Small Business Hot Spots: The 3 Best Places to Lay Down Roots

Date: September 01, 2016

A new report reveals the top 20 cities for starting a business. Did yours make the list?

The warm-weather state that’s a hotbed for small business activity? Here’s a clue: It’s not the one that houses Silicon Valley.

Instead, as a new CNBC report highlights, the Lone Star state is quickly becoming a mecca for new businesses. Thanks to El Paso (No. 16 overall), McAllen (No. 12), San Antonio (No. 10), Dallas (No. 8), Houston (No. 6), and Austin (No. 1), Texas dominates the report. 


Favorable taxes are certainly a common theme, but these Texas cities—and elsewhere throughout the country—have other ties that bind, including access to education, growing populations and more. 

Here’s a closer look at the top three cities to start a business. 

1. Austin, Texas 

The city of Austin has been home to the SXSW music festival since 1987, but music fans aren’t the only people attracted to the area. Small business entrepreneurs will find a booming tech industry that has helped bring the unemployment rate down to 3.6 percent. In fact, Austin was recently ranked the fifth best city in the nation for attracting and retaining tech talent. It is also the metro area with the fastest population growth. 

“There’s a young, educated workforce (the University of Texas is based in Austin), no state individual or corporate income taxes, and enough different industries represented to offer an array of opportunities for start-ups,” the report said. 

2. Provo, Utah

Part of Utah’s Silicon Slopes (a group of cities stretching along the Rocky Mountains), Provo ranked second on the list of best places to start a small business. The Slopes have become an entrepreneurial tech hotbed over the past decade, with companies worth over $1 billion on paper. Other pluses include low taxes, inexpensive real estate, and a skilled young workforce hailing from the University of Utah, Utah State, and Brigham Young University. It makes sense that many Shark Tank participants call Provo home. 

3. Washington, D.C.

Our nation’s capital is known for more than just politics—it’s also a great breeding ground for startups. In 2015, venture capital firms invested more than $700 million to fund new D.C.-area tech startups. Reflecting this, Washington, D.C.’s unemployment rate was 5.9 percent as of July 2016. The study points out that although D.C.’s taxes can be challenging, the presence of so many government agencies means a lot of potential business for companies.

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