If you’ve long since graduated from the lemonade stand and are looking for a new city to conquer in your quest for entrepreneurship, we’ve got your back. We conducted a study to discover the best cities for young entrepreneurs — read on to see our top nine picks.
Learn more about our methodology here.
Note: The Cost of Living numbers below are in comparison to the national average, which was given a score of 100. Anything above 100 represents a high cost of living compared to the national average, whereas anything below 100 represents a lower cost of living.
1. Cincinnati, Ohio
With a below-average cost of living, a high number of residents with bachelor's degrees, and low tax rates (both personal and corporate), Cincinnati takes the number one spot on our list.
The city has become a hub for young entrepreneurs looking to grow their businesses and personal brands. Plus, local company CincyTech has partnered with the state government to help fund regional startups across the state. Since 2007, they’ve invested $55.2 million, providing a $1.5 billion increase in economic impact in the area.
Convinced and ready to begin? Whether you live in The Queen City now or you’re planning to move soon, Incfile can help get the gears moving. File your Ohio LLC with us today.
| Cost of Living (National Average Is 100): | 86.8 |
| Average Age: | 32.7 |
| Percentage of People 25+ Years Old Holding a Bachelor’s Degree or Higher: | 39.6% |
| Income Tax Rate (Single Filer, Highest Bracket): | 3.99% |
| Corporate Income Tax Rate (Highest Bracket): | 0% |
| GDP Per Capita: | $75,992 |
| Personal Income Per Capita: | $63,116 |
2. Durham, North Carolina
Durham got its name from its founder, Dr. Bartlett Durham, an innovator who pushed the city to focus on inclusivity and innovation. His spirit has continued to this day, as Durham is widely considered a city with high entrepreneurship and community engagement.
In fact, the city hosts an Innovate Durham event every year, where the local government partners with budding entrepreneurs to test new ideas, products, and services. Add to that a high percentage of people with bachelor's degrees and the 10th highest GDP per capita of all cities studied, and you can rest assured that you’ll be in good company in the Bull City. Start your North Carolina LLC with Incfile today.
| Cost of Living (National Average Is 100): | 97.5 |
| Average Age: | 33.2 |
| Percentage of People 25+ Years Old Holding a Bachelor’s Degree or Higher: | 52.8% |
| Income Tax Rate (Single Filer, Highest Bracket): | 4.75% |
| Corporate Income Tax Rate (Highest Bracket): | 2.50% |
| GDP Per Capita: | $92,987 |
| Personal Income Per Capita: | $63,375 |
3. Dallas, Texas
Enter the first of many metro areas in Texas that are made for young entrepreneurs. But before we get into the intricacies of what makes Dallas so great, we need to first answer the question — why Texas? You’ll see Texas multiple times on this list because the business-friendly state is home to no income or corporate taxes, meaning that opening a Texas LLC is a smart move for young entrepreneurs’ wallets.
Dallas comes in at number three for the best cities for young entrepreneurs due to the absence of taxes, as mentioned above, a relatively low cost of living, a low average age, and a high personal income level per capita.
| Cost of Living (National Average Is 100): | 101 |
| Average Age: | 32.6 |
| Percentage of People 25+ Years Old Holding a Bachelor’s Degree or Higher: | 35.6% |
| Income Tax Rate (Single Filer, Highest Bracket): | 0% |
| Corporate Income Tax Rate (Highest Bracket): | 0% |
| GDP Per Capita: | $77,109 |
| Personal Income Per Capita: | $66,727 |
4. Indianapolis, Indiana
Want your dollar to stretch even further when starting your entrepreneurial or small business journey? Set up shop in Indianapolis, which has the lowest cost of living on this list (18th lowest out of all 100 cities studied) and a lower-than-average income tax rate, making it great for young people on a budget.
Ready to start your business? Open an Indiana LLC with Incfile today to take the first step towards your lifelong dream of being your own boss.
| Cost of Living (National Average Is 100): | 84.9 |
| Average Age: | 34.1 |
| Percentage of People 25+ Years Old Holding a Bachelor’s Degree or Higher: | 32.9% |
| Income Tax Rate (Single Filer, Highest Bracket): | 3.15% |
| Corporate Income Tax Rate (Highest Bracket): | 4.90% |
| GDP Per Capita: | $76,200 |
| Personal Income Per Capita: | $65,805 |
5. Columbus, Ohio
Texas isn’t the only state worth mentioning again and again for young entrepreneurs — Ohio is also vying for attention. Home to some of the most successful young entrepreneurs, Ohio invests in future generations through its Ohio Afterschool Network Entrepreneurship Program for high school and other young students.
