St. George, Fort Myers, and 3 other small U.S. cities are the best for startups in 2026 |
St. George, Fort Myers, and 3 other small U.S. cities are the best for startups in 2026
Small cities give entrepreneurs lower costs and less competition. WalletHub ranked 1,334 of them to find where new businesses thrive
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A founder who relocates from San Francisco to a city of 60,000 people trades competitive pressures for far more favorable conditions. Overhead drops. Customers are reachable. The local market rewards consistency over spectacle. Entrepreneurs who have made that kind of shift often describe the move as what let their company gain traction for the first time, ending years of cash-burning in a crowded metropolitan environment where every cost was punishing, and every competitor was better capitalized.
The choice of city shapes a business's odds from day one. Cheap office space extends a startup's runway. A fast-growing workforce provides the labor pool a scaling company needs. Access to investors determines whether a promising idea survives its first funding gap. These variables do not distribute evenly across American cities, and small cities — with populations between 25,000 and 100,000 — show striking variation. Some concentrate remarkable entrepreneurial energy. Others sap it through high costs, thin labor markets, or limited capital. The gap between the best and worst small cities in these conditions is wider than most founders realize.
WalletHub evaluated 1,334 small U.S. cities on their conditions for starting a business and ranked each city across three dimensions: Business Environment, Access to Resources, and Business Costs. It used 18 metrics, including small-business growth rates, startups per capita, investor access, office-space affordability, labor costs, corporate taxes, and cost of living. WalletHub graded each metric on a 100-point scale, where 100 represented the most favorable conditions for launching a business, then weighted and combined the results into an overall score. Business Environment carried 50 of the total 100 points, while Access to Resources and Business Costs were each worth 25.
The five cities below earned the highest overall marks.
1. St. George thrives on cheap space and surging firms
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St. George, Utah, earned the top overall score of 64.62. Office space costs around $10.73 per square foot. The most expensive city in WalletHub's study charges close to $62 per square foot, so the separation is enormous, not a modest advantage. For an early-stage company negotiating its first lease, the difference can determine whether a business reaches profitability before it exhausts its capital. A founder in St. George captures, in overhead savings alone, a structural edge that competitors in pricier markets must compensate for through higher revenue or outside funding.
The city's Business Environment rank of second overall reflects more than cheap square footage. Between 2017 and 2023, the number of small businesses in St. George grew by nearly 42%. Growth at that pace........