Where to go — and where not to go — if your want your business to succeed
You better hope your business goes south.
The majority of the cities with the most opportunity for business owners were located in the South, according to a new study on economic opportunity released Tuesday by Yelp. The study looked at predictors of past business closures — including number of reviews, how high or low reviews were and how often people visited the business page — to create a predictive model for business closures.
Cities in the south dominate the list for a variety of reasons, explains Yelp’s data science editor Carl Bialik. Among them: Lower rents and population migrations to the south. Indeed, real estate in the south can cost half of what it does in say, the northeast, and government data shows that “the 16 states and the District of Columbia that comprise the South saw an increase of almost 1.4 million people between 2014 and 2015” — the largest of any region, the Pew Research Center notes.
10 best cities for economic opportunity
- Charleston, SC
- Las Vegas
- Salt Lake City
The No. 1 city for business opportunity was Charlotte, which is also one of the top three cities in America that people are moving to. A CNBC survey of business owner optimism also ranks Charlotte as a great place to start a business.
On the flip side, a number of cities in the northeast and on the west coast have the lowest levels of economic opportunity. Bialik notes that often cities with higher rents make it “really tough to get started” when you’re an aspiring business owner, and harder to make money when it’s opened.
10 worst cities for economic opportunity
- Portland, ME
- San Francisco
- New York
- San Jose
This news come as many Americans — particularly younger ones — want to become entrepreneurs. Two-thirds of millennials say they want to start their own business, according to a survey from Bentley University.
Of course, there may be even more important factors than location — particularly with the rapid growth in e-commerce — in starting a new business. These include a unique product, plenty of funding and a solid marketing plan.
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