On the rise: These 25 cities have the highest potential for new business growth in the US
On the rise: These 25 cities have the highest potential for new business growth in the US
New business growth greatly benefits communities. Startups create jobs, attract new residents, and boost local economies. In some cities, new business ventures occur more frequently and in greater numbers, brought about by an environment that encourages and nurtures entrepreneurship.
To determine the top 25 cities with the highest potential for new business growth, the data and research team at Swyft Filings analyzed the 600 most populated cities in the United States using the most recent data from the Bureau of Labor Statistics and the Census Bureau and, with this data, created a composite score to rank each city. Various factors known to contribute to startup growth in a community were considered, including new business applications, unemployment rates, population growth, and new business survival rates. Quality of life factors were also considered, including the cost of living.
Key findings
- Cities in the South fare best: The average composite score of cities located in each region varied significantly. The South came in first with an average composite score of 58.1, followed by the Northeast at 54.1 and the Midwest at 52.2. Finally, the West had the lowest average composite score, at 50.9.
- Nationally, business applications decreased year over year: From 2021-2022, on average, new business applications across the nation decreased, falling by 5.8%. In comparison, among the top 25 cities in this analysis, business applications increased by 1.4% during the same period.
Cities with the highest potential for new business growth
25. Hillsboro, Oregon
- Population (2022): 107,299
- Business Opportunity Score: 76.6
With an impressive unemployment rate of just 2.9% in 2022 and a robust 4.3% increase in new business applications applications year-over-year, Hillsboro ranks 25th this year.
24. Vancouver, Washington
- Population (2022): 194,512
- Business Opportunity Score: 78.0
Over the last 20 years, Vancouver has experienced year-over-year population growth that shows no signs of stopping, opening the door for new businesses to capitalize on the expanding local economy.
23. Olympia, Washington
- Population (2022): 55,669
- Business Opportunity Score: 78.9
Home of the state's capital, Olympia boasts an unemployment rate that has decreased 0.9 percentage points year-over-year. This and economic factors such as a 7.58% increase in household income between 2020 and 2021 all bode well for the city's entrepreneurial future.
22. Palm Bay, Florida
- Population (2022): 129,234
- Business Opportunity Score: 79.0
Enjoying mild year-round weather and an average household income of $76,255, which is on the high end for Florida, Palm Bay ranks 22nd this year.
21. Tigard, Oregon
- Population (2022): 55,762
- Business Opportunity Score: 79.4
Access to extensive parkland and a revitalized downtown makes Tigard a desirable place to live. Combine those perks with a 4.3% year-over-year increase in business applications, and it's clear why Tigard is poised for growth.
20. Salem, Oregon
- Population (2022): 177,487
- Business Opportunity Score: 79.6
The unemployment rate in the state's capital has been impressively low in recent years, with the latest data indicating just 3.5% as of September 2023. This, combined with a robust 5.7% increase year-over-year in business applications, contributes to Salem's rank this year.
19. Eugene, Oregon
- Population (2022): 177,923
- Business Opportunity Score: 80.3
Known for lush forests and an active arts culture, Eugene also shows positive signs of economic growth and an increasingly welcoming environment for new businesses. Promisingly, the city's unemployment rate has decreased by 0.9 percentage points year-over-year as of September 2023.
18. Spokane, Washington
- Population (2022): 230,160
- Business Opportunity Score: 82.2
Ranking 18th is Spokane, known for its thriving downtown. The city also boasts a low unemployment rate of 3.3% as of September 2023 and rapid new business growth, with business applications increasing 1.8% year-over-year.
17. Edinburg, Texas
- Population (2022): 104,294
- Business Opportunity Score: 82.6
Located in the heart of the Rio Grande Valley, Edinburg offers scenic living and startup opportunities. Business applications increased 2.1% year-over-year here, helping to place this Texan city 17th.
16. Winter Haven, Florida
- Population (2022): 55,024
- Business Opportunity Score: 83.2
Mild weather and a fast-growing population place Winter Haven 16th. Between 2020 and 2021, Winter Haven's population grew by 13.4%, and the median household income rose by 4.7%.
15. Harrisburg, Pennsylvania
- Population (2022): 50,183
- Business Opportunity Score: 84.2
A low unemployment rate of 2.7% as of September 2023 helps to place Harrisburg 15th on the list.
14. Bentonville, Arkansas
- Population (2022): 57,868
- Business Opportunity Score: 84.4
An impressive 5.6% year-over-year increase in business applications combined with an unemployment rate of only 2.4% as of September 2023 has helped to land Bentonville 14th this year.
13. Burlington, North Carolina
- Population (2022): 59,287
- Business Opportunity Score: 84.7
Burlington features a mild climate, diverse cultural opportunities, and a low cost of living at 16.5% below the national average, meaning startup costs are likely much more manageable for new businesses than in most other cities.
