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Choosing the most advantageous location for your startup

Posted by Tasnim Ahmed

April 29, 2022

The pandemic has been rough for businesses across the globe, with some having shuttered and others still barely eking by. But entrepreneurs and business owners have always had it tough — as many as 20% of new businesses fail in their first year, and a whopping 45% fail within their first five years, according to Bureau of Labor Statistics cited by Real Estate Witch.

Compounding these grim statistics is the fact that your venture needs a base location from which it can grow, but selecting one comes with its own set of challenges. Characteristics such as tax rates, talent pool, cost of living, access of capital and networking opportunities factor heavily into what makes a city startup-friendly.

Silicon Valley has long been the hot spot for entrepreneurs, but other startup ecosystems are sprouting up and holding their own in cities around the U.S. These new startup hubs include:

• Atlanta, Georgia.
• Denver, Colorado.
• Jacksonville, Florida.
• Kansas City, Missouri.
• Las Vegas, Nevada.
• Miami, Florida.
• Orlando, Florida.
• Phoenix, Arizona.
• Salt Lake City, Utah.
• Tampa Bay, Florida.

You may wonder what these far-flung cities have in common. A deeper look shows they share key factors that make them a breeding ground for entrepreneurship and an attractive spot for new businesses to set up shop. 

For example, Florida is home to four startup hot spot cities. The state’s absence of an income tax and its exceptionally low costs to set up a new business — coupled with some of the lowest corporate tax rates in the U.S. — make it always sunny for investors. Miami has one of the fastest-growing startup scenes in the country, with over 14,000 new business applications for every 100,000 residents. 

So, what exactly are the conditions that make for an advantageous startup location? The most compelling ones to consider are broken down below.

Entrepreneurial spirit

Just as the phrase suggests, entrepreneurship begets more entrepreneurship, as like-minded individuals flock together. Cities with an entrepreneurial spirit offer a veritable treasure trove for startups, with access to established networks, support groups, co-working spaces, peer groups and startup accelerator programs.

Workforce composition

Chances are you will find more media-related people in cities like Los Angeles and New York than Albuquerque, New Mexico. If you need a pool of high-tech professionals, you might look to Salt Lake City, and if you want to tap into one of the country’s best-educated workforces, you may look to Denver

The bottom line is you want to set up your business at a location where you can find the requisite talent. And most professionals flock to places where they can find employers of a corresponding nature. Not only does it give them an option pool, but it also makes them stay in their game by putting them in the center of the action, and the same principle works for businesses.

Research and education

Whatever venture you have planned will more than likely benefit from proximity to higher education. Universities and research centers serve as sources to attract and recruit talent. As the business progresses, the need for educated staff and interns will grow. Being a part of this ecosystem ensures you don't run into a dry spell in hiring.


You may have a great idea, but no access to funding. If you do get funds, however, the source typically wants you nearby. This is so they can stay abreast of your plans and protect their investment. But this also has a silver lining. Where there is one investor, chances are there are others, which opens more avenues.


Until your company starts churning a profit, chances are you will be burning through some of the cash garnered through funding. It makes good economic sense to locate where the burn rate for your company is on the down side. Cheaper infrastructure, an affordable cost of living, lower tax rates and inexpensive costs to incorporate can go a long way in getting your business off the ground and sustainable more quickly. 


For new business owners, every city will have its own set of advantages and disadvantages. That said, entrepreneurs who do not have access to expert counsel in researching where to locate are more likely to flounder. Due diligence is required before you decide, as this will help determine whether your idea becomes a viable business.


Tasnim Ahmed
Tasnim Ahmed

Tasnim Ahmed is a content writer at Escalon Business Services who enjoys writing on a multitude of subjects that include finops, peopleops, risk management, entrepreneurship, VC and startup culture. Based in Delhi NCR, she previously contributed to ANI, Qatar Tribune, Marhaba, Havas Worldwide, and curated content for top-notch brands in the PR sphere. On weekends, she loves to explore the city on a motorcycle and binge watch new OTT releases with a plateful of piping hot dumplings!

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