The Big Apple, perhaps, is the place to be if you’re an entrepreneur aspiring to scale your business. For the second straight year, New York City ranked No. 1 among the best cities for small business according to a 2018 Biz2Credit National Small Business Week study.
An online, small-business financing platform, Biz2Credit examined cities based on a weighted average that included annual revenue, credit score, and age of the business.The firm’s proprietary BizAnalyzer also scored factors in cash flow, debt-to-income ratio, taxes, and other information.
The study included about 30,000 businesses nationally with fewer than 250 employees and under $10 million in annual revenues operating for more than a year. All told, Biz2Credit ranked the Top 25 Cities for Small Business in 2018.
“New York is where small businesses are making the most money, and New York companies far outpaced businesses based in other areas in annual revenues,” stated Biz2Credit CEO Rohit Arora, one of the nation’s leading experts in small business finance, who oversaw the research.
“The city has a diverse economy, and the sectors it is strong in—finance, IT, travel and tourism, real estate and construction—are thriving.” Arora contends the growth of New York’s tech industry is buoying all the other industries, including fashion, food and beverage, and hospitality. And as one of the world’s great metropolises, NYC has long been a magnet for the best and brightest university grads from the U.S. and abroad.
Businesses in New York led the two key categories of financial metrics in the study to earn the top ranking this year. They included annual revenue, with small business owners in New York City ringing up average yearly revenue of just over $1 million. The city finished best based on Biz2Credit’s BizAnalyzer score, which looks at local economic factors that include the cost of doing business and tax rate.
“Immigrants from all over the globe continue to add vibrancy to New York’s economy,” said Arora, a native of India.
The Other “Best Cities for Small Business,” Miami and California Metro Also Rank High
Six metro areas in California made the Top 10 Best Cities for Small Business Growth: San Jose (No. 2), San Francisco (No. 4), Los Angeles (No. 5), Riverside-San Bernardino (No. 6), San Diego (No. 9), and Sacramento (No. 10). The Miami-Fort Lauderdale metro area ranked No. 3, Washington, D.C., landed No. 7, and Austin, Texas, finished No. 8 in Biz2Credit’s annual study in 2018.
“Miami is a gateway to Latin America,” Arora said. “Latinos have comprised more than half of the total U.S. population growth over the last 15 years, and immigrants continue to start businesses in southern Florida, where the real estate and construction industries are booming. Additionally, the cost of living in Miami is a bit less expensive than in New York or Northern California.
“Technology companies in California are thriving, and the high tide floats all the boats,” Arora explained. “Industries related to the IT sector throughout California are doing well. The excellent higher education system in the state means skilled workers are available.”