10 Overlooked Cities Where Business Opportunities are Rising Launching a new business? Check out these up-and-coming cities.
This story originally appeared on CNBC
More new businesses fail than succeed, according to the Kauffman Foundation. And U.S. Small Business Administration data shows it's only a matter of time before at least half of all businesses go under: Only about 50 percent survive five years.
Tax rates, real estate, hiring costs and financial strength were among the factors in the new CNBC Metro 20: America's Best Places to Start a Business. In all, we reviewed 107 metro areas across the U.S. Some up-and-coming areas just missed making the top 20. Here are 10 business-friendly cities that entrepreneurs would be wise to keep on their radar.
John Coletti | Getty ImagesOmaha, Nebraska
Omaha is arguably home to the smallest big business in the world -- Warren Buffett's $365 billion conglomerate Berkshire Hathaway employs approximately 25 people at its corporate headquarters. Of most interest to entrepreneurs though is an Omaha unemployment rate that is almost half that of the national figure and a workforce that is affordable and skilled.
Buffett is busy promoting entrepreneurship to children, but he also helps promote local business. His recent support for Hillary Clinton included the billionaire saying he would reserve Omaha's Ollie the Trolley for Election Day to get voters to polling places -- Ollie's bookings have since boomed. He also plugs local business during the Berkshire annual meeting.
Population growth rate: 5.77 percent
Average hourly wages: $23.19
Unemployment rate: 3.2 percent
Cost of living: Low
Median population growth rate, all metro areas: 4.77 percent
Median average hourly wages, all metro areas: $23.77
Median unemployment rate, all metro areas: 5.1 percent
Wendell Metzen | Getty ImagesOrlando, Florida
Orlando is a city everyone knows, but typically as a destination to visit a theme park or watch a NASA liftoff. But the city's biggest asset may be a booming population that is outpacing much of the nation.
Orlando is emerging as a tech hub, home to the National Center for Simulation, a collaboration between the government, academics and industry members working to do things like facilitate space exploration. The private space race backed by billionaires including Elon Musk and Jeff Bezos is still in its early days. There are 150 companies in the area centered around this tech niche, according to the Kauffman Foundation.
Population growth rate: 11.84 percent
Average hourly wages: $23.10
Unemployment rate: 5 percent
Cost of living: Average
Median population growth rate, all metro areas: 4.77 percent
Median average hourly wages, all metro areas: $23.77
Median unemployment rate, all metro areas: 5.1 percent
Getty ImagesMiami, Florida
Here's a tip from the Metro 20 data-crunching that matches a hot move recently made by one of the world's best hedge fund managers. Earlier this year, David Tepper, hedge fund billionaire and founder of Appaloosa Management, officially changed his tax residency and corporate headquarters from New Jersey to Florida. And with no state income tax, Tepper is not the only hedge fund manager to head south.
But there are other reasons why Miami is becoming a primary business destination. Reasonable living costs, for one. The area has also drawn an influx of Latin American immigrants who are helping to create an innovative Miami start-up culture. Greater Miami also has no local income or corporate tax, and Florida's corporate tax rate is 5.5 percent, one of the lowest in the nation.
Population growth rate: 8.05 percent
Average hourly wages: $22.81
Unemployment rate: 5.5 percent
Cost of living: Average
Median population growth rate, all metro areas: 4.77 percent
Median average hourly wages, all metro areas: $23.77
Median unemployment rate, all metro areas: 5.1 percent
Danita Delimont | Getty ImagesFort Myers, Florida
With Fort Meyers notching the third spot for Florida cities on this list, it wouldn't be unfair to look at the Sunshine State as a "new California" for start-ups.
The biggest benefit to small businesses in the Fort Meyers area, especially compared to California, is an extremely low cost of living. It also features a fast-growing population and low cost of labor. Several big-name businesses are already taking advantage of these perks, such as car-rental giant Hertz and retailer Chico's, both of which are headquartered in the area.
The city is now drawing in tech start-ups, too, and has local accelerators. Maybe that shouldn't be such a surprise, though -- among Fort Meyers' claims to fame is being a town where innovation icons Thomas Edison and Henry Ford once tinkered together.
Population growth rate: 13.45 percent
Average hourly wages: $20.64
Unemployment rate: 5 percent
Cost of living: Very low
Median population growth rate, all metro areas: 4.77 percent
Median average hourly wages, all metro areas: $23.77
Median unemployment rate, all metro areas: 5.1 percent
Springfield, Massachusetts
"The Simpsons" chose Springfield as a hometown for the average American connotation of the name -- it's not true that every state has a Springfield, but 35 states do -- but that knock doesn't do the Massachusetts' Springfield justice as a business hub. While the city sits in the lower part of the Pioneer Valley surrounded by fertile farmland and expansive forests, the city is continuing to develop as an urban business center, in particular for true small businesses.
The city's recent FutureCity 2026 report noted that three-quarters of Springfield's companies are small businesses with fewer than four employees, 20 percent higher than the Massachusetts and nationwide averages.
Major corporate projects are under way, including the Chinese rail company CRRC MA's new railcar factory and the MGM Springfield casino project. To appeal to a broader range of businesses, the city brought in consultant Newmark Grubb Knight Frank to develop the long-term economic plan. The consultant identified the city's 10 biggest selling points -- among them, proximity to major population centers, transportation logistics, higher education and a low cost of living and housing -- but also cited major weaknesses, including high property tax and utility rates and a limited skilled workforce.
