Best U.S. Cities for Small Business

Whether you’re a long-time entrepreneur or just beginning the journey, we know you want to start your ventures in the best place possible.

The B2B Reviews team has previously examined the best states for starting a business. Now, we’re taking a closer look at the nation’s most populous cities to determine which ones are best suited for small businesses.

To determine which U.S. cities are best in 2025, we identified some of the most populous cities in all 50 states and compared them across five key metrics important to business growth and survival.

For a more in-depth look into how we determined our top 20 cities, take a look at our methodology.

Top 20 U.S. Cities for Small Business in 2025

Explore the top twenty best cities in the United States for small businesses in 2025 in more depth.

1. Sioux Falls, South Dakota

Located near the southeastern border of the Mount Rushmore State, Sioux Falls takes the top stop on our list. The city has the lowest unemployment rate, at 1.5%, and 25.24% of small businesses in South Dakota are in Sioux Falls, making it a great place for small businesses.

• City population as a percentage of the state: 23.28%
• City GDP as a percentage of the state GDP: 0.041%
• City unemployment rate: 1.5
• Percentage of small businesses in county: 25.24%
• Mean hourly wage: $27.02

2. Overland Park, Kansas

Overland Park, Kansas, ranks second with one of the smaller mean hourly wages and the second-highest percentage of the Kansas population, at 6.71%. Located not far from Kansas City, Overland has the perks of the city while having its own charm that business owners are sure to love.

• City population as a percentage of the state: 6.71%
• City GDP as a percentage of the state GDP: 0.081%
• City unemployment rate: 3.3
• Percentage of small businesses in county: 29.03%
• Mean hourly wage: $20.99

3. Urban Honolulu, Hawaii

Urban Honolulu, Hawaii, ranks third overall. However, it ranks fifth for city population, with 23.49% of the Hawaiian population living in Urban Honolulu. It also has some of the highest percentage of small businesses in the state, at 70.41%, making it a good place for entrepreneurs.

• City population as a percentage of the state: 23.49%
• City GDP as a percentage of the state GDP: 0.074%
• City unemployment rate: 2.9
• Percentage of small businesses in county: 70.41%
• Mean hourly wage: $32.29

4. Oklahoma City, Oklahoma

Oklahoma City (OKC) comes in fourth place. It has one of the lowest unemployment rates, at 2.8, and is the biggest city in the state, with 17.75% of the population living there. With a large consumer base and a healthy percentage of small businesses, business owners will find OKC a great place to start their companies.

• City population as a percentage of the state: 17.75%
• City GDP as a percentage of the state GDP: 0.039%
• City unemployment rate: 2.8
• Percentage of small businesses in county: 26.40%
• Mean hourly wage: $27.25

5. West Valley City, Utah

West Valley City, Utah, takes fifth place on our list. Although it has only 4.11% of the state’s population, it has 42.27% of all small businesses in Utah and a lower unemployment rate of 3.1. With a steady presence of businesses, West Valley City is an excellent place for business owners to consider.

• City population as a percentage of the state: 4.11%
• City GDP as a percentage of the state GDP: 0.052%
• City unemployment rate: 3.1
• Percentage of small businesses in county: 42.27%
• Mean hourly wage: $21.69

6. Omaha, Nebraska

Omaha ranks sixth overall but fourth for city population, with 24.64% of the state’s population living there. Additionally, 33.26% of Nebraska small businesses are in Omaha. Entrepreneurs looking to start a business in Nebraska may find Omaha a great location.

• City population as a percentage of the state: 24.64%
• City GDP as a percentage of the state GDP: 0.051%
• City unemployment rate: 2.9
• Percentage of small businesses in county: 33.26%
• Mean hourly wage: $29.34

7. West Jordan, Utah

West Jordan, Utah, earns seventh place for its high percentage of small businesses, at 42.27%, and its more affordable mean hourly wage of $22.17. Not too far from Salt Lake City, it offers the benefits of the big city without big-city costs, making it a smart location for business owners.

• City population as a percentage of the state: 3.51%
• City GDP as a percentage of the state GDP: 0.052%
• City unemployment rate: 3.1
• Percentage of small businesses in county: 42.27%
• Mean hourly wage: $22.17

8. Olathe, Kansas

Olathe, Kansas, ranks eighth on our list for its 0.081% GDP and larger percentage of small businesses, at 29.03%. Known for its history, parks, and shopping centers, Olathe is a good city for Kansas entrepreneurs to consider.

