The study revealed that four of the top 10 cities to start a business in are in Texas — Austin, Dallas, San Antonio and Houston — meaning the state has serious entrepreneurial power. Also interesting is that more than half of the worst 10 cities to launch a business in had a below-average cost of living, so entrepreneurs might have lower expenses in these areas but a smaller chance of success.
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Methodology: These findings are the result of a GOBankingRates study of eight factors affecting startups in major metropolitan areas of the United States. The study assessed the following: (1) rate of new entrepreneurs, sourced from the 2017 Kauffman Index of Startup Activity data; (2) opportunity share of new entrepreneurs, from the 2017 Kauffman Index of Startup Activity data; (3) startup density, from the 2017 Kauffman Index of Startup Activity data; (4) rate of business owners; (5) survival rate of new businesses; (6) established small-business density, all from the 2017 Kauffman Index of Main Street Entrepreneurship. Each Kauffman metric corresponded to a year, so to get a more inclusive picture, the three-year average for each metric was calculated. Additional factors: (7) cost of living, sourced from Sperling’s Best Places; (8) projected job growth, from Sperling’s Best Places. Once the information was collected, it was assigned a ranking between zero and 1. Scores for each category were weighted equally. Scores were added together for a total ranking. Cities with lower scores were considered the most favorable for starting a business.