Columbus takes the fifth slot on our list for multiple reasons. First, the city has the lowest average age of the top nine cities, so Gen Z and millennials don’t need to worry much about being out of their element in The Arch City. In addition, Columbus has a very low cost of living, no corporate income tax, and a relatively high GDP per capita for an up-and-coming city.
| Cost of Living (National Average Is 100): | 86.4 |
| Average Age: | 32.5 |
| Percentage of People 25+ Years Old Holding a Bachelor’s Degree or Higher: | 37.9% |
| Income Tax Rate (Single Filer, Highest Bracket): | 3.99% |
| Corporate Income Tax Rate (Highest Bracket): | 0% |
| GDP Per Capita: | $71,831 |
| Personal Income Per Capita: | $59,867 |
6. Houston, Texas
We must admit that we’re partial to Houston — after all, it’s where Incfile is headquartered! But we’re not the only ones who call Houston home. Many young, successful professionals start an LLC or corporation in Houston due to its nonexistent tax rates, low cost of living compared to the national average, low average age, and an average GDP per capita of just under $75K.
| Cost of Living (National Average Is 100): | 95.5 |
| Average Age: | 32.6 |
| Percentage of People 25+ Years Old Holding a Bachelor’s Degree or Higher: | 34.70% |
| Income Tax Rate (Single Filer, Highest Bracket): | 0% |
| Corporate Income Tax Rate (Highest Bracket): | 0% |
| GDP Per Capita: | $74,522 |
| Personal Income Per Capita: | $64,837 |
7. Fort Worth, Texas
Considering starting an LLC or corporation in Texas, but not sure if you want to move to a big city? Check out Fort Worth, which is nestled just outside of Dallas and Arlington. The city “Where the West Begins” offers a small-town feel with big-city business opportunities.
But on to the data. Fort Worth has a relatively average cost of living and a high personal income per capita, meaning you can expect your dollar to take you further when building your empire. The city also ranks in the top 25% of GDP per capita out of all the cities we studied, and it has a low average age, which is a promising sign for a flourishing economic future.
| Cost of Living (National Average Is 100): | 100.2 |
| Average Age: | 32.6 |
| Percentage of People 25+ Years Old Holding a Bachelor’s Degree or Higher: | 31.0% |
| Income Tax Rate (Single Filer, Highest Bracket): | 0% |
| Corporate Income Tax Rate (Highest Bracket): | 0% |
| GDP Per Capita: | $77,109 |
| Personal Income Per Capita: | $66,727 |
8. Arlington, Texas
Imagine this: You open your own storefront in a quaint downtown square, where locals and tourists alike stop in and shop for your products. Your local government is highly focused on business development, online growth, and downtown beautification, and the cost of living is affordable. In Arlington, Texas, you don’t have to imagine.
The Business Improvement District of Arlington, Texas, understands the importance of boosting small businesses for their local economy, and they put their money where their mouth is — just check out their 2022 Business Improvement stats. The American Dream City also has no income or corporate taxes and a relatively low cost of living, making it a no-brainer for brick-and-mortar and online businesses alike.
| Cost of Living (National Average Is 100): | 100.8 |
| Average Age: | 32.6 |
| Percentage of People 25+ Years Old Holding a Bachelor’s Degree or Higher: | 31.7% |
| Income Tax Rate (Single Filer, Highest Bracket): | 0% |
| Corporate Income Tax Rate (Highest Bracket): | 0% |
| GDP Per Capita: | $77,109 |
| Personal Income Per Capita: | $66,727 |
9. Austin, Texas
If you expected to see Austin higher up on this list, you aren’t alone. While Austin used to be the top dog on most “best cities to live” lists for creatives, homeowners, social media gurus, and tech workers alike, recently, Austin has dropped in the polls due to rising housing prices, cost of living, and overcrowding.
However, for young entrepreneurs, Austin still has a host of benefits that make it a great place to move. ATX is home to the highest personal income per capita out of these top nine cities, meaning those who do move there are making bank. The tech boom is also worth mentioning — whether you’re looking to secure a top-paying job or start a competing company of your own, Austin will help you flourish.
| Cost of Living (National Average Is 100): | 129.4 |
| Average Age: | 32.7 |
| Percentage of People 25+ Years Old Holding a Bachelor’s Degree or Higher: | 55.1% |
| Income Tax Rate (Single Filer, Highest Bracket): | 0% |
| Corporate Income Tax Rate (Highest Bracket): | 0% |
| GDP Per Capita: | $82,372 |
| Personal Income Per Capita: | $71.372 |
Up and Coming Cities for Entrepreneurs
An important skill in entrepreneurship is forward-thinking, which involves predicting trends and staying ahead of the competition. Stay ahead of the curve by starting your business in a city that hasn’t quite peaked yet, but is well on its way to a business boom.
