Best Small Cities for Starting a Business

Starting a new business is an exciting and challenging endeavor that requires careful consideration of several factors, including where to establish it. 

While every city offers its own unique advantages and opportunities, some cities stand out as prime destinations for budding entrepreneurs. The small cities included here provide a winning combination of a robust infrastructure, access to funding, a skilled workforce and a high quality of life.

In 2023, WalletHub deemed these 20 small cities in the following eight states to be the best locales for starting a business. The site compared over 1,300 cities in terms of business environment, resources and costs using 18 metrics, each of which is graded on a 100-point scale.

WalletHub then determined each city’s average across all criteria to calculate a total score — those that ranked the highest are listed here by state, with the states that had the most cities listed last.

Cities (total score): Coeur d’Alene (59.89)

Note: Stats were sourced from the 2023 WalletHub study.

Northern Idaho’s Coeur d’Alene is a small but vibrant community that is very welcoming to new businesses. Locals actively support and patronize companies based in town, allowing entrepreneurs to benefit from a loyal customer base and word-of-mouth referrals.

The town has a relatively low cost of living and a favorable tax structure. Plus, the local government actively fosters economic development initiatives for new businesses. Coeur d’Alene is also a tourist hotspot, as it is situated on Coeur d’Alene Lake. Hospitality, retail and service businesses can easily tap into the tourism market. 

Cities (total score): Morrisville (60.05)

Morrisville is North Carolina’s shining star when it comes to new businesses. The city benefits from its location in the heart of the Research Triangle region, which encompasses renowned research universities and major tech companies. This provides new businesses access to a skilled workforce, research collaborations and networking opportunities.

The city also boasts a business-friendly environment. Here, the local government actively promotes economic development programs that offer resources, grants and incentives to encourage the growth of local businesses.

For example, Morrisville recently launched its Morrisville Means Business program, which offers $4,500 grants and free business consulting and assistance to eligible companies impacted by the pandemic.