As in past years, Florida communities dominate the rankings, including notable newcomers No. 4 Ft. Walton Beach and No. 8 Naples, as well as repeat winners No. 20 Sarasota and redoubtable Ft. Myers-Cape Coral, a midsized city coming in at a remarkable No. 3.

One key advantage, entrepreneurs in many of these places say, lies in the growing attraction of talented people to such areas. "We all make lifestyle choices," explains Michigan native Kim Kobza, president of Neighborhood America, a fast growing Web-based survey firm located in the paradisiacal surroundings of Naples, Fla. "The lifestyle of this region is very friendly. It's pretty easy to get people to come down and work here."

Once seen as a low-tech, "cheap" locale for businesses, Florida regions seem to be moving decisively into areas -- such as professional and financial services, as well as information -- that traditionally concentrated around big cities and areas like Silicon Valley. Now, entrepreneurs report, Florida is developing into a preferred location for educated professionals, including many younger people.

Entrepreneurs like Richard Kane, CEO of Coastal Technologies Group (Inc. 500 No. 59), a telecommunications-services provider, see Florida as a relatively low-cost alternative for tech-related firms. Coastal, located in Boynton Beach near Boca Raton, and ranked No. 31 overall and No. 5 among the large metropolitan areas, has found a particularly large pool of technical people leftover from the days when IBM ran its PC division from there.

In addition, although home prices are rising, they are much lower than those in traditional tech centers like No. 343 Boston or No. 381 San Jose -- even as the Florida economy is developing far more jobs. Although distance from larger customers up north can pose a challenge, there's also the appeal of having them visit, particularly in the winter. "It helps with marketing," Kane suggests.

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