12. Yakima, Washington
- Population (2022): 97,012
- Business Opportunity Score: 85.8
Known for agricultural production and more than 300 days of sunshine every year, Yakima also has a low unemployment rate, at 3.8% as of September 2023.
11. Bellingham, Washington
- Population (2022): 93,896
- Business Opportunity Score: 85.8
Featuring abundant outdoor opportunities and a low unemployment rate which hit 3.7% in September 2023, Bellingham ranks 11th on the list of cities offering a favorable environment for new business growth.
10. Concord, North Carolina
- Population (2022): 109,896
- Business Opportunity Score: 87.1
Also ranked one of the best places to live in the U.S., Concord features a lower cost of living compared to other major cities and a diverse range of industries.
9. Rapid, South Dakota
- Population (2022): 78,824
- Business Opportunity Score: 87.6
The city of Rapid features a diverse economy that includes both agriculture and tourism. An unemployment rate of only 1.8% as of September 2023 helps to place the city ninth on the list of best cities for encouraging new business growth.
8. Kennewick, Washington
- Population (2022): 84,750
- Business Opportunity Score: 88.2
Kennewick receives more than 300 days of sunshine each year and features a wide variety of recreational pursuits. The city's unemployment rate has also decreased by one percentage point year-over-year, helping to place the city 8th.
7. Springfield, Massachusetts
- Population (2022): 154,064
- Business Opportunity Score: 89.9
Named as one of the best places to live in Massachusetts, Springfield is the third largest city in the state and features a vibrant downtown and rich cultural history. It also shows signs of increasing economic health, with a reduction in its unemployment rate by 1.3 percentage points year-over-year.
6. Fort Myers, Florida
- Population (2022): 95,949
- Business Opportunity Score: 90.3
New business owners are flocking to Fort Myers. In fact, the city is the sixth fastest-growing city in the nation. Business applications have also increased 4.2% year-over-year, helping to place Fort Myers number six in the lineup.
5. Erie, Pennsylvania
- Population (2022): 93,511
- Business Opportunity Score: 91.8
Located on the shores of Lake Erie, the state's flagship city has much to offer. This includes an unemployment rate of 3.9% as of October 2023. Even more impressive, business applications increased a whopping 26.3% year-over-year.
4. Lacey, Washington
- Population (2022): 58,552
- Business Opportunity Score: 94.2
An outdoor lover's paradise, Lacey has vast parklands, lakes, and nature preserves. The city lands fourth on the list for many reasons, including its 3.43% population increase between 2020 and 2021. The average household income in the city also increased by 7.61% year over year.
3. Casa Grande, Arizona
- Population (2022): 60,032
- Business Opportunity Score: 96.2
In Casa Grande, business applications increased a whopping 7.6% year-over-year, landing the city third on the list.
2. North Port, Florida
- Population (2022): 85,099
- Business Opportunity Score: 98.2
A relatively new and up-and-coming city incorporated just 50 years ago, North Port ranks second in the nation for its potential for new business growth. Business applications in North Port increased 6.7% year-over-year, more than 10 percentage points above the national average.
1. Richland, Washington
- Population (2022): 62,821
- Business Opportunity Score: 100
Located in the heart of Washington, Richland takes the number one spot for cities with the greatest potential for new business growth. In addition to an unemployment rate that has decreased by one percentage point year-over-year, the city's population grew 4.4% from 2020 to 2022.
Methodology
To identify the 25 cities with the greatest potential for new business growth, the data and research team at Swyft Filings ranked cities with a population of 50,000 or more across five key dimensions: new business applications, unemployment rates, population growth, new business survival, and the cost of doing business. Below is a percent breakdown of how the data from each category factored into the scoring system.
Business applications (30% of composite score)
Both the volume of new business applications per capita and the rate of year-over-year growth were considered, with a heavier emphasis on growth. This metric, constituting 30% of the total score, is broken down as follows:
- Year-over-year growth in business applications (25%).
- Business applications per capita (5%).
Unemployment rate (25% of composite score)
Cities were assessed based on their unemployment rates, with a particular focus on the reduction of unemployment over the past year. This metric is a helpful indicator of improvements to a city's economic health and workforce utilization.
- Year-over-year reduction in unemployment rate (20%).
- Unemployment rate for the year 2023 (5%).
Population growth (25% of composite score)
Population growth rates from 2020 to 2022 were used to assess the growth in market size and community vibrancy, which are critical for business development.
New business survival (10% of composite score)
To measure the sustainability and supportive nature of each city's business environment, survival rates for both 1-year-old businesses and 5-year-old businesses were included in the analysis.
Cost of living (5% of composite score)
To evaluate the cost of doing business in each city, the proportion of income relative to household expenditures was included as a measure of affordability and economic feasibility for starting and maintaining a business sustainably.
This story was produced by Swyft Filings, a business formation service, and reviewed and distributed by Stacker Media.