• City population as a percentage of the state: 14.82
• City GDP as a percentage of the state GDP: 18.78
• City unemployment rate: 12.25
• Percentage of small businesses in county: 14.82
• Mean hourly wage: 14.82

9. West Fargo, North Dakota

The city of West Fargo comes in ninth on our list, earning its place with its low unemployment rate of 2.1 and a healthy percentage of small businesses at 28.08%. North Dakota business owners will find West Fargo a good option for their companies.

• City population as a percentage of the state: 5.19%
• City GDP as a percentage of the state GDP: 0.027%
• City unemployment rate: 2.1
• Percentage of small businesses in county: 28.08%
• Mean hourly wage: $24.51

10. Fargo, North Dakota

Coming in close behind its neighboring city is Fargo, North Dakota. Fargo shares an unemployment rate and percentage of businesses with West Fargo, but it scores tenth for its higher mean hourly wage of $28.54. However, Fargo still makes for a great business location.

• City population as a percentage of the state: 17.10%
• City GDP as a percentage of the state GDP: 0.027%
• City unemployment rate: 2.1
• Percentage of small businesses in county: 28.08%
• Mean hourly wage: $28.54

11. Phoenix, Arizona

Phoenix, Arizona, takes eleventh place with its high percentage of the state population, at 23.07%. Its GDP is among the top at 0.076%, and it has a large share of the state’s small businesses at 76.72%. Entrepreneurs looking to start a business in Arizona should consider Phoenix.

• City population as a percentage of the state:23.07%
• City GDP as a percentage of the state GDP: 0.076%
• City unemployment rate: 3.5
• Percentage of small businesses in county: 76.72%
• Mean hourly wage: $31.20

12. Glendale, Arizona

Glendale takes the twelfth spot on our list for its high GDP of 0.076% and a more affordable mean hourly wage of $26.67. If Phoenix is too busy, entrepreneurs can consider starting their business in Glendale.

• City population as a percentage of the state: 3.55%
• City GDP as a percentage of the state GDP: 0.076%
• City unemployment rate: 3.5
• Percentage of small businesses in county: 76.72%
• Mean hourly wage: $26.67

13. Tulsa, Oklahoma

Tulsa, Oklahoma, comes in thirteenth place. As the second largest city in Oklahoma, Tulsa’s business environment has been growing and currently has 21.31% of all OK small businesses. Additionally, the average mean hourly wage is fairly affordable for small businesses at $26.66, making it a great place for entrepreneurs.

• City population as a percentage of the state: 10.40%
• City GDP as a percentage of the state GDP: 0.026%
• City unemployment rate: 3.0
• Percentage of small businesses in county: 21.31%
• Mean hourly wage: $26.66

14. Meridian, Idaho

Meridian, Idaho, is the second largest city in Idaho, with 7.33% of the state’s population and 34.71% of Idaha small businesses. With an unemployment rate of 3.6, the city is a good location for small business owners to consider starting a company.

• City population as a percentage of the state: 7.33%
• City GDP as a percentage of the state GDP: 0.046%
• City unemployment rate: 3.6
• Percentage of small businesses in county: 34.71%
• Mean hourly wage: $26.00

15. Cranston, Rhode Island

Cranston, Rhode Island, ranks fifteenth for its high GDP (0.144%) and a large percentage of small businesses (66.61%). The New England state not only offers coastal access, but it is also a great place for entrepreneurs to consider starting a business.

• City population as a percentage of the state: 7.53%
• City GDP as a percentage of the state GDP: 0.144%
• City unemployment rate: 4.4
• Percentage of small businesses in county: 66.61%
• Mean hourly wage: $25.51

16. Minneapolis, Minnesota

Minneapolis, Minnesota, comes in sixteenth for its low unemployment rate of 2.9 and its higher share of small businesses, at 29.74%. As the largest city in Minnesota, Minneapolis is sure to offer entrepreneurs a great environment for small businesses.

• City population as a percentage of the state: 7.45%
• City GDP as a percentage of the state GDP: 0.073%
• City unemployment rate: 2.9
• Percentage of small businesses in county: 29.74%
• Mean hourly wage: $33.80

17. Chandler, Arizona

While Chandler, Arizona, ranks seventeenth overall, it ranks fourth for the percentage of small businesses, at 76.72%. Also, with a GDP of 0.076%, Chandler is a good city for Arizona entrepreneurs to start their businesses.

