The state lags behind the Midwest and South.
If you’re looking to start a business in a small city in California, your best bet is San Dimas—but the state doesn’t boast some of the best towns nationwide overall, according to a new study.
A 2016 study by personal finance site Wallet Hub looked at more than 1,200 U.S. cities with populations between 25,000 and 100,000. Perhaps not unsurprisingly with the state’s harsh climate towards small business owners, California cities rank in the middle to back of the pack when it comes offering business friendly small towns to hang your shingle. Overall, the Midwest and the South feature some of the top small towns for business. Here are how the top 10 California small cities ranked:
San Dimas (No. 567)
South Gate (No. 579)
Santa Barbara (No. 671)
San Ramon (No. 681)
Banning (No. 685)
Rowland Heights (No. 688)
Twentynine Palms (No. 694)
South San Francisco (No. 702)
Compton (No. 733)
Walnut Creek (No. 735)
The study looked at three main factors: business environment (including startup rate, industry variety and average revenue per business), access to resources (including financing, investors and employees), and business costs (including office space affordability, cost of living and corporate taxes).
It ranked Holland, Michigan, the best small city in the country to start a business, with Suisun City, California, coming in last. California cities take up the last 24 spots on the list.
The study also talked to experts about how cities can encourage business creation. “The number one rule when building an entrepreneurial ecosystem is that it must be led by the entrepreneurs,” said Birton J. Cowden of the Berthiaume Center for Entrepreneurship at University of Massachusetts Amherst. “So local authorities need to provide a platform that incentivizes startups, look to its top entrepreneurs as the leaders, and then do their best to keep up to allow the entrepreneurs to thrive.”