In our study, we found three cities that didn’t make the top list but were close enough to warrant a second look. These three cities include Raleigh, North Carolina, Nashville, Tennessee, and Madison, Wisconsin. Each has the hallmarks of a business-friendly city; low or nonexistent taxes, business or innovation programs, and a population of similarly aged and educated peers.
Test your forward-thinking skills by taking a look at the stats — one of these cities could be your business haven for years to come:
| Raleigh, North Carolina | Nashville, Tennessee | Madison, Wisconsin | |
| Cost of Living (National Average Is 100): | 102.4 | 103.1 | 101.4 |
| Average Age: | 32.8 | 34.1 | 30.7 |
| Percentage of People 25+ Years Old Holding a Bachelor’s Degree or Higher: | 52.4% | 43.9% | 58.5% |
| Income Tax Rate (Single Filer, Highest Bracket): | 4.75% | 0% | 7.65% |
| Corporate Income Tax Rate (Highest Bracket): | 2.50% | 6.50% | 7.90% |
| GDP Per Capita: | $74,763 | $81,011 | $82,901 |
| Personal Income Per Capita: | $66,428 | $70,026 | $69,116 |
Does one of the cities above stand out above the rest? Incfile can help you through the early stages of business formation, no matter which state you’re in.
File your LLC in Tennessee or Wisconsin today.
Entrepreneurs May Want to Avoid These Cities
Though Silicon Valley and San Francisco may come to mind when you think of cities primed for entrepreneurship, the data shows something entirely different. As you can see above, not a single city in the metropolitan areas of California made the top nine list. In fact, most of them ranked low in our study, with the bottom three cities all within California state lines.
So why the sudden drop of faith in The Golden State? The first problem is with taxes, as California has some of the highest personal and income tax rates in the country. The second problem is California’s cost of living, which is more than double some of the best locations we’ve listed above.
Fremont, Santa Ana, and Irvine took the bottom three spots on our list due to both their high taxes and extremely high cost of living. Take note of these negative trends compared to the top cities listed above:
| Fremont, California | Santa Ana, California | Irvine, California | |
| Cost of Living (National Average Is 100): | 221.7 | 144.8 | 181.1 |
| Average Age: | 38.3 | 30.8 | 34.6 |
| Percentage of People 25+ Years Old Holding a Bachelor’s Degree or Higher: | 60.1% | 17.3% | 68.6% |
| Income Tax Rate (Single Filer, Highest Bracket): | 13.30% | 13.30% | 13.30% |
| Corporate Income Tax Rate (Highest Bracket): | 8.84% | 8.84% | 8.84% |
| GDP Per Capita: | N/A | N/A | N/A |
| Personal Income Per Capita: | N/A | N/A | N/A |
Young entrepreneurs aren’t afraid to take risks, including moving to a brand-new city just for a business opportunity. The above cities are great options for those on the hunt to start fresh, but keep in mind that small business success can happen just about anywhere! File your LLC for free with Incfile today.
Methodology
To determine what cities would be crowned the best for young entrepreneurs, the team at Incfile collected the following data sets for the 100 most populated cities in the United States. Once the data was collected, each data set was given an importance-based weight that was used to calculate the total score for each city. Then, each city was given a ranking. The cities that had the highest scores were ranked the highest, and vice versa.
- Cost of Living (Source: BestPlaces)
- Weight: .15
- Weight: .15
- Average Age (Source: Opendatasoft)
- Weight: .12
- Percentage Holding a Bachelor's Degree or Higher (25 years or older) (Source: United States Census)
- Weight: .07
- Weight: .07
- Income Tax Rate - Single Filer, Highest Bracket Possible (Source: Tax Foundation)
- Weight: .23
- Corporate Income Tax Rate - Highest Bracket Possible (Source: Tax Foundation)
- Weight: .20
- Weight: .20
- GDP Per Capita (Source: Smartest Dollar)
- Weight: .10
- Personal Income Per Capita (Source: Smartest Dollar)
- Weight: .13
This study was conducted from May to June 2023.
Sarah Hollenbeck
Sarah is a copywriter and brand strategist who has helped companies of all sizes reach their audience with targeted content. Outside of her marketing work, Sarah is passionate about creative writing, yoga and hiking with her dog, Otis.