• City population as a percentage of the state: 3.92%%
• City GDP as a percentage of the state GDP: 0.076%
• City unemployment rate: 3.5
• Percentage of small businesses in county: 76.72%
• Mean hourly wage: $27.39

18. Pawtucket, Rhode Island

Pawtucket, Rhode Island, is eighteenth on our list for its GDP of 0.144% and percentage of small businesses, at 66.61%. For entrepreneurs interested in setting up a business close to the main city (Providence) but not in it, Pawtucket is a great place to consider.

• City population as a percentage of the state: 6.86%
• City GDP as a percentage of the state GDP: 0.144%
• City unemployment rate: 4.4
• Percentage of small businesses in county: 66.61%
• Mean hourly wage: $25.27

19. Wilmington, Delaware

Wilmington, Delaware, comes in nineteenth place. It has the highest percentage of GDP of any city on our list, at 0.569%. Additionally, with 69.47% of Delaware small businesses being located in Wilmington, the city is a great place for business owners to consider.

• City population as a percentage of the state: 7.24%
• City GDP as a percentage of the state GDP: 0.569%
• City unemployment rate: 3.5
• Percentage of small businesses in county: 69.47%
• Mean hourly wage: $32.64

20. Burlington, Vermont

Rounding out our list is Burlington, Vermont. It ranks twentieth for its low unemployment rate of 2.1 and a large percentage of small businesses, at 28.74%. For business owners looking to start a business in the New England state of Vermont, Burlington stands out as a good option.

• City population as a percentage of the state: 6.92%
• City GDP as a percentage of the state GDP: 0.043%
• City unemployment rate: 2.1
• Percentage of small businesses in county: 28.74%
• Mean hourly wage: $32.14

Methodology

To find the best U.S. cities for small businesses, B2B Reviews gathered a list of the most populous cities in all fifty states, based on data from the United States Census Bureau.

We then compared the 235 cities across five key metrics, each city earning a score based on a weighted value. Once compiled, all cities received a final weighted score and were ranked accordingly.

Percentage of State Population—Total 20 Points

Using data from the Census Bureau, we calculated the percentage of each city's population compared to the state’s population. Cities with a larger percentage of the state’s population earned a higher score.

Percentage of State GDP—Total 20 Points

Using data from the Bureau of Economic Analysis, we gathered the gross domestic product (GDP) of each city. Then, using data from the Federal Reserve Bank, we found the state’s GDP, and we calculated the percentage of the state’s GDP each city created. States with a larger percentage ranked higher.

Unemployment Rate—Total 20 Points

Using data from the Bureau of Labor Statistics, we determined the unemployment rate for each city. Cities with lower unemployment rates scored better.

Percentage of Small Businesses Per County—Total 25 Points

We found the number of employer and non-employer firms in each county where the city was located, using the most recent data from the Census Bureau. Taking the combined total, we compared the number of small businesses in each county to the total number of businesses in the state and calculated the percentage. Counties with a higher percentage scored better.

Mean Hourly Wage—Total 15 Points

We determined the mean hourly wage for each city by looking at its metropolitan area. Cities with a lower mean hourly wage scored better, as this is more affordable for small business owners.

The Bottom Line

If you’re an entrepreneur looking to start or grow a business, choosing the right city can make all the difference. Whether you value low unemployment, a strong small business presence, or an affordable labor market, the cities on our list offer promising prospects.

Consider the following factors to ensure the location is the best environment for your business:

• Low Unemployment Rate: Lower unemployment usually means a stable economy, which increases your chance of finding qualified workers and reliable customers.
• Strong Small Business Presence: Cities with a high percentage of small businesses usually mean there’s a thriving entrepreneurial ecosystem.
• Affordable Labor Market: In cities with a reasonable mean hourly wage, small businesses can keep labor costs manageable while remaining competitive and sustainable.
• Economic Contribution (GDP Share): Generally, cities that contribute more to their state’s GDP may provide greater access to business-friends policies, investment opportunities, and financial incentives.
• Population Density & Growth: A growing population means more potential customers and increased demand for products and services.

If any city on this list looks interesting to you, the next steps you should take are researching local resources, networking opportunities, and finding options. It’s important to select the right environment for your business, as it can turn your vision into reality.

Fair Use Statement

If our findings interest you, feel free to share the data story with others; however, please provide a link back to this article so readers can access our full methodology.

Best Cities by State

• North Carolina