4 Reasons Small Cities Are Better for Business


A recent study by MoneyRates.com found that smaller cities have a lot to offer young entrepreneurs who launch their startups outside of major hubs like San Francisco, New York and Chicago. That’s because big cities are more likely to take entrepreneurship for granted while smaller cities typically offer incentives that make life as an entrepreneur easier and more attractive.

Although Texas, Florida, North Carolina, Colorado and South Dakota rank the highest on MoneyRates’ list, there are plenty of other states that welcome entrepreneurs. Take Overland Park in Kansas,where politicians are working to attract tech entrepreneurs. In 2015 they initiated LaunchKC, a global grants competition formed to bring the best and brightest to the city to build their new businesses.

Related: The 25 Best Cities For Entrepreneurs — and How You Can Make the Most of Yours

In Tulsa, Okla., where ConsumerAffairs is headquartered, there are amazing resources like venture assistance programs, angel investing groups and pitch competitions. The presence of nearby universities, including Oklahoma State University-Tulsa, Tulsa Community College, Oral Roberts University and the University of Tulsa, doesn’t hurt either. With nearly 50,000 students enrolled in colleges and universities in the Tulsa metro area, our city has an energetic and educated population, as well as plenty of skilled labor to recruit and hire.

Building a tech startup in a small but thriving city like Tulsa has provided some great advantages and has certainly had an impact on the company’s early and continued success. Let’s look at four core reasons why relocating to a smaller hub may be better for your business.

1. Bigger incentives and perks.

The broader economic environment of a town makes a big difference in the success of a startup and whether entrepreneurs even try to launch in the first place. As a result, a supportive environment is key. Because state taxes can create a barrier to profitability for businesses, entrepreneurs are better off in cities with relatively low state business tax burdens.

In most states, corporations are subject to a corporate income tax, while income from S Corporations, Limited Liability Companies (LLCs), partnerships and sole proprietorships are subject to a state’s tax on personal income. Regardless of the amount of income, corporate rates generally range from 4-9 percent, and personal rates range from zero percent for small amounts of taxable income to 9 percent or more in some states.

In Oklahoma, I not only have the benefit of tax breaks but also promotional and recruiting assistance. In 2016, an entrepreneurial resource center called 36 Degrees North opened in Tulsa’s growing Brady Arts District, with financial assistance from the George Kaiser Family Foundation. With its seven conference rooms, 48 desks for rent and 10 private offices, the 11,500-square-foot space serves as a central gathering place for aspiring entrepreneursand is a testament to the growing entrepreneurial movement here in Tulsa.

Related: Industries Driving the Top 10 Small Cities for Business Owners

2. Fresh ground for development.

As an entrepreneur, you naturally become part of the fabric of development in smaller cities that are trying to expand on existing businesses, to attract new businesses and to develop a startup environment. Being located in a smaller city gives you the opportunity to be a pioneer in the area of development, which can help you forge closer partnerships with other local business owners and remain at the forefront of your community’s development.  For instance, we created an Entrepreneur Organization in Tulsa. EO is an international organization, but we only launched a Tulsa chapter this year.

Taking part in building the Tulsa business community has helped me network with other local business owners and have a say in the direction the city takes. I would be hard pressed to find a similar opportunity in a larger city.

3. Little to no commute.

Smaller cities are a win-win for both the employer and the employee. Most have a commute time that’s almost non-existent, plentiful housing options and a much, much lower cost of living than their big city counterparts.

With a cost of living rating of 84.60, Tulsa is cheaper than the U.S. average of 100. For comparison, the cost of living rating in San Francisco is 242 compared to 168 for New York and 106.50 for Austin. In addition to the higher cost of living, workers face a lengthy commute on a daily basis in New York, Los Angeles and San Francisco, where traffic adds 10-15 hours of transit time a week to get to and from the office. The maximum commute time to our office is 30 minutes, which leads to happier employees because they have more free time to spend with their families or friends.

With our location in Tulsa, I can offer workers a better work-life balance, which makes for overall happier and more productive employees.

Related: Forget Silicon Valley: Build Your Business in the ‘Burbs

4. Higher talent retention rates.

The advantage of a big city is its growing population, which creates consumer demand and economic opportunity for young people. Although there’s an inordinate amount of young talent in big cities, there co-exists the risk that they will be poached by a bigger company like Google, Microsoft or Facebook. I don’t have to worry about that as much because there aren’t as many tech companies based in Tulsa who are in a position to hook my employees. As a result, vacancies are rare. ConsumerAffairs reports an annual employee retention rate of 98 percent. Staffers at ConsumerAffairs earn an equivalent salary to those based in the Bay Area who are in comparable positions but without the big city hassles of being based in San Francisco.

Our local talent pool might be smaller, but we’re still selective. We employ high-performing individuals who don’t have to be micromanaged. Like Netflix and other hot startups, ConsumerAffairs rewards its salaried employees with unlimited vacation and freedom to work flexible hours as long as they are performing at or above our expectations.

