The United States has long been a beacon of entrepreneurship and provides fertile ground for small businesses. As of July 2024, the U.S. Small Business Administration Office of Advocacy reports there are over 34 million small businesses in the United States. These small businesses make up 43.5% of the gross domestic product (GDP) and contribute to the ambitious culture and economic vitality of our country. Infinity Insurance Agency, Inc. (IIA) is proud to work with many business owners and recognizes the challenges of running a successful business. When embarking on your business journey you may wonder ‘What cities are best for business, and does choosing one city over another offer any advantages?’ Certain cities within the U.S. may be primed for small businesses due to factors such as available workforce, state income tax rate, and strong infrastructure.
Read on to uncover five great places to start a business in the U.S:
Austin, Texas
Once known mostly for Tex-Mex charm and a burgeoning music scene, today Austin, Texas is an oasis for ambitious entrepreneurs and small business owners. According to a study from USA Today, 5.03% of total employment in Austin comes from startups. Austin also ranked highly for business entry rate, net business openings, and percentage of households reporting self-employment income. Additionally, Austin welcomed a 46% GDP growth according to a study from Coworking Cafe. This city boasts a thriving tech industry and is start-up friendly thanks to a favorable tax environment and pro-business policies. Austin businesses can take advantage of a maximum state income tax rate of 0% and a maximum gross receipts tax rate of 1%, (Zebra). Furthermore, your budding business may take advantage of a high-quality talent pool, due to the city's proximity to major universities such as UT Austin and Texas State University.
Colorado Springs, CO
Looking for small business support out west? Consider Colorado Springs! Entrepreneurs looking to grow their startups may be intrigued to learn that Colorado Springs offers a high rate of employment in startups at 5.66%, (USA Today). This can be welcome news for business owners looking for a ready and engaged employee market. The city of Colorado Springs also offers numerous business resources such as COS Open for Business which is a one-stop guide that helps entrepreneurs build their business from idea inception to their grand opening. Hispanic business owners can also take advantage of their Hispanic Chamber of Commerce which was incorporated in 1989 to promote and assist in minority-owned small business development, (City of Colorado Springs).
Houston, Texas
All hail Houston! Known as the energy capital of the world, this urban mecca has also made itself appealing to entrepreneurs thanks to a 14% GDP growth and favorable tax rates. Houston along with the rest of Texas features a state income tax rate of 0% and a gross receipts tax rate of 1.00%, (Zebra). In addition, the city of Houston offered COVID-19 relief programs for small businesses and rolled out a $15 million small business recovery program, (Zebra). This capital city is one of the most diverse regions in our nation, which contributes to a large skilled workforce with footholds in healthcare, manufacturing, and international trade sectors. Houston employs nearly a third of the nation's jobs in oil and gas extraction and remains at the forefront of foreign investment in energy, (Greater Houston Partnership).
Miami, Florida
Sun-soaked Miami has proven itself to be more than just a vacation destination. This buzzing metropolitan center offers an easy gateway to Latin American markets and boasts a vibrant tourism and hospitality sector. According to data from USA Today, Miami is the best city for net business openings and boasts a respectable business entry rate of 16.1 (per 100 businesses). While Miami may have an elevated cost of living, entrepreneurs can take advantage of a diverse workforce where 26% of the population holds a BA, (CoWorking Cafe). Like the rest of Florida, Miami has a state income tax rate of 0% and the corporate tax rate of 4.458% tax rate is only applied to net income after accounting for expenses and other deductions, (Zebra).
Phoenix, AZ
Arizona’s urban heart features a pioneering spirit and pro-business attitude. According to the Greater Phoenix Economic Council (GPEC), Arizona offers a minimalist regulatory approach, no corporate franchise tax, and is constitutionally recognized as a right-to-work state. Moreover, businesses can take advantage of aggressive tax credits and incentives designed to increase capital, (GPEC). USA Today reported that Phoenix was home to the third-best net job creation rate and the fifth-highest net business opening rate. Founders may also be attracted to Phoenix’s accessible transportation and logistics, as over 35 million consumers can be reached within a single-day truck haul, and Phoenix Sky Harbor International Airport connects to 100 domestic and 24 international locations, (GPEC Analysis).
Beginning a new business venture is a time of excitement and trepidation. Business owners may want to consider all possible advantages, from proper commercial auto coverage to specific locations. As a new entrepreneur, you may favor certain business conditions over others. Whether you are looking for a favorable tax environment, an educated workforce, or a higher percentage of startups you can find business-friendly environments all over the U.S.
Want to learn more about how to secure commercial insurance for your business venture? IIA is proud to offer commercial auto coverage in Texas, Florida, and Colorado. Reach out to an agent today at 1-855-478-3705 to receive a free quote!