As we look ahead to the decade to come in small business development, it’s easy to believe that a lot of things are going to change. The coronavirus pandemic has changed how we think about business in general, and already many are successfully adapting to new circumstances. Indeed, one need only read through our ‘Quarantine Inspiration’ post on six women who became millionaires working at home to get a sense of how some people are now plotting out their ambitions. There’s a sense that work is now a remote, independent concept, and that the best career options may stem from creativity at home.
That may well be the case. In fact it almost certainly will be in some cases. But it can also be easy to get carried away with the idea that on-location businesses won’t return (and return in full force). Eventually the coronavirus will be behind us, and at that time it’s quite likely that we’ll see something of a startup boom. And one interesting question is where exactly that boom will be concentrated.
There’s no telling for sure given how much can change from one year to the next. As far as we can tell now though, these are our educated guesses as to what some of the best cities for small business innovation in the 2020s might be….
Seattle, Washington
This is not a surprising selection. Seattle consistently ranks as one of the most appealing cities for new businesses, and in fact took the top spot in Entrepreneur’s rankings of startup cities as of 2020 specifically. Best known as something of a Silicon Valley-adjacent tech hub, Seattle is building on years of buzz as an appealing place for new business operators. And there’s nothing to suggest it will be slowed down anytime soon.
There are numerous conditions that originally helped to spark the culture of innovation in Seattle (and increasingly the rest of Washington). At this point though, what we’re seeing is more of a reputation factor. The Entrepreneur rankings just mentioned noted that more than 95% of Seattle’s businesses employ fewer than 250 people, and 70% earn less than $1 million in yearly revenue. What this means is that there are tons of small companies in the cities that are successful, but which aren’t so big as to be hard to relate to. This appears to continually inspire further innovation.
Raleigh, North Carolina
Moving on from an unsurprising first pick, we’ll mention Raleigh, North Carolina, which may be somewhat more unexpected. However, Raleigh (and North Carolina’s broader “Triangle” region) has been somewhat quietly on the rise for some time now. People who have their eye on this mid-size state capital tend to recognize a few large local companies (like Citrix), as well as the fact that the Triangle is a very busy place for research and medical business. But the truth about why Raleigh belongs on this list is simpler: It’s busy but affordable at the same time, and that’s an increasingly rare combination.
To that point, a Quartz write-up on Raleigh referred to it as the nation’s only leading tech hub in which the cost of living is below the national average. We’re betting that might change over the course of the decade, but the general circumstances will still be favorable for small businesses. Raleigh is unusually affordable for the level of growth and innovation it’s seeing, and this should only lead to more emerging businesses.
Nashville, Tennessee
Though it’s bigger than Raleigh is, Nashville, Tennessee has a similar feel to it. It’s a mid-sized but growing city in another southern state (Tennessee being culturally somewhat more southern than much of North Carolina), and it’s a place that seems to perpetually be “on the rise.” Another similarity is that though Nashville is largely known for other things (such as its restaurant and bar scene and its status as one of the true music capitals of the country), it has a somewhat subtly thriving tech scene.
In addition to the tech scene though, Nashville makes our list because of the fact that Tennessee makes things easy on new business owners. For starters, such owners are essentially welcomed into business by a state government website that guides them through the formalities in setting up a business, the way few if any other states do. A guide by ZenBusiness outlines how to set up a LLC in Tennessee, documenting that the Secretary of State provides a “SmartStart” platform. This serves as a “digital canvas” helping entrepreneurs to visualize and set up their companies, and get connected with mentors and resources around the state. This sort of tool signals Tennessee’s open encouragement of new small businesses, and it’s a fair assumption that if the state is successful in attracting more such companies in the coming years, the bulk of them will be headed to Nashville.
Madison, Wisconsin
For the last city on our list we’re borrowing a selection from CNBC’s look at “untapped” startup hubs — which ranked Madison, Wisconsin in the top slot. The article pointed to some other interesting cities as well, such as Cincinnati, Scottsdale, and even Durham (a close neighbor of Raleigh’s). But Madison was given the top spot for its modest size and its combination of “large educated workforce” and affordability.
Those factors certainly make for good indicators of where startups can thrive, even if it’s not entirely clear yet that Madison is a small business hub in the way it’s clear with our other selections. That is to say, there may not be a thriving tech scene in Madison just yet like we see in Raleigh and Nashville; Wisconsin may not have welcoming tools to help new business owners find resources like we see in Tennessee; and this city certainly doesn’t have Seattle’s reputation for innovation. But a pure look at the dynamics of the city make it an interesting prediction as a place that could soon emerge as an innovation hot spot.
We’ll undoubtedly see many more cities than these four showcase themselves as busy startup locations over the course of the 2020s. Look to Seattle, Raleigh, Nashville, and Madison to be among the most exciting cities we continue to read about as the decade progresses though.