Going against the grain and launching your business outside of Silicon Valley, or any other major city, can have a number of benefits for a young startup. Entrepreneurs who go this route may find their company has more of a chance to thrive instead of getting lost in the highly competitive climate of bigger cities.

Let’s block ads! (Why?)

Entrepreneur: Startup

Get Free Email Updates!

Signup now and get my free business content, resources and goodies every month.

I will never give away, trade or sell your email address. You can unsubscribe at any time.


  1. I and also my pals have been checking the good helpful tips located on your web page and at once developed a horrible feeling I never thanked the web blog owner for those tips. My guys happened to be absolutely stimulated to read through them and now have undoubtedly been loving them. Appreciate your indeed being well kind and then for deciding on varieties of very good areas millions of individuals are really wanting to know about. Our own sincere apologies for not saying thanks to sooner.

    • Hi there Longchamp your more than welcome also keep up the great work so much so we’ve decided to give you a shout out have a great day.

  2. Can I just say what a relief to find a person who basically knows what theyre talking about on the internet. You absolutely know how you can bring an concern to light and make it critical. Far more individuals really need to read this and recognize this side of the story. I cant believe youre not more popular because you absolutely have the gift.

  3. I precisely desired to say thanks once more. I am not sure the things that I might have achieved without these opinions shown by you about such a area of interest. It absolutely was an absolute scary problem for me, but coming across a new skilled tactic you processed the issue took me to leap with happiness. I’m happier for your support and in addition hope you are aware of an amazing job that you are doing teaching the rest using your web blog. Probably you’ve never come across any of us.

  4. I and my buddies were actually reading the excellent tricks from the blog while quickly developed a horrible suspicion I had not expressed respect to the site owner for those strategies. Most of the guys became certainly warmed to read them and have in effect in reality been having fun with those things. Appreciation for being considerably considerate and also for utilizing this form of outstanding topics millions of individuals are really wanting to learn about. My personal honest regret for not expressing appreciation to you earlier.

  5. I happen to be commenting to let you know of the beneficial discovery our princess gained visiting your web site. She discovered such a lot of details, including what it is like to have a marvelous helping nature to get folks easily completely grasp certain tortuous issues. You undoubtedly did more than visitors’ desires. Thank you for presenting those important, healthy, revealing and even easy thoughts on this topic to Emily.

  6. Thank you a lot for providing individuals with an extremely special possiblity to discover important secrets from this web site. It can be so superb and also jam-packed with a lot of fun for me and my office colleagues to search your web site a minimum of 3 times in one week to read through the new tips you have got. And of course, I’m just usually happy with the mind-boggling concepts you give. Some 4 tips in this post are without a doubt the most efficient we have all ever had.

  7. I just wanted to write down a brief word in order to thank you for these superb instructions you are writing on this website. My long internet look up has at the end of the day been paid with good quality facts and techniques to exchange with my co-workers. I ‘d repeat that most of us website visitors actually are very fortunate to be in a fine website with many awesome people with very beneficial solutions. I feel quite blessed to have encountered the site and look forward to plenty of more fun moments reading here. Thanks once again for all the details.

  8. My husband and i were quite peaceful when John managed to complete his researching via the precious recommendations he was given from your very own web page. It’s not at all simplistic just to be freely giving facts that other people have been selling. And we grasp we’ve got the website owner to thank because of that. Most of the explanations you’ve made, the straightforward site navigation, the relationships you will assist to promote – it’s all fantastic, and it’s facilitating our son in addition to the family believe that the article is satisfying, and that’s truly indispensable. Thanks for the whole thing!

  9. Thank you a lot for giving everyone an exceptionally spectacular chance to read in detail from this website. It is often very ideal and as well , jam-packed with a lot of fun for me and my office mates to visit the blog at a minimum 3 times weekly to see the newest tips you have got. Not to mention, I’m just always impressed with your splendid tactics you serve. Certain two points in this article are unquestionably the finest we have all had.

  10. I must express my thanks to the writer just for rescuing me from this type of instance. Because of browsing throughout the internet and meeting solutions that were not pleasant, I was thinking my life was gone. Existing minus the answers to the difficulties you have resolved by means of your entire post is a crucial case, and the kind which could have badly affected my entire career if I had not come across your site. Your own personal expertise and kindness in dealing with all areas was useful. I don’t know what I would’ve done if I hadn’t come across such a point like this. It’s possible to at this moment look ahead to my future. Thanks so much for the specialized and result oriented help. I won’t think twice to refer the sites to any individual who needs and wants direction about this subject.

  11. I would like to show appreciation to this writer just for bailing me out of this situation. Just after surfing through the world-wide-web and finding techniques which are not productive, I figured my life was over. Being alive minus the solutions to the issues you’ve sorted out all through your main write-up is a crucial case, as well as those that could have adversely damaged my entire career if I had not discovered your web blog. Your personal capability and kindness in taking care of all the pieces was very useful. I am not sure what I would have done if I had not come upon such a stuff like this. I am able to at this point look forward to my future. Thanks a lot so much for this skilled and result oriented help. I will not think twice to propose your web sites to anyone who will need tips about this subject.


Please enter your comment!
Please enter your name here