Salt Lake City, Utah

10 Best Small Cities to Start a Business in 2023

We recently highlighted the best states to start a small business, as well as the least expensive states to start a business. Getting more granular, we now have some data on the best “small cities” to start a business.

To determine the best small cities to start a business, WalletHub compared the business-friendliness of more than 1,300 small-sized cities. Their metrics range from average growth in number of small businesses to investor access to labor costs.

So, where are the 10 best small cities to start a business? Look no further than the state of Utah, which has five different cities rank among the top.

10 Best Small Cities to Start a Business

  1. Washington, UT
  2. St. George, UT
  3. Cedar City, UT
  4. Bozeman, MT
  5. Logan, UT
  6. South Bradenton, FL
  7. Post Falls, ID
  8. Fort Myers, FL
  9. Lehi, UT
  10. Morrisville, NC

How did the state of Utah rank so well? “It could be thanks to Utah’s leading economy,” according to KTVX Salt Lake City. “U.S. News recently rated Utah as having the best economy nationwide, and the third-best state overall.”

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Why choose a small city to launch your business? here are the pros and cons, according to Lauren Smith, Visiting Assistant Professor of Management and Marketing – Susquehanna University:


  • Almost all costs will be lower (which may encourage greater entrepreneurial risk).
  • On average, employee retention rates are higher in small cities.
  • Less industry competition.
  • Community relationships tend to be tight knit.


  • While costs might be lower, resources might be more difficult to obtain
  • Depending on the industry, skilled employees may be difficult attract.
  • Customer market size will inevitably be smaller.

Eligible cities have a population of between 25,000 and 100,000 residents. “City” refers to city proper and excludes the surrounding metro area.

The SuN Takeaway

The ubiquitous utility of the internet means that you can launch your entrepreneurial dreams just about anywhere, regardless of startup costs. But if you happen to live in Utah or Florida, things might be just a little cheaper.

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