Startup Tuesday: Want to Start a Business? Don’t Move to New York
Posted by Guest Author on May 14, 2013 in Startups [ 0 Comments ]
New York—they say if you can make it here, you can make it anywhere. While this may be true, traditionally entrepreneurial cities like New York aren’t as conducive to business development as entrepreneurs might think.
In a recent report, Biz2Credit, an online platform that connects entrepreneurs with credit solutions, assessed the fastest growing cities for small business in America. The results showed that operating in big tech cities might be more of a hindrance than a help when it comes to small business entrepreneurship.
Annual revenue is highest in cities like New York, Boston, and Los Angeles, but profits are lower due to prohibitive taxes and insurance and operation costs. Excess overhead can cripple small businesses, which means that despite all the networking opportunities they might offer, traditional tech cities may not be ideal for small businesses. By contrast, other cities feature much lower costs of living, which means that they could be strong contenders to host American entrepreneurial ventures. As Biz2Credit Rohit Arora notes, “Technology levels the playing field.”
So before you book your ticket to New York, consider the advantages that other entrepreneurial locales may offer to your business. Traditional tech cities may be home to older, more established companies, but Biz2Credit’s study shows that cities like Houston, Denver, and Seattle are showing potential as sites for small business growth and development. Would-be entrepreneurs would be wise to consider a few factors before choosing a site for their new business:
- Know your city’s tax structure. In New York, taxes are notoriously high, rendering the city unaffordable for many startup businesses. States like Texas, however, have neither corporate nor individual income tax, meaning it has one of the lowest tax burdens in the country.
- Beware of high costs of living. This ties in with tax structures, but living in a city where the average cup of joe is $2 and the average cocktail is $12 can really take a toll on your wallet when you’re looking to network over drinks. Living in an expensive city may help connect your business with some powerful people, but it’ll come at a cost.
- Look for support. Focus on cities with established professional groups and Chambers of Commerce. Big tech cities offer a wealth of entrepreneurial networking opportunities, but don’t count out the little guys. Nearly every American metro area is home to some sort of business association, and the US Small Business Administration (SBA) has offices in every state across the country.
While some cities in America are more small business friendly than others, you’re not guaranteed success in one and failure in another. But location does matter more than most of us think. Be sure to do your homework and do what you love!
Bio: Liz Jacob is a writer and editor living in New York. She is a writer for Biz2Credit Business Loans, the #1 online credit resource for small business loans, business loans for women, equipment financing, working capital and other funding options. Biz2Credit has secured $800 million in funding for small business owners in the U.S. since 2007. Visit www.biz2credit.com and follow @biz2credit on Twitter for company and industry updates.