For entrepreneurs looking to turn their fledgling business idea into a profitable organization, every dollar counts towards breaking even. And while there are many factors contributing to your business's profitability--the location you choose for your big launch pays a significant role in your expenses.
Using data from the latest reports by the Small Business & Entrepreneurship Council, Moody's, Forbes, and CNBC, we've analyzed tax data, real estate prices, and labor and energy costs to identify the cheapest cities in America to start a business.
Of course, price alone can't be the only deciding factor in determining where you start your business. But if your location is flexible and you're looking for your most affordable options, consider whether one of these six cities may be the hidden gem you were looking for.
1. Eugene, OR
About 500 miles north of Silicon Valley's tech bubble, a growing number of startups are finding a new home in the sleepy college town of Eugene, Oregon.
Despite Oregon's relatively high small business tax index (9th highest in the country overall), Forbes recently ranked Eugene first in the country for cost of doing business.
Cost of living in Eugene is 1.5% below the national average--making it a far more affordable option for tech entrepreneurs who appreciate the west coast vibe, but can't stomach the high costs of San Francisco or San Jose.
In addition to the great cost of doing business, Eugene is home to the University of Oregon, and is known for its natural beauty, recreational opportunities, and focus on the arts.
2. Fort Smith, AR
Straddling the border of Arkansas and Oklahoma, Fort Smith may strike many as a surprising venue for a thriving startup scene. But with its proximity to the world's largest retailer and low cost of doing business--2nd lowest in the nation according to Forbes--it's understandable that Fort Smith is a prime location for manufacturers.
Two nearby universities--the University of Arkansas and Oklahoma State--fuel the area with affordable talent, and a low cost of living (12.3% below the national average) makes the area attractive to business owners and their teams. Meanwhile, nonprofit incubators like The ARK Challenge and Startup Arkansas are working to attract more and more entrepreneurs to the Northwest Arkansas region.
3. Hickory, NC
As a state, North Carolina has undergone major tax reforms in the last few years, making it far more favorable to new businesses than ever before. But unlike Charlotte's pricey downtown area or the high tech costs of Raleigh-Durham's research triangle, land values in Hickory are far lower, leading to the town's recent ranking as the fourth lowest cost of doing business in the country.
Cost of living in Hickory is almost 10% below the national average, and this small town is showing signs of growth both in job openings and in population. These factors make Hickory even more attractive to new manufacturing businesses, as well as a surprising number of information technology companies.
If you choose Hickory as the site for your next business venture, feel free to leave the moving truck behind. The 200-mile radius around Hickory is known as the furniture capital of the country.
4. Shreveport, LA
With a cost of living just slightly above the national average and a job growth rate of -0.1%, it may be surprising to see Shreveport listed as one of the cheapest cities in the country to start a business. And yet this northwestern Louisiana city is a major hub for the defense and aerospace industries, and was recently listed as seventh in the country for cost of doing business!
Shreveport's startup scene is young and underdeveloped, but it is certainly growing. The city is taking steps to capitalize on favorable conditions for businesses and will host its first ever startup week in 2016 to fuel entrepreneurship in the area.
5. Fort Wayne, IN
Fort Wayne offers the innovation and talent prospects of bigger midwestern cities like Chicago and Indianapolis without the high price tag.
A few different factors contribute to Fort Wayne's ranking as a cheap place to do business. As a state, Indiana has one of the best tax climates in the country. Cost of living in Fort Wayne is more than 12% below the national average, and Forbes even recently ranked the city in its top ten for cost of doing business.
Known as the birthplace of the NBA and home to the San Diego Padres' farm team, Fort Wayne is a truly all-American town and a great place for small business owners to call home.
6. Beaumont, TX
With a cost of living 5% below the national average and the third lowest business tax index in the country, Beaumont is a beautiful place to start a business--particularly when cash is tight. The city is known as a hub for transportation and defense industries, and area businesses have an average annual revenue of almost $2.8 million.
While Beaumont's startup scene hasn't quite hit the big time, the low cost of doing business in the area may be good enough reason to choose this Southeast Texas town as the best spot to set up shop.
Some of these locales are exciting up-and-comers. Others are still sleepy little towns with startup scenes that have yet to hit the big time. But the smartest entrepreneurs may be those who choose to strike while the iron is hot, leading the charge to capitalize on low costs of doing business as they help to fuel entrepreneurship in these soon-to-be great American cities.