Brice Wallace
Utah dominates a list of small cities that are the best in the nation for starting a business.
The annual list, released by personal-finance website WalletHub, shows that among the top 20 small cities in the U.S. for startups, eight are in Utah, including the top three. Last year’s rankings featured seven Utah locations in the top 20.
Washington is ranked No. 1 and St. George is No. 2, retaining their rankings from 2022. Cedar City moved up from{mprestriction ids="1,3"} No. 4 last year to No. 3 this year. Logan jumped from No. 8 to No. 5. Lehi advanced from No. 14 to No. 9. Midvale jumped into the top 20, at No. 15 this year.
Meanwhile, Eagle Mountain slipped from No. 9 to No. 11 and Pleasant Grove fell out from the No. 20 spot, replaced there by American Fork, and finished No. 25.
WalletHub compared more than 1,300 cities with fewer than 100,000 residents across 18 metrics. The data set ranged from small-business growth rates and accessibility of financing to investor access and labor costs.
St. George is No. 1 nationally for business environment, while Logan is No. 5 among cities for accessible financing. St. George, Washington, Cedar City, American Fork and Eagle Mountain all tied for No. 1 for the average growth in the number of small businesses. Washington and St. George tied for No. 1 for startups per capita.
In addition to dominating the top 20, Utah has nine other cities sprinkled throughout the top 100: No. 26 Spanish Fork, No. 27 Orem, No. 52 Draper, No. 71 Murray, No. 72 Taylorsville, No. 75 Springville, No. 81 Sandy, No. 84 Saratoga Springs and No. 97 Herriman.
Other Utah small cities included in the rankings are No. 103 South Jordan, No. 128 Tooele, No. 131 Clearfield, No. 156 Holladay, No. 157 Ogden, No. 192 Cottonwood Heights, No. 205 Layton, No. 207 Roy, No. 220 Riverton, No. 256 Bountiful, No. 293 Kaysville and No. 343 Syracuse.
The bottom-ranked city in the U.S. is Cupertino, California.
The full list is available at https://wallethub.com/edu/best-small-cities-to-start-a-business/20180.
WalletHub last week released a list of best large cities for starting a business. Salt Lake City is not ranked in the top 100. Orlando, Florida, is No. 1. WalletHub noted that the list includes only the city proper in each case, excluding cities in the surrounding metro area.
“Successful startups require talented people,” said William I. MacKenzie, executive editor of The Journal of Social Psychology and associate professor at the University of Alabama. “If small cities wish to increase entrepreneurial activity, they must develop, attract and retain talent.
“Human capital is a critical resource for most companies. Investing in education to develop a capable workforce, creating and maintaining an infrastructure for startups and companies of all sizes, and making investments to improve quality of life will all benefit small cities looking to increase entrepreneurial activities and attract talent and future employers.”
Patrice A. Luoma, professor and director of the M&T Bank Center for Innovation & Entrepreneurship at Quinnipiac University, said smaller cities generally offer startup companies a cheaper cost of living, lower costs for rent and insurance, and less competition than in a larger city. However, small cities also may lack a startup culture or adequate infrastructure, she said.
MacKenzie agreed that the biggest advantages of starting a business in a small city are reduced costs and less competition. Small cities also have fewer competitors for business startup and an easier environment for establishing a brand.
The disadvantages include fewer customers and fewer resources, he said. “Talented employees, commercial space and suppliers are all going to be more limited than what a business will be able to find in a larger city,” MacKenzie said.
The Utah District Office of the U.S. Small Business Administration will celebrate 2023 Small Business Week with an awards and lender ceremony and lunch May 4, 11 a.m.-2 p.m., at Mountain America Credit Union’s Tanner Building, 7167 S. Center Park Drive, West Jordan.{/mprestriction}
