Here's Where You'll Pay the Most to Start Your Startup
If you're searching for the cheapest place to plant your startup, think beyond America's coastlines. In a ranking of the estimated costs of starting up in 11 booming cities, the three least expensive locations were outside of the U.S.
Berlin is the lowest-cost city to startup in, followed by Singapore and Beijing, according to a report from The Information. On the opposite end of that list was San Francisco, being the most expensive, followed by slightly less expensive startup cities Palo Alto, California and Washington, D.C.
The Information used salary data from jobs site Glassdoor to estimate about how much money it would take to hire a basic startup team of two software engineers and a designer in each city. It also considered average commercial real estate prices.
Of course, there are tradeoffs involved with setting up shop in any city. Bay Area-based startups, for example, generally enjoy greater access to venture capital than companies in other parts of the country.
Cheapest Places to Startup
It might surprise you to learn that the average annual salary for a software engineer in Berlin is just $61,934. That results in a low startup cost estimate of just $212,645. The Information arrived at its numbers by totaling the average annual salaries for two software engineers, a designer and the cost of an annual lease on a 1,000 square-foot office. In Singapore that adds up to $232,900, while in Beijing it's $258,004.
Most Expensive Startup Cities
By comparison, the cost of establishing your startup in the nation's capital -- $318,000 -- is third only to costs in Palo Alto and San Francisco. In those locations you will have to pay about $379,121 and $388,513 respectively. Though real estate is much cheaper in Palo Alto than in San Francisco, engineers working in the Valley expect to make about $12,600 more per year than their counterparts in the city.
And, Somewhere in the Middle
Of course the list didn't forget New York City. It came in just below Washington, D.C. in terms of expensiveness. London, Seattle, Los Angeles and Chicago also all fell somewhere in between the extremities.