The Hottest American Cities for New Businesses in 2017

Small business has rebounded, and the economy is primed for startups to explode across the country. Still, not all proving grounds are created equal. If you want the best possible shot at success, then you need to consider some of the best startup cities of 2017. These cities have earned their place through a combination of valuable metrics that include cost of living, cost of business, individual and corporate tax rates, access to resources and rates of success for new businesses.

Salt Lake City

Salt Lake is one of the country’s main startup hubs. It’s boom started before the rest of the nation was out of the recession, and it has one of the strongest economies as a result. Unemployment is currently at 3.7 percent. While this will create competition to hire workers, it also provides you with one of the most stable customer bases of any city in the world. Despite the extremely low unemployment, Salt Lake still has an impressive job growth rate that sits at 4.5 percent annually. The city is also home to the University of Utah -- the biggest resource in the area for educated employees.

Low tax rates and a competitive cost of living are additional reasons to start a business in this city. The corporate and personal tax rates are only five percent. On top of that, Salt Lake has a number of programs and incentives to enable new small businesses to succeed. The Startup Connectory helps businesses network and helps reduce a number of initial costs.

Houston Texas

Many people are surprised to learn that one of the country’s oldest and most established oil hubs is a hotbed for new businesses. A few factors make this less surprising. First, Houston wasn’t hit very hard by the housing bubble, so it has maintained a competitive economy, and the housing market has remained stable. The median home price is $190,000 which is low for a metropolitan area. Also, Houston is one of the richest environments possible for finding investors. The combined presence of old oil money and Fortune 500 companies leaves no shortage of opportunity. When you add the states extremely competitive tax structure (no income or corporate tax at all), you get a perfect storm of conditions for successful startups.

Oklahoma City

The Oklahoma City boom has managed to stay under many radars, but it has been one of the best cities for new businesses since the recent recession began. Oklahoma tax structure is not as enticing as Texas, but below average costs of living and business expenses easily compensate. That is bolstered by a number of incentive programs in the city. Take the Quality Jobs outreach. This incentive gives cash back to new businesses that successfully create new jobs.

Oklahoma City is also home to an inordinate number of small businesses. It doubles the per capita national average. This reduces competition with bloated corporations and opens vast networking opportunities. All of these factors combine to grant Oklahoma City the highest start up success rate in the country.


Oklahoma strikes again. Tulsa is smaller in population than Oklahoma City, but it boasts an even higher small business rate. Roughly two-thirds of all businesses in the city are small, and they provide an equal proportion of all employment. Tulsa is also even more affordable than Oklahoma City. The median home price is only $121,700, and the cost of living is equally minimal. Tulsa has a Small Business Connection program that provides additional resources to new businesses. It doesn’t quite have Oklahoma City’s success rate, but the current conditions are primed to change that.


Each of the previous cities has a claim on statistical success, but Austin is the startup capital. New business growth is higher in Austin than anywhere else, and it directly competes with San Francisco and D.C. for tech talent retention. Sitting in the heart of Texas, it enjoys some of the friendliest state-level business laws in the country. It is also home to the University of Texas that provides a wealth of new talent. Austin remains the king of new businesses for all of these reasons and one other. It hasn’t bloated. Where Northern California and D.C. have become oversaturated with startups and new businesses, Austin still has ample room for growth. Costs have not mirrored the astronomical prices you see in other tech regions, and the entire scene in Austin is still vibrant and filled with success stories. If you want to see the riches of Silicon Valley without drowning in competition, Austin is the place to start.

While these cities have the best return for small businesses, there are an abundance of thriving economies in 2017. If you have a niche business, consider some of the smaller cities around the country and you’ll be surprised at just how much opportunity is waiting to be seized.


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