The Best, Best Places to Start a Small Business

There probably is no town with the low rents, good schools, loose regulations, good infrastructure, moderate taxes, strong markets and a skilled labor force that would make the ideal place to start a new business. But if perfection doesn't exist, there still are some places that are better than others. Like these three representing the best-of-the-best-of:

Austin, Texas. This is Kiplinger's pick for the best city for small business for the next decade. The personal finance magazine lauds the capital of the Lone Star State for its community business support programs, educational opportunities and homegrown venture capitalists. To those advantages, I'd add moderate costs, low taxes, and upwardly mobile can-do spirit. And Austin slipped through the last recession almost unscathed. I live in Austin, and my house is worth more than when I bought it in 2007. Not many cities can say that.

Sioux Falls, South Dakota. This state ranked ahead of all others on the Small Business Survival Index calculated by the Small Business & Entrepreneurship Council, an advocacy organization based outside Washington, D.C. With iconic anti-tax campaigner Grover Norquist on its board, it's no surprise that low taxes figure prominently in the index's algorithm. But Forbes, which arguably takes a more nuanced view, also ranked Sioux Falls its best small city for business.

Oklahoma City, Oklahoma. Back in 2009, Money ranked the best places to start a small business and OKC came out a surprising winner among large metro areas. The Money researchers liked the combination of low rents and low foreclosure rates in Oklahoma City, as well as the presence of investors who made their money in the oil patch and know how to take a gamble.

There's more to opportunity than most of these lists consider. For instance, one researcher found that the level of taxation is less important than the nature of government expenditures. Spending to improve public services like highways and education is better than so-called transfer payments, which include welfare as well as government subsidies to businesses.

So if your city isn't on one of these lists, you may not need to call the movers or abandon your entrepreneurial aspirations. Most people start businesses where they already live. While location is a consideration, it's not so much where you do, as what you do that determines how well you do.

Mark Henricks has reported on business, technology and other topics for The New York Times, The Wall Street Journal, Entrepreneur, and other leading publications long enough to lay somewhat legitimate claim to being The Article Authority. Follow him on Twitter @bizmyths.

Image courtesy of Flickr user EvelynGiggles, CC2.0