Top 10 Best Cities to Start a Business in 2026

Starting a business can be daunting, and choosing the best city for your operations can be just as challenging.

Aspiring entrepreneurs and small business owners should use this guide for a rundown of the most business-friendly cities in 2026, ranked by tax climate, labor access, and business survival data. Our rankings exclude personal considerations, such as public school quality and crime rates, to focus solely on the most business-friendly cities for starting a business.

What Makes a Good City for Small Businesses?

Many elements, some concrete, some intangible, make a city a good place to start a small business. This can include its spirit and whether an entrepreneurial culture has been cultivated in both small and big businesses.

We used the following criteria to inform our rankings:

• Overall tax climate, including state income tax, corporate tax, and incorporation fees

• Business survival rate

• Labor force size and education credentials

• Cost of living

• Entrepreneurial activity by business application volume

Many cities, both inside and outside this top 10 list, established policies to attract new businesses. This can include financial incentives and easing otherwise onerous regulations. Cities more amenable to small businesses will also make licensing more straightforward.

Top 10 Cities for Small Business

These are the top 10 cities to establish a business in 2026. These rankings are based on overall tax friendliness, business environment, access to resources in the local economy, such as a thriving labor force, and a robust business survival rate. Population and labor force numbers include the greater metro area.

For 2026, cities in North Carolina have moved up in the rankings due to continued decreases in the corporate income tax rate. Currently, at 2%, North Carolina is on track to eliminate this tax by 2030.

1) Cary, NC

Cary has a healthy economy and a strong business survival rate. It's close to Raleigh, another business-friendly location, and like other cities in North Carolina, has a low corporate tax rate. If you're considering establishing your business in Cary, you'll be entering a highly educated and rapidly expanding market where entrepreneurship is becoming increasingly common, and innovation is prized.

• Population: 1.7 million

• Labor force: 850,000

• Business applications: 30,000 – 40,000

• Business survival rate: 70.6%

• Self-employment: 8.7%

2) Raleigh, NC

Raleigh offers a strong labor force and an excellent quality of life. City-sponsored business support programs and new business grants make it an attractive place to establish a business. While the region has become more competitive, small business owners choose Raleigh for its affluent consumer base.

• Population: 1.6 million

• Labor force: 860,000

• Business applications: 35,000 – 40,000

• Business survival rate: 70.6%

• Self-employment: 6%

3) Austin, TX

Many people recognize Austin as the Live Music Capital of the World, but few realize how it rivals San Francisco, San Jose, and Los Angeles as one of the top cities for tech startups. An above-average business survival rate, combined with numerous startup opportunities with no personal income tax, makes Austin desirable for new business owners. Small businesses tend to grow once they tap into the city's tech-forward, high-earning demographic.

• Population: 2.35 million

• Labor force: 1.6 million

• Business applications: 53,000

• Business survival rate: 70.7%

• Self-employment: 11%

4) Orlando, FL

Orlando, one of the fastest-growing cities, earns a spot on the list thanks to its tax benefits, relatively low cost of living, job growth, and its location in the tax-friendly state of Florida. With hundreds of thousands of new business applications filed annually, there's no shortage of competition in Orlando. Numerous entrepreneurs can form a sort of support network for new small businesses, which is key to catering to the large influx of consumers in the region.

• Population: 2.96 million

• Labor force: 1.5 million

• Business applications: 400,000

• Business survival rate: 68.7%

• Self-employment: 11+%

5) Scottsdale, AZ

Scottsdale’s large workforce and tax friendliness make it one of the best cities in America to start a new business. Its high rate of self-employment and substantial annual business applications is evidence that it’s a great place for ambitious entrepreneurs to succeed with their new ventures. While there's a lot of competition in the Scottsdale market, many small business owners are drawn to the large consumer base.

• Population: 5+ million

• Labor force: 2.7 million

• Business applications: 144,000

• Business survival rate: 68.9%

• Self-employment: 16%

6) Charlotte, NC

Charlotte is ranked the sixth-best city for its tax-friendly environment, robust workforce, and high business survival rate. Charlotte's pro-business economy and declining corporate income tax rate give many small businesses reasons to establish there. That's on top of the large pool of qualified professionals to draw from.

