That is the finding from a report by Lending Tree. The lending marketplace analyzed nine metro- and state-based metrics — ranging from the proportion of self-employed residents to unemployment rates to one-year business survival rates — across the 100 largest metros in America based on population.
The report comes as COVID-19 has forced many small business owners — including Black American entrepreneurs – to find new ways to operate. Healthcare costs and consumer spending have been cited among the biggest challenges this year for those firms. Yet with 2022 approaching, observers hope some of those obstacles will diminish. If that occurs, it could provide fuel new small business start ups.
“It’s definitely a challenging time to start a small business, but that doesn’t mean that you shouldn’t do it,” says Matt Schulz, LendingTree chief credit analyst. “There are always going to be things that you can’t predict. The truth, however, is that if you have a good idea, a thoughtful plan, adequate funding and a willingness to take the risk and put in the work, any time can be a good time to get started.”
Location has long been a key factor budding entrepreneurs need to consider before launching a successful new enterprise. Here are some of the top findings from Learning Tree:
- North Carolina has the best places to start a small business. In fact, Raleigh at No.1, Charlotte at No. 3 and Durham (No. 4) were ranked best as places for small businesses to start. Nearly 55% of Raleigh’s population is in their prime working years between ages 25 and 54.
- California was the worst place to start a small business, Three of the Golden State metros — Bakersfield, Stockton and Fresno, — take the lowest spots, while Riverside places in the bottom 10. Bakersfield was the worst of all metros. It has the highest unemployment rate — 10.7% — among the 100 metros. It also has the lowest percentage of residents with at least a bachelor’s degree — 17.1% — among the metros.
- The South commands the top 10 places to start a small business. The South has five metros in the top 10, while Western and Midwestern states occupy the other five slots.
- The West rules the bottom 10 places to start a small business. Honolulu joins the four California metros in the bottom 10, while Midwestern and Northeastern states take the other five spots. In terms of Metro areas, the top five spots respectively were Raleigh, North Carolina, Austin, Texas, Charlotte, N.C. , Durham, N.C., and Boise, Idaho.