The best startup cities in America

  • Conducting Our Study

    In fast growing America we wanted to know the most entrepreneurial cities to start a business.

    We looked at three details:

    1. the concentration of self-employment by industry

    2. U.S. states with the lowest concentration of self-employment

    3. small and midsized metros with the highest concentration of self-employment

  • Key Study Findings

    Nationwide, there are close to 16 million self-employed individuals, representing around 10 percent of all workers. Interestingly, the median income for self-employed full-time individuals in the U.S. is only slightly higher than the median income for all workers—$50,000 vs. $48,000.

    Self-employed individuals are found in every industry, but out of all workers, they make up the largest share of workers in the Other Services, Except Public Administration and the Agricultural, Forestry, Fishing and Hunting, and Mining sectors. Other non-public administration services include service providers such as mechanics and hairdressers. The Construction industry also has a large percentage of workers that are self-employed, while Manufacturing has the lowest share.

SUMMARY

The idea of entrepreneurship typically brings to mind famous innovators like Jeff Bezos and Elon Musk, yet reality is, the majority of entrepreneurs operate small businesses or are self-employed. Often entrepreneurs build traditional businesses like restaurants and cafes, but oftentimes can be found making a living through less traditional means such as real estate or consulting.

Self-employed individuals enjoy many benefits–being your own boss while simultaneously managing the stress of long hours, payday uncertainty, or no clear path to success. With technological advancements in recent decades, we've now lowered the barrier to entry, and becoming an entrepreneur is easier than ever before! Thirty years ago, a marketing consultant would need to find clients through their existing network, word-of-mouth, or by running newspaper advertising, but today, they can easily connect with clients on platforms such as Upwork, Fiverr, LinkedIn, Instagram, Facebook, SnapChat and more.

In the last few years, the sharing economy has further transformed the way Americans begin and conduct their businesses. And previous barriers to getting started have been knocked down. The basic premise of the sharing economy is the exchange of goods or services via technology. Now with less upfront time and costs, aspiring entrepreneurs can easily test new ideas or spin a side hustle, by selling a product on Amazon, delivering for Grubhub, or starting a full-time business out of a local coworking space. The sharing economy has exploded in the last decade. Just 10 years ago, there were only a handful of sharing platforms, such as CouchSurfing, FreeCycle, and ZipCar while the sharing economy giants of today, like AirBnB and Uber, had only recently launched. According to research by PwC , key sharing economy sectors have the potential to increase global revenues from $15 billion in 2015 to $335 billion in 2025. Alongside rapid growth in the sharing economy, entirely new markets and services have emerged that didn’t exist 10 years ago—providing enticing opportunities for entrepreneurs. In the fast-growing food delivery market , technology platforms like Uber Eats and Grubhub have not only expanded delivery options to a broader range of existing restaurants, but also encouraged entirely new “virtual restaurants” to open in shared kitchen spaces. With reduced overhead, virtual restaurants are providing restaurateurs a far less risky and capital intensive model for testing and scaling new concepts. With so many new ways to start and scale a business, researchers at CloudCooks® wanted to see which cities in the U.S. have the most entrepreneurs. To find the most entrepreneurial cities, they analyzed U.S. Census Bureau data and calculated the percentage of all workers who are self-employed in either their own incorporated or unincorporated business. In addition, CloudCooks® calculated median incomes for self-employed individuals and all workers, as well as the most overrepresented industry for entrepreneurs in each metro. The most overrepresented industry represents a disproportionately high rate of entrepreneurs within the metro relative to the national level. Here’s what they found.

  • SELF-EMPLOYMENT CONCENTRATION BY INDUSTRY

    Just as self-employment varies by industry, it also varies by location. States with the largest share of self-employed individuals are geographically diverse; however, states in the Midwest generally have the lowest percentage of self-employed individuals.

  • LOWEST CONCENTRATION OF SELF-EMPLOYMENT WORKERS AMONG U.S. STATES (MIDWEST)

    At the metropolitan level, areas with the highest levels of self-employment are also spread out. However, similar to the state-level analysis, locations in the Midwest tend to have fewer self-employed individuals. To further refine the analysis, researchers grouped cities into the following cohorts based on population size:

    Small metros: 100,000 – 350,000
    Midsize metros: 350,000 – 1,000,000
    Large metros: more than 1,000,000

  • SMALL AND MIDSIZE METROS WITH THE HIGHEST CONCENTRATION OF SELF-EMPLOYED WORKERS

    15. New York-Newark-Jersey City, NY-NJ-PA

  • Percentage of workers that are self-employed: 10.5%
  • Number of people that are self-employed: 1,051,859
  • Most overrepresented industry for the self-employed: Other Services, Except Public Administration
  • Median total income for the full-time self-employed: $55,000
  • Median total income for all full-time employees: $58,000

    14. Orlando-Kissimmee-Sanford, FL

  • Percentage of workers that are self-employed: 10.6%
  • Number of people that are self-employed: 128,251
  • Most overrepresented industry for the self-employed: Agriculture, Forestry, Fishing and Hunting, and Mining
  • Median total income for the full-time self-employed: $40,000
  • Median total income for all full-time employees: $40,000