• Population: 2.4 million

• Labor force: 1.5 million

• Business applications: 45,000 – 50,000

• Business survival rate: 65%

• Self-employment: 11%

7) Nashville, TN

Nashville, the Music City, enjoys a low unemployment rate and a cost of living that’s lower than the national average. It's a top city for new businesses due to its healthy business survival rate and supporting resources like the Nashville Entrepreneur Center. Nashville, like many other non-coastal cities, has experienced high growth rates and continued market expansion in the 2020s.

• Population: 2.2 million

• Labor force: 1.18 million

• Business applications: 55,000

• Business survival rate: 62%

• Self-employment: 6.5%

8) Atlanta, GA

Entrepreneurs seeking big-city living and a diverse culture will fare well in Atlanta. It’s one of the biggest metro areas to make the cut on our list due to its tax-friendliness and lower cost of living. The continued growth of its diverse population offers numerous business opportunities for owners and entrepreneurs to cultivate dedicated local customer bases in this large city.

• Population: 6.48 million

• Labor force: 3.35 million

• Business applications: 190,000 – 200,000

• Business survival rate: 62%

• Self-employment: 11%

9) Oklahoma City, OK

Oklahoma City boasts some of the lowest unemployment rates, corporate tax rates, and costs of living on this list. It also has some of the lowest incorporation fees among the cities listed. While many cities on the list have experienced explosive growth recently, Oklahoma City has grown steadily, attracting numerous small business owners who appreciate a little more breathing room.

• Population: 1.51 million

• Labor force: 786,000

• Business applications: 83,000 (statewide)

• Business survival rate: 62%

• Self-employment: 10.6%

10) Louisville, KY

Louisville is a business-friendly city due to its low unemployment and well-educated workforce. The cost of living is up to 9% below the national average, making it an affordable place for any entrepreneur's latest venture. Louisville is viewed as a stable region with steady growth, making it increasingly attractive to small business owners seeking a less crowded market.

• Population: 1.14 million

• Labor force: 700,000

• Business applications: 42,000

• Business survival rate: 62%

• Self-employment: 7%

Summary Comparison Table

Refer to this quick comparison of the top cities to start a business as you decide which is the strongest candidate for relocating your operations.

How Do I Know Which City is Right for My Situation?

Determining the best city for your situation comes down to both business and personal considerations. The schools, infrastructure, and cultural fit for you and your family should be explored before making a final decision. There's always an element of risk when moving to a new place, which makes community and economic research essential.

While identifying a city that checks all the boxes for your family can be difficult, the key factors that make it the best for your business are easier to weigh. Does the city or state have an income tax? Louisville is the only location listed that levies a city income tax, while Texas, Tennessee, and Florida have no state-level personal income tax. Does the city have a strong ecosystem for your specific sector, or has the region reached saturation? If there's little room to establish your new business, other regions with greater demand for your services may help you reach your full business potential faster. Ongoing business costs for commercial space and the efficiency of local licensing authorities should also be determined before committing to a new city.

If you operate as an LLC and there's no physical presence requirement, your home state matters more than city rankings. Because LLC registration and taxation are done at the state level, your home state defines legal obligations and tax liabilities, not the city proper. This is particularly important for remote-first business owners.

Is It Difficult to Relocate a Business?

So, you've decided to relocate to a more tax-friendly city for more business opportunities, but you've already established your operations. Moving your existing business to a new city isn't the most difficult task, but you will have to repeat many of the steps you took when you started. Follow these broad steps to relocate your business to your new city:

• Dissolve or withdraw from your current state where the business was originally formed.

• Register as a foreign entity or form a new business. If you're a "foreign entity," that means you're doing business in a state other than where you're formed.

• Select a registered agent for your new state. Your new registered agent must be in the same state as your business.

• Notify the IRS of your business address change.

• Review tax nexus obligations. Having a physical or economic presence in a state will create nexus obligations.

While you'll be saying goodbye to your current city, you don't have to let go of good employees. Breakthroughs in remote work and technology allow companies to cast a wider net across the country or, in your case, bring your best people with you virtually.

Choosing Your City: Next Steps

Choosing the best city for your business can be difficult, but setting it up for success from the start is a no-brainer. Whether you're making your business official by forming an LLC, managing a move from your current state to a new city, or optimizing your first-year tax plan, 1-800Accountant's suite of tax-deductible small business solutions gives you the right support from the start.

Explore 1-800Accountant's financial services today to learn more and to get started.