.

See the gallery for the 12 best small cities to start a business.