The Best Cities for New Small Businesses (Infographic) A new study looks at where young businesses are thriving.

By Jessica Thomas Edited by Jessica Thomas

Joe Rebello | Getty Images

Starting a business is an inherently risky endeavor, especially when headlines and statistics tout findings that around 20 percent of small businesses fail within the first year and 50 percent within five years. But those prospects can change dramatically based on where you headquarter your business.

A recent study from online business loan site LendingTree found that certain cities in the U.S. are better places to start new small businesses than others. To determine the rankings, LendingTree looked at the data it has from companies applying for loans and studied the percentages of businesses that were profitable, the percentage less than six years old, the percentage with less than $1 million in revenue and the percentage with fewer than 250 employees across U.S. metro areas.

Related: Infographic: The 10 Best Cities for Young Entrepreneurs in the U.S.

The city that took the top spot? Seattle, where more than 95 percent of businesses have fewer than 250 employees. Around 70 percent earn less than $1 million in revenue, and 71 percent are profitable.

The biggest surprise on the list is the state that dominated the top 10: Florida. Maybe thanks in part to business-friendly tax policies and relatively low cost of living, three cities in Florida made the top 10 ranking. Here's the complete list:

  1. Seattle

  2. Denver

  3. Tampa, Fla.

  4. Miami

  5. Portland, Ore.

  6. Atlanta

  7. Orlando, Fla.

  8. Los Angeles

  9. New York

  10. Minneapolis

A fourth Florida city, Jacksonville, barely missed the top 10 with its eleventh-place ranking. Results suggested that, comparably, the "worst" cities to start a business were Birmingham, Ala., Hartford, Conn. and Memphis, Tenn., where big corporations dominate.

Related: The Top Cities for Minority Entrepreneurs (Infographic)

See the below infographic and the complete study for more information on the top three cities on the list and what makes a city friendly to new small businesses.

Related: Infographic: Here Are the 15 Most Entrepreneurial Cities in the U.S.

Jessica Thomas

Entrepreneur Staff

Senior Digital Content Director

Jessica Thomas is the senior digital content director at Entrepreneur. Prior to this role, she spent nearly five years on staff at Worth magazine and was a staff writer for Bustle. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business News

Fans of Costco's $1.50 Hot Dog Combo Are In for a Big Surprise

Costco CEO Ron Vachris announced a change that's coming soon to the company's food courts.

Business News

'Nobody Ever Gave Me Anything': More Boomers Say They're Not Transferring Wealth to Family Until They're Dead

A new survey from Charles Schwab found boomers are more hesitant to distribute their wealth than other generations.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

Leadership

How a Mindfulness Practice Can Help You Beat Tech Overwhelm

This article explores how mindfulness can transform your tech choices, ensuring technology serves your business goals without adding unnecessary complexity.

Business News

Instagram Is Offering TikTok Creators Up to $50,000 Per Month For Exclusive Content

Leaked deals show that there are strict terms to receiving the money.

Business News

Uber's CEO Says Drivers Have About 10 Years Left Before They Will Be Replaced

Uber CEO Dara Khosrowshahi says the jobs of human drivers are safe for the next decade, but after that, another type of driver will take over.