Population growth rate: 1.68 percent
Average hourly wages: $23.17
Unemployment rate: 5.9 percent
Cost of living: Average
Median population growth rate, all metro areas: 4.77 percent
Median average hourly wages, all metro areas: $23.77
Median unemployment rate, all metro areas: 5.1 percent
Denis Tangney Jr. | Getty ImageGreensboro, North Carolina
Greensboro provides an interesting take on "location, location, location." The city, part of what's called the Piedmont Triad region, uses as a selling point that it's located within 650 miles of more than half of the U.S. population, a range that includes being between the hubs of New York and Miami.
Traditionally a town known for its textile and tobacco industries, Greensboro's economy has expanded into aviation and biotechnology, among other major sectors, with businesses attracted by reasonable labor costs and a low cost of living. It also has a good local talent pool with a workforce of more than 800,000 and 16 nearby colleges and universities.
The state of North Carolina has been helped with a push to lower tax rates: Corporate taxes went down to 5 percent last year, and personal income tax was decreased to 5.75 percent. Major companies expanding in the area include Caterpillar, PepsiCo, Procter & Gamble, Deere-Hitachi, Honda Aircraft, Ralph Lauren and Volvo.
Population growth rate: 3.92 percent
Average hourly wages: $21.02
Unemployment rate: 5.9 percent
Cost of living: Low
Median population growth rate, all metro areas: 4.77 percent
Median average hourly wages, all metro areas: $23.77
Median unemployment rate, all metro areas: 5.1 percent
Dave15957 | Getty ImagesDurham, North Carolina
Even entrepreneurs who hate Duke University basketball can find reason to like its hometown. Duke's hometown has also been busy recruiting start-ups and the elite tech firms from Silicon Valley.
Durham is located with the renowned Research Triangle Park, the largest science park in the country. Companies such as IBM, Syngenta and Cisco have operations in between Duke and two other major universities -- North Carolina State University in Raleigh and the University of North Carolina at Chapel Hill.
Alphabet's Google has also identified Durham as a hub for entrepreneurs: Raleigh-Durham is on the shortlist of towns where Google plans to bring its high-speed internet and cable service Fiber (though Google's expansion plans for Fiber are in flux ). Cities that already have Google Fiber, such as Provo, Utah (No. 2 on the Metro 20 list) , have touted the Google internet offering as part of a marketing pitch to business owners.
Many new North Carolina-based start-ups work out of American Underground, a campus built in a former tobacco warehouse that now houses start-ups and accelerators, with 220 small businesses in Durham and another 20 on a nearby Raleigh campus.
Population growth rate: 9.54 percent
Average hourly wages: $28.23
Unemployment rate: 5 percent
Cost of living: Average
Median population growth rate, all metro areas: 4.77 percent
Median average hourly wages, all metro areas: $23.77
Median unemployment rate, all metro areas: 5.1 percent
Walter Bibikow | Getty ImagesMadison, Wisconsin
Madison has a terrible tag to overcome: the Kauffman Index of Entrepreneurship ranked its home state of Wisconsin as the worst state for start-up activity in the country. For the record, the state does much better in the broader measure of entrepreneurship growth, at No. 23 among states in 2016.
Madison is an evolving entrepreneurial hub, thanks to its higher education, specifically the University of Wisconsin-Madison, a large economic driver in the area.
Madison, like Omaha, has a relatively low unemployment rate. Pair that with a decent cost of living and steady population growth, and Madison scores well relative to other metro areas.
Population growth rate: 5.94 percent
Average hourly wages: $27.54
Unemployment rate: 3.4 percent
Cost of living: Average
Median population growth rate, all metro areas: 4.77 percent
Median average hourly wages, all metro areas: $23.77
Median unemployment rate, all metro areas: 5.1 percent
Barry Winiker | Getty ImagesGrand Rapids, Michigan
Sometimes it's OK to be stuck in the middle. Grand Rapids, just miles from Lake Michigan, is opening doors for the business owners that choose to look past the coastal prejudice of the start-up world.
Grand Rapids does have a long history as a business capital, but primarily for its furniture industry, and that is still active in the area. But Grand Rapids has become much more than Furniture City, a message the city itself is trying to broadcast. Its economy is rapidly expanding to include major industries like biopharmaceuticals, science and engineering and agriculture.
A low cost of living, coupled with cheap labor and a low unemployment rate, are drawing businesses to the area.
The city also has a large Hispanic population -- as much as 16 percent of residents -- who are a major part of the small-business growth story. Michigan's Democratic senator, Debbie Stabenow, and Maria Contreras-Sweet, head of the U.S. Small Business Administration, were recently in town to discuss Hispanic entrepreneurship.
Population growth rate: 5.02 percent
Average hourly wages: $23.47
Unemployment rate: 3.7 percent
Cost of living: Low
Median population growth rate, all metro areas: 4.77 percent
Median average hourly wages, all metro areas: $23.77
Median unemployment rate, all metro areas: 5.1 percent
Anna Gorin | Getty ImagesBoise, Idaho
The state economy was once dominated by agriculture, but Idaho's capital now has a start-up scene rooted in technology. Successful entrepreneurs from the area are making efforts to foster a new generation of Boise-based companies, including through start-up hub B-Launched.
Boise has a relatively low unemployment rate and a housing market that is among the top 10 when it comes to home-value growth, according to Zillow.
Population growth rate: 9.79 percent
Average hourly wages: $22.91
Unemployment rate: 4 percent
Cost of living: Average
Median population growth rate, all metro areas: 4.77 percent
Median average hourly wages, all metro areas: $23.77
Median unemployment rate, all metro areas: 5.1 percent
