Entrepreneurship often thrives in places that offer the right mix of resources, support, and market opportunities. In regions with a strong or growing economy, businesses have the opportunity to connect with a broad customer base and recruit top-tier talent, amplifying their growth potential. Certain locales also nurture a more business-friendly environment through lower operating costs, including taxes, wages, and rent, and supportive legislation.
This year, traditional powerhouses such as New York City, San Francisco, and Boston did not feature among the top 20. While these cities have historically been known for their vibrant startup cultures, high tax rates and business operating costs may have deterred new ventures, particularly for San Francisco and Boston (which experienced an 11% and 13% drop in new business applications from 2021 to 2022, respectively). Instead, several mid-sized cities with fewer than 250,000 residents made the list. This trend underscores the notion that a sprawling metropolis isn’t a prerequisite for new business success. In fact, less populous cities offer their own unique advantages, such as lower costs and a tightly-knit community, which can be vital for businesses in their early stages.
To identify the top cities fostering new business growth in 2023, the data and research team at Swyft Filings turned to the most recent data from the United States Census Bureau, the Bureau of Economic Analysis (BEA), and other government sources. They evaluated the 300 most populous cities in the U.S. on key factors such as the rate of new business formations and business climate favorability.
Without further ado, here are the top 20 cities whose residents are the most likely to have brought their business ideas to life, and where the business environment is best positioned to foster long-term success.