    13. Sacramento--Roseville--Arden-Arcade, CA

  • Percentage of workers that are self-employed: 10.7%
  • Number of people that are self-employed: 114,710
  • Most overrepresented industry for the self-employed: Other Services, Except Public Administration
  • Median total income for the full-time self-employed: $56,000
  • Median total income for all full-time employees: $52,000

    12. Nashville-Davidson--Murfreesboro--Franklin, TN

  • Percentage of workers that are self-employed: 10.8%
  • Number of people that are self-employed: 115,086
  • Most overrepresented industry for the self-employed: Information
  • Median total income for the full-time self-employed: $50,000
  • Median total income for all full-time employees: $45,000

    11. Tampa-St. Petersburg-Clearwater, FL

  • Percentage of workers that are self-employed: 11%
  • Number of people that are self-employed: 157,193
  • Most overrepresented industry for the self-employed: Transportation and Warehousing, and Utilities
  • Median total income for the full-time self-employed: $43,060
  • Median total income for all full-time employees: $42,700

    10. Oklahoma City, OK

  • Percentage of workers that are self-employed: 11%
  • Number of people that are self-employed: 76,587
  • Most overrepresented industry for the self-employed: Other Services, Except Public Administration
  • Median total income for the full-time self-employed: $50,000
  • Median total income for all full-time employees: $43,000

    9. Austin-Round Rock, TX

  • Percentage of workers that are self-employed: 11.2%
  • Number of people that are self-employed: 129,227
  • Most overrepresented industry for the self-employed: Information
  • Median total income for the full-time self-employed: $50,000
  • Median total income for all full-time employees: $51,000

    8. Atlanta-Sandy Springs-Roswell, GA

  • Percentage of workers that are self-employed: 11.3%
  • Number of people that are self-employed: 329,966
  • Most overrepresented industry for the self-employed: Other Services, Except Public Administration
  • Median total income for the full-time self-employed: $48,000
  • Median total income for all full-time employees: $48,000

    7. Portland-Vancouver-Hillsboro, OR-WA

  • Percentage of workers that are self-employed: 11.4%
  • Number of people that are self-employed: 146,118
  • Most overrepresented industry for the self-employed: Arts, Entertainment, and Recreation, and Accommodation and Food Services
  • Median total income for the full-time self-employed: $50,000
  • Median total income for all full-time employees: $52,000

    6. San Francisco-Oakland-Hayward, CA

  • Percentage of workers that are self-employed: 11.6%
  • Number of people that are self-employed: 290,644
  • Most overrepresented industry for the self-employed: Information
  • Median total income for the full-time self-employed: $63,000
  • Median total income for all full-time employees: $72,300

    5. Denver-Aurora-Lakewood, CO

  • Percentage of workers that are self-employed: 11.8%
  • Number of people that are self-employed: 192,182
  • Most overrepresented industry for the self-employed: Finance and Insurance, and Real Estate and Rental and Leasing
  • Median total income for the full-time self-employed: $60,000
  • Median total income for all full-time employees: $52,000

    4. New Orleans-Metairie, LA

  • Percentage of workers that are self-employed: 12.1%
  • Number of people that are self-employed: 70,893
  • Most overrepresented industry for the self-employed: Other Services, Except Public Administration
  • Median total income for the full-time self-employed: $48,000
  • Median total income for all full-time employees: $45,000

    3. San Diego-Carlsbad, CA

  • Percentage of workers that are self-employed: 12.2%
  • Number of people that are self-employed: 206,126
  • Most overrepresented industry for the self-employed: Other Services, Except Public Administration
  • Median total income for the full-time self-employed: $52,000
  • Median total income for all full-time employees: $50,000

    2. Los Angeles-Long Beach-Anaheim, CA

  • Percentage of workers that are self-employed: 13.7%
  • Number of people that are self-employed: 900,848
  • Most overrepresented industry for the self-employed: Information
  • Median total income for the full-time self-employed: $48,000
  • Median total income for all full-time employees: $47,000

    1. Miami-Fort Lauderdale-West Palm Beach, FL

  • Percentage of workers that are self-employed: 15.6%
  • Number of people that are self-employed: 457,579
  • Most overrepresented industry for the self-employed: Agriculture, Forestry, Fishing and Hunting, and Mining
  • Median total income for the full-time self-employed: $40,000
  • Median total income for all full-time employees: $40,000
  • OUR CASE STUDY METHODOLOGY

    The data used in this analysis is from the 2017 American Community Survey Public Use Microdata Sample (ACS PUMS). The percentage of workers that are self-employed, the number of people that are self-employed, the most overrepresented industry for the self-employed, median total income for the full-time self-employed, and median total income for all full-time employees were all derived from the survey.

    For each metro, the most overrepresented industry for the self-employed was determined by comparing the metro-level concentration of self-employment for each industry to its respective national level concentration. The industry that had the largest percentage difference from the national concentration was reported as the most overrepresented industry—representing a disproportionately high concentration of self-employment within the metro relative to the national level.

    Researchers grouped metros into the following cohorts based on population size:

    Small metros: 100,000 – 350,000
    Midsize metros: 350,000 – 1,000,000
    Large metros: more than 1,000,000

    Metros were then ranked by the percentage of workers that are self-employed.


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