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What Are the Best Cities for Small Businesses? The Credibly Business Index Has the Answer

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Is your home city a good place to launch a small business, or would you have a greater chance at success somewhere else? Until now, there hasn’t been a simple guide to help entrepreneurs answer that question. Credibly is about to fix that.

In our quest to provide practical resources for small-business owners, Credibly.com is proud to announce the Credibly Business Index, which aims to calculate the “friendliness” of American cities towards small businesses.

Using a variety of data taken from the United States Census and the US Small Business Administration — such as the number of businesses in each city, their annual revenue, and how many businesses stay open after their first two years — the Credibly Business Index uses a proprietary calculation to crunch those variables into a single number, on a scale of 1-100. The first installment of our City Index features 74 mid- to large-sized cities across the United States. Here are some key takeaways…

Tech-Boom Towns Still Lead the Way

With matching scores of 92, the top rated cities in the Credibly Business Index were Seattle and San Francisco — two well-known hubs of high-tech ingenuity. Though business competition is strong in both cities, the available talent and opportunity to reach consumers with fresh ideas is unparalleled. Adding to the West Coast’s strong showing, Portland landed in fourth place with a score of 85.

Stockton Can’t Lose Its Bad Reputation

Infamously named “America’s Most Miserable City” by Forbes in 2009 and 2011, Stockton came in dead last on the Credibly Business Index, with a woeful score of 28. Stockton’s poor tally owed to its intimidating failure rate for small businesses — roughly 67% of Stockton small businesses will shutter within the first two years — as well as its recent municipal bankruptcy. But Stockton wasn’t the only California town that’s challenging for small-business owners: Sacramento (52), Long Beach (52), Oakland (54), Chula Vista (54) and Fresno (54) also turned in underwhelming scores.

Texas Is a Mixed Bag

Is Texas a good state to start a small business? It depends on where you are. The scores for the nine Texas cities we considered landed all over the map, from frontrunner strong (Austin and Houston, both at 80) to bottom of the pack (Arlington at 51, El Paso at 53, Corpus Christi at 55).

Browse through all 74 cities in the Credibly Business Index right here, and read on for our lists of the highest and lowest scoring cities.

10 Highest Scored Cities:
Seattle (92)
San Francisco (92)
Chicago (86)
Portland (85)
Denver (83)
New York (83)
Indianapolis (80)
Austin (80)
Houston (80)
Phoenix (80)

8 Lowest Scored Cities:
Stockton (28)
Laredo, TX (36)
Lexington, KY (49)
Virginia Beach (50)
Arlington, TX (51)
Sacramento (52)
Long Beach (52)
El Paso, TX (53)

(Oakland, Chula Vista, Fresno, and Mesa, Arizona were in a four-way tie for 9th place with scores of 